Turnaround of Target: Will it Bring Back Lost Momentum?
| Case Code: BSTR470 Case Length: 14 Pages Period: 2013 - 2014 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.400 Organization : Target Corporation Industry : Retail Countries : US,Canada Themes: Turnaround |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
Minnesota-based discount retailer, Target Corporation (Target) reported a 61.7 percent drop in earnings to US$ 234 million in the second quarter (Q2) ended August 2, 2014, compared to its earnings of US$ 611 million for the Q2 of 2013. Commenting on the results, John Mulligan (Mulligan), Chief Financial Officer, Target, said, “While results from the quarter didn’t meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada.
In the U.S., traffic trends continue to recover and monthly sales are improving. Better U.S. sales have continued into August, driven by early back-to-school results.” Industry analysts attributed the drop in earnings to slower customer traffic at Target’s US stores due to cautious spending by American shoppers, softer sales in its Canadian stores, and a massive data breach of its customers’ credit card and debit card information that took place in December 2013.”
Founded in 1902, Target was the second largest discount retailer after Wal-Mart Stores Inc. (Wal-Mart) in the US, as of September 2014. The retailer was known for its Tar-Zhay strategy of offering affordable but stylish fashion and home goods that had won the hearts and wallets of millions of shoppers over the past three decades. But since 2013, Target had been having trouble connecting with its consumers as American shopping habits were going through a profound change..
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