Though big-box retailer Target has been known for expansion and digital innovation of late, Tuesday (Nov. 7) news reports from Chain Store Age noted the company has made a strategic decision to close 12 underperforming brick-and-mortar storefronts on Feb. 3, 2018. The store closures will help the discount retailer continue on its path toward improved bottom lines.
“We have a rigorous process in place to evaluate the performance of every store on an annual basis, closing or relocating underperforming locations as needed,” a Target spokeswoman said in an interview with CNBC. “Typically, a store is closed as a result of seeing several years of decreasing profitability.”
The 12 brick-and-mortar locations that will shutter their doors will be spread across several U.S. states, including Florida, Illinois, Michigan and Texas.
Meanwhile, Minneapolis-based Target is expanding its smaller-format storefront locations with an eye on profitability, opening 32 such stores in 2017 and planning 35 more launches throughout 2018, according to the company’s Chief Executive Officer, Brian Cornell. The retailer will also invest in remodeling existing stores, with current plans to update 1,000 of its 1,800 locations by 2020.
Target recently made news with its focus on eCommerce, an effort which could boost its stock in the next two years by as much as 20 or 30 percent, according to financial investment magazine Barron’s.
The retailer has been making competitive moves against Amazon, which have already helped increase revenue from internet-based transactions. In the latest fiscal year, eCommerce represented 4.4 percent of sales, up 2.8 percent from fiscal 2016, according to the Barron’s data — higher than growth seen at Walmart stores. The introduction of several exclusive Target brands, such as children’s clothing line Cat & Jack, are also boosting growth.
Target recently announced it will be adding 12 exclusive brands by the end of 2018, eight of which will be available during the 2017 holiday shopping season. The brands will include products for babies, children, men, women and home goods.