It’s exhausting, and probably why most of us choose not to start mega-corporations like Walmart and Target. Especially in Target’s case, the retail chain has had quite a tumultuous couple of months, and it doesn’t look like things are going to get better any time soon. After facing severe backlash earlier this year from loyal shoppers due to the brand's choice to all but scrap its DEI policies in an apparent surrender to pressures from the current administration, the cheap-chic retail brand beloved by millennials everywhere has seen a significant and swift decline in sales.
But Target’s trouble didn’t just start this year. And when you zoom out to take a look at the big picture, the recent news that their current CEO, Brian Cornell, is stepping down to let 20-year Target veteran, Michael Fiddelke, take the reins, things start to make a bit more sense. So, how did Target end up here? While the answer to that isn’t exactly linear, strategic missteps, increased competition, and economic uncertainty, among other things, have all played a part in the Minneapolis-based retailer’s current financial outlook.
On their Wednesday earnings call, the brand reported that sales fell for the third consecutive quarter, putting same-store sales down 1.9-percent. Shares also fell 10-percent in premarket trading, furthering Target’s reputation as one of the worst-performing companies in the S&P 500 this year. While that might not seem significant to those of us who don’t own mega-corporations, that translates to hundreds of thousands of dollars in losses. Add in the fact that shoppers are spending less on home goods and deciding to be more strategic with where they spend their cash, and you’ve got a recipe for disaster.
Target Names Michael Fiddelke As New CEO
“When we’re leading with swagger in our merchandising authority, when we have swagger in our marketing, and we’re setting the trend for retail, those are some of the moments I think that Target has been at its highest in my 20 years,” he said.” Although the brand is still optimistic about the future, it’s safe to say that in order to right the ship, they’ve got their work cut out for them. Only time will tell if this is a move in the right direction.
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