Jan 30 2014, 11:58pm CST | by Forbes
It’s been a terrible couple of months for Target Stores. A security breach decimated an already weak holiday selling season, aftereffects that just keep coming and troubling financial results from the chain’s first International expansion into Canada.
Target has always defied the odds. It’s a discount department store that made cheap chic by forging partnerships with top designers and bringing otherwise high-end products to the mass market. Target made low-cost high-brow and developed small urban formats to reach younger, hipper shoppers. It was even welcomed into communities when its competition was denied.
While other retailers sped head on into new markets and new product categories, Target kept a slow and steady pace. Walmart and Target both opened their first stores in 1962. Fifty-two years later, Walmart 11,096 stores under 69 banners in 27 countries, and e-commerce websites in 10 countries. Slow and steady Target has 1,921 stores – 124 of which opened last year in Canada – and one Web site, Target.com.
That Target’s logo is the bullseye is appropriate. The retailer developed its strategy long ago, set its sights on the target and rarely wavered. It opens stores in tiny increments each year compared to its biggest competitor, Walmart. There was no rush to cross the border and its entry into Canada — the nice, friendly neighbor to the North of Target’s Minnesota headquarters Canada — was 51 years in the making.
“While initial sales in Canada have fallen well short of expectations, we remain very confident in the long-term potential of these assets,” said Gregg Steinhafel, president and CEO. And while management remains confident it can hit its goal of $6 billion in sales by 2017, it won’t be easy.
But Target is proceeding in its usual fashion, announcing new stores for 2014 — including nine in Canada — its smallest prototype to date to better advance in urban markets and a couple of designer partnerships and collections for Spring.
Target’s in a tough spot. There is talk of lawsuits, testifying before Congress and fines that could total more than $1 billion, according to one analyst. There is the shattered trust of shoppers and ongoing investigations. But through it all, Target is putting one foot in front of the other, slowly and steadily walking the path it laid out more than 50 years ago.
Slow and steady.
Source: Forbes Business
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