Target CEO: Plan to revamp stores working

When Target CEO Brian Cornell took the stage at a company investor meeting Tuesday morning, he harked back to two years ago.

Same stage. Same meet- ing. Different Target.

In February 2017, Cornell looked out on the New York ballroom with a mixed bag of news. Sales at stores open more than a year were down. The company needed a turn- around, especially as scores of retailers began shutting down stores.

So Cornell made a promise: $7 billion in capital investments to overhaul and revamp the chain. That plan included remodeling hundreds of stores and the roll- out a dozen exclusive, private-label brands.

Recently, Cornell acknowl- edged that “at that time, the plan was not met with uni- versal applause.”

But now, he added, “our strategy is working.”

Target has remade itself as a retail success. The brand is on track to remodel 1,000 stores by the end of 2020. It has launched more than 20 private-label brands. And customers are hooked on Target’s roster of shipping options, including sameday delivery and curbside pickup.

The proof was in the recent earnings results: Target celebrated its best year since 2005. Comparable sales in 2018, a measure of sales online and at stores open more than a year, grew by 5 percent. Comparable digital sales alone climbed 36 percent — marking the fifth consecutive year in which that figure grew more than 25 percent. On Tuesday afternoon, Target’s stock price was up nearly 5 percent.

Large retailers have a unique ability to invest in this kind of overhaul, said Charlie O’Shea, lead retail analyst for Moody’s. Shareholders may screech at how expensive these investments are in the short term. But O’Shea said Target came back with a strong answer: “Nothing’s free. And you can’t do it overnight.”

“I don’t think you could script it any better that it’s turning out,” O’Shea said.