MINNEAPOLIS -- Even as the retailer is rolling out its TargetExpress small-format concept, Target Corp. chairman and CEO Brian Cornell announced that the company will eliminate several thousand jobs as part of a corporate restructuring.
"Following a thorough, strategic review of our business, coupled with a careful evaluation of the changing retail landscape, we have identified the key initiatives that will put Target on a clear path to growth," said Cornell. "We're focused on our future and building the capabilities that will take us further, faster. Redefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do."
The retailer is taking a channel-agnostic approach to growing its business, driving a total Target experience across stores, online and mobile.
It is prioritizing style, baby, kids and wellness merchandise categories. It is repositioning other categories, including grocery, to deliver a more compelling and appealing shopping experience.
Target's store opening plans will increasingly focus on new, more flexible formats such as TargetExpress and CityTarget, which cater to guests in rapidly-growing, dense urban areas. Throughout 2015, the retailer will open eight TargetExpress locations across the country. In addition, the company will continue to open the right stores to fit each community and test new layouts in its general merchandise stores.
TargetExpress features an edited assortment of merchandise, including fresh produce, grab-and-go food and snacks, pharmacy, home, seasonal, electronics, beauty and more. Smaller, hand-held baskets and two-tiered carts are designed for quick-trip shopping.
In addition to previously announced openings in San Francisco, San Diego and St. Paul, Minn. Target plans to bring two TargetExpress stores to the greater Washington, D.C. area and one to Chicago.
The retailer's newest and smallest format at approximately 20,000 square feet, TargetExpress provides an exceptional quick-trip shopping experience that is distinctly Target. The varying size and locations of these stores will enable Target to create a unique store experience and curated merchandise assortment localized for each community.
Target will continue to test TargetExpress stores to learn more about operating small format locations and further enhance and customize the guest experience. Target currently operates one TargetExpress location in Minneapolis, which opened in July 2014 and has already made adjustments based on guest feedback and operational insights. For example, the assortment was expanded to include baking supplies, belts, sunglasses, jewelry and select apparel items.
Beyond 2015, Target is exploring a number of opportunities to bring TargetExpress to select major markets across the country, including the greater Philadelphia area, Los Angeles, the greater Washington, D.C., area, Chicago and the San Francisco Bay area.
Cost savings of $2 billion over the next two years will fuel Target's growth and drive profitability. These savings will be realized through operations, technology and process improvements; supply chain and sourcing efficiencies; and corporate restructuring. The restructuring will be concentrated at Target's headquarters locations and focus on driving leaner, more efficient capabilities, removing complexity and allowing the organization to move with greater speed and agility. This includes the establishment of centralized teams based on specialized expertise and the elimination of several thousand positions over the next two years. This year, Target expects to invest between $2 and $2.2 billion in capital expenditures, including a $1 billion investment in technology and supply chain.
"While we're in the early days and there's no doubt that transformation can be challenging, we're taking the steps necessary to unleash the potential of this incredible brand," said Cornell. "I'm encouraged by our early momentum, and am confident that by implementing our strategy, simplifying how we work, and practicing financial discipline, we will ignite Target's innovative spirit and deliver sustained growth."
Minneapolis-based Target has 1,790 stores.
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