Target Closing Stores Despite Prediction Of Strong Holiday Season
Target is closing stores across the U.S., with company executives announcing that 13 locations will be shuttered by January 31, 2016.
As reported earlier by the Inquisitr, Target closed all of its stores in Canada as of January 2015. After a slow holiday season and a huge disappointing loss in the 2014 fourth quarter, Target discontinued all operations in the country and cut 17,600 jobs.
Overall, the Minnesota-based company estimated a $1 billion loss its first year in Canada. As a result, Target is focusing on viability in the U.S. market as well as increasing its online presence.
According to a company spokesperson, Kristy Welker, a Target store closing decision is not one made easily. It is usually a necessary step should the store’s financial sustainability be in jeopardy.
“Typically, a store is closed as a result of seeing several years of decreasing profitability,” she said.
She did not get specific about the closings. However, Welker stated the decision was not a reflection of the company overall but based on each store individually. It usually takes years of decreased profitability before a store hits the chopping block.
After CNN Money reported the store closings, many customers took to social media to voice their disapproval of the company’s decision. Many started campaigns in an effort to save their local store.
First 9,500 join the #SaveNewUlmTarget Facebook group, and now city leaders jump on board, reaching out to Target… https://t.co/4fJ5ocNqu8
— Kelsey Barchenger (@kelsey_KEYC) November 5, 2015
Target published this list of stores slated to be closed.
Austin North East in Austin, TX
Suncoast Pasco County in Odessa, FL
Casa Grande, AZ
Victorville, CA
East Flint in Flint, MI
Columbus Southwest in Columbus, OH
Springfield, OH
Northridge in Milwaukee, WI
Superior, WI
New Ulm, MN
Ottumwa, IA
Anderson, IN
Dixie Highway in Louisville, KY
As Target shuts down these stores, some employees will be asked to transfer to another location.
The company is still trying to recuperate from a massive computer data breach that occurred in 2013. Over 70 million Target customers had personal information stolen, including credit card and debit card account numbers, from a computer hack.
Moreover, approximately 2,000 office employees at the company’s headquarters were laid off in March, June, and September through a workforce reduction plan.
In a Huffington Post report, Target is closing stores despite a predicted busy shopping holiday season for 2015. The decision is in stark contrast to online retailer Amazon, which announced a ramp up of their workforce in anticipation of the holiday rush. On October 20, the online retail giant announced it is adding 100,000 seasonal warehouse and shipping workers to help.
Some forecasters are predicting the 2015 holiday shopping season to be the biggest in years. Some are even saying as much as 25 percent of holiday shoppers in the U.S. started buying before Halloween, whereas 48 percent will be mostly done by Cyber Monday. Practical Ecommerce reports 2015 will be the best holiday season for retailers both online and offline in several years.
As online retail sales increase year after year, brick-and-mortar Target stores may be bearing the brunt of it. Online purchases are predicted to grow 13.9 percent, or $79 billion, this year as consumers turn to the convenience and time-saving advantage of the internet.
However, the company isn’t surrendering to online retailers by dedicating resources to grow its online presence. To compete on a global scale and increase brand recognition worldwide, the company unveiled a new international version of their website last week.
Every year, tens of millions of people outside the U.S. visit Target.com, and the company is anxious to learn how these potential shoppers will interact with the site.
“We believe international consumers will love shopping the great brands, great prices and exclusive products that are synonymous with Target,” commented Jason Goldberger, president of Target.com, in a company statement.
This is part of a $1 billion investment Target made this year to update its e-commerce platform and supply chain. Target will now provide shipping to countries like China, India, Canada, Mexico, and European Union member countries.
Borderfree, a company committed to helping businesses sell products internationally, will work with Target to accept 60 foreign currencies. Additionally, the new website will help U.S. customers send Target purchases to friends and family overseas.
Despite Target closing stores, the company continues to be strong and profitable. The stock price surged over 25 percent compared to last year as earnings continue to climb. The retail chain currently operates 1,799 stores throughout the U.S.
[Photo by Scott Olson/Getty Images]
