Financial woes are forcing Target to close 13 more stores on January 30, 2016, it has been reported on Wednesday, November 4.
According to a spokesperson of the company headquartered in Minneapolis, Minnesota, the decision has been taken following thorough consideration, and hasn’t been treated lightly.
However, these shops have been underperforming in terms of overall revenues, and operating at a loss didn’t seem like a viable solution. Poor financial results have been reported for several years, but it’s unclear exactly to what extent profitability had dropped at these locations.
Following the closures, staff which had been employed at these stores will be given the opportunity to continue to work for Target, in shops which will remain operational.
The recently unveiled measures however have caused outrage among the buying public, and several online campaigns have been launched, in order to save doomed locations, such as the store in New Ulm, Minnesota.
Company officials insist that these shutdowns should only be viewed as isolated incidents, and that they do not reflect financial difficulties at a broader level, since Target has a total of 1,799 stores after all.
Nevertheless, the announcement still seems to indicate that traditional brick-and-mortar businesses such as Target are no longer capable of staying competitive in the contemporary world, where e-commerce has become so popular and widely used.
Amazon, the world’s largest online retailer, has added tens of thousands of permanent employees to its payroll, in recent months. It is also preparing to hire 100,000 seasonal workers at its shipping hubs and warehouses, in order to cope with growing demand, as the holiday shopping season approaches.
The number of temporary employees which will be added is 25% higher than last year, and it is expected that fourth-quarter revenues will reach $35.1 billion, an increase of 20% since 2014.
In contrast, Target has been forced to dismiss approximately 2,000 members of staff, following downsizing efforts meant to minimize costs, which took place in March, June and September.
It appears that the company hasn’t managed to recover its severely affected reputation, after a major data breach which occurred in 2013, between November 27 and December 15.
At the time, hackers managed to steal personal information from 70 million Target clients, and 40 million credit and debit card accounts were compromised.
Ever since then, Target has been struggling to regain lost ground by offering free shipping during holiday season and other shopping incentives.
However, in January 2015 the store chain revealed another setback it was experiencing. CEO Brian Cornell announced back then that all the stores in Canada would have to close, because they would’ve only become profitable as late as 2021.
Officials declared that exiting the Canadian market would mean extra focus on operations in the United States, but it seems that even these recent efforts haven’t been as fruitful as expected.
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