Target Sharpens Focus on Online and International Growth

February 9th, 2012 by Trefis Team
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TGT: Target logo
TGT
Target

Last year was eventful for Target (NYSE:TGT), the world’s second largest retailer, as it revamped its website to drive online sales. Presently, online sales constitute a very small portion of its annual sales and according to trade publication Internet Retailer, it is the 22nd largest Internet retailer in the U.S. with $1.3 billion in sales in 2010. It mainly competes with Wal-Mart (NYSE:WMT) as well as Best Buy (NYSE:BBY), Macy’s (NYSE:M), Sears (NASDAQ:SHLD), and Costco (NASDAQ:COST) in the retail sector.

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Online and other key initiatives

  • It launched a new version of its website that boasts of faster checkout and more closely resembles the store shopping experience. In the past decade, Target relied on Amazon (NASDAQ:AMZN) for its online sales and outsourced nearly all of its online operations to Amazon.com.
  • It partnered with Jason Wu, a women’s wear and accessories designer, to create a limited edition collection of women’s apparel, handbags and scarves. The limited-edition collection received good customer response and was sold out within hours.
  • Target plans to launch “City Target,” a smaller format store targeted at urban customers in mid-2012. The first stores are expected to open in Chicago, Los Angeles and New York.

Card unit sale

  • Target has been looking to sell its $6.7 billion credit-card receivables portfolio. But in a press statement in January 2012, it announced that it has suspended the sale of the division as it believes it’s not the right time. It plans to initiate the talks with prospective buyers in the second half of the year.
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International frontiers

  • Target is actively looking to diversify its operations geographically. It has doubled its allocated budget to $2.3 billion to convert Zellers stores and integrate them into its retail network in Canada. It plans to open its stores in Canada in 2013. It is also looking to expand in Mexico and Latin America.

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