Trumbull, CT getting 2nd Target store

TRUMBULL -- Even as she arrived at the north side of the Westfield Trumbull Mall last week, Irene Soboeiro knew she'd soon have reason to head to the other end.

"I like Target," she said of the chain slated to open on the south side next month. "I like everything in there."

Nearly two years after it won Planning and Zoning approval, the town's second Target plans its official opening Oct. 12, though the doors will actually open more quietly a few days earlier. It's one of 45 stores the Minneapolis-based chain is opening in October, bringing the total number of stores to 1,685. . . . more

Stores Plan for Weak Holiday Sales

Retailers Respond to Shaky Economy With Earlier Ads, Fewer Seasonal Workers

As economists predict the worst holiday sales season since the recession of 1991, retailers are fighting back with an arsenal of new selling strategies, staff cutbacks and more emphasis than ever on low prices.

Retailers are planning bigger, bolder and earlier ad campaigns to lure shoppers as early as possible, racing to make the most of the shorter holiday season this year-five fewer days between Thanksgiving and Christmas than in 2007. Some chains, including Macy's Inc. and Costco Wholesale Inc. already have put out holiday merchandise.

Stores are expected to hire fewer part-time staffers during the holidays, to control labor costs. Gift cards will be fancier, and companies, such as Target Corp. say they'll be emphasizing affordability with a range of gifts under $25. . . . more

Target to Pop Up in New York

Retailer to open four temporary stores in the city during Fashion Week

Target Corp. (Minneapolis) will open four “pop-up” stores around New York this week to sell fall merchandise by its 22 designers.

Target is calling these temporary stores “bodegas” (Spanish for “stores”) to convey an egalitarian and very New York shopping experience, said Kathee Tesija, Target’s executive vp, merchandising. They will be located in vacant storefronts in Midtown Manhattan, Union Square, SoHo and the East Village, and will open Friday, September 12, which is the end of Fashion Week.

The pop-up stores will be open for four days, from 10 a.m. to 10 p.m., selling merchandise averaging $25 in price. “We can emphasize ‘Expect more’ or ‘Pay less,’ depending on the economy,” Tesija told The New York Times, playing on the company’s tagline. “We are putting a little bit more emphasis on ‘Pay less.’ ”

Source: VMSD.com

MA: Hanover draws Target to new retail center

Passing motorists see only boulders and tree trunks. But the town of Hanover envisions a retail hub for the site on Washington Street (Route 53) between Mill and Pond streets, and already has secured a prominent national retailer.

Target Corp. has agreed to set up shop in a 137,000-square-foot building that will serve as the anchor for the Washington Street Shopping Center complex. According to Town Planner Andy Port, the town hopes to have the store opened by late summer or early fall 2009.

The new Target will be the largest single retail store in Hanover, according to Port. While the Hanover Mall is larger in overall size, it houses dozens of individual retailers.

Though Target will serve as the centerpiece for the site, which is in its early excavation and grading stages, plenty of other construction is already planned.

The former Decathlon Sports building, which more recently housed a furniture retailer, will not be demolished. Instead, the existing structure is to be expanded and incorporated into the new complex.

"The building will be expanded by construction by 10,000 square feet," said Port. "This will house two large retail units, and will be about 50,000 square feet total."

Another new retail building will be constructed, and at 17,000 square feet, will house five smaller retail units.

To make the center more than just a shopping destination, two restaurants, at 6,000 to 7,000 square feet each, are also planned for the site. Tenants for the smaller retail units and restaurants have yet to be confirmed.

The Washington Street Shopping Center project was bolstered by the continuing road-widening project along Route 53. "The road-widening has been in the works for a while, but Target probably wouldn't have found the site as beneficial without it" and would have had to pay to widen the road in order to prevent backups, Port said.

Due to the anticipated increase in traffic from the shopping center, Target will be required by both Massachusetts and town law to install a lighted intersection and turning lanes to facilitate entering and exiting the complex, similar to those just up the road at the Hanover Mall.

Source: Boston Globe

Target to Open Designer-Focused Stores in New York

Target, continuing its flirtatious relationship with Manhattan shoppers, plans to open four “pop-up” stores around the city next week to sell fall merchandise by its 22 designers.

Fashions and accessories by three of them — Sigerson Morrison, Jonathan Saunders and Anya Hindmarch — will be sold in the city a month before they are available anywhere else in the country.

The retailer will not open its first full-blown store in the city until next year, but it has been plastering its bull’s-eye logo around the city for years — on a big billboard in Times Square; in a fashion show with models, supported by ropes, walking down the side of a Fifth Avenue skyscraper; and by projecting images of its fashions inside Grand Central Terminal.

“New York is the place you go to get noticed,” said Kathee Tesija, Target’s executive vice president for merchandising.

Target is calling these temporary stores bodegas to convey an egalitarian and very New York shopping experience, said Ms. Tesija. They will be located in vacant storefronts in Midtown, Union Square, SoHo and the East Village, and will open Sept. 12, which is the end of Fashion Week.

“The idea was really generated based on the Target take on Fashion Week,” she added. “This would be a way we could bring affordable design to the masses.”

At the pop-up stores — which will be open for four days from 10 a.m. to 10 p.m. — merchandise will be priced on average at $25.

Target often sells less expensive offerings from brand-name designers. In the spring, Rogan Gregory, whose designs are sold in Barneys New York for $230 to $450, created a line of clothes for Target that sold for $14.99 to $44.99. Several pieces from the collection, though, are now on clearance. A Rogan for Target sleeveless button-front dress is marked down to $8.74, from $34.99, on Target.com.

As much as Target is promoting its fashion credibility in New York, it is also focusing on its role as a discounter for struggling consumers across the chain.

“We can emphasize ‘Expect more’ or ‘Pay less’ depending on the economy,” said Ms. Tesija, playing on the company’s tagline. “We are putting a little bit more emphasis on ‘Pay less.’ ”

In its circulars, Target is advertising fewer items and giving more prominent display to prices. In its stores, many displays draw attention to low-price sundries.

Target reported that profit for the three months ended Aug. 2 fell 7.6 percent, to $634 million, compared with $686 million, for the same period last year.

Sales at stores open at least a year, a measure of retail health, declined 0.4 percent for the quarter.

“The merchandise mix of, say, Wal-Mart for example is much more suited to customers now than the merchandise mix of Target,” said Bill Dreher, an analyst with Deutsche Bank. “Wal-Mart is much more of a supermarket-style discount store, and Target’s much more of a department store-style discount store.”

Analysts say the current economy is not suited to Target’s core strengths, but its prospects are nonetheless strong.

“What’s unique about Target within the American retailing landscape is they still have immense opportunity to grow,” said Mr. Dreher, adding that the retailer could easily double, even triple, the number of its stores, particularly in areas like New York and New England.

In Manhattan, he suggested, Target would be a logical successor to the retail space currently occupied by the aging Kmarts at Pennsylvania Station and Astor Place, near New York University.

“You could imagine most of the N.Y.U. dorms being outfitted from that store,” Mr. Dreher said.

Source: The New York Times

Target Slows Expansion as Net Falls

Discount retailer Target Corp. will curb store expansion and tighten credit-card terms after reporting fiscal-second-quarter net income fell 7.6% because of credit-card write-offs and weak sales.

The Minneapolis store chain said profit from credit-card operations fell sharply for the fiscal quarter ended Aug. 2 as a result of write-offs and the sale earlier this year of a half-interest in its credit-card receivables.

CONFERENCE CALL

"August is a great leading indicator. We said beginning of the month we expected minus three to minus one in same-store sales, and I remarked earlier that we've seen quite a bit of volatility. If the first ten days were all we had to look at, clearly we would be very concerned about our ability to meet even minus three. Sales are on a better pace since then, which alleviates some of that concern, but clearly we're in for a more challenging period." -- Doug Scovanner, Target CFO

Read the full transcript of Target's conference call, provided by Thomson StreetEvents (www.streetevents.com). (Adobe Acrobat Required.)

The operation, which had been delivering strong profit, reported income tumbled 65% to $74 million, from $213 million a year earlier. In May, Target sold a half-interest in its card receivables to J.P. Morgan Chase & Co. for $3.6 billion.

The company said it is slowing the growth of its credit-card portfolio and revising credit terms to counter higher bad-debt expense. Credit losses this year will run between 8% and 9% of loans, higher than its spring forecast, and higher than the 5.9% of loans in the last fiscal year.

It said growth in credit-card receivables, which increased at an about 27% rate in the second quarter, will moderate into the teens by the fourth quarter.

Target has successfully managed inventories and labor expense controls to avoid profit-sapping mark downs and expenses, Gregg Steinhafel, chief executive, told investors Tuesday. Retail gross margin, a measure of profitability, rose slightly in most areas, he said.

Net declined to $634 million, or 82 cents a share, from $686 million, or 80 cents a share, in the year-earlier quarter. Per share profit increased as a result of stock repurchases that reduced the number of shares outstanding.

Revenue rose 5.8% to $15.47 billion. Retail sales, excluding credit-card revenue, rose 5.6% to $14.97 billion, from $14.17 billion boosted by new store openings. Sales at stores open at least a year, a measure of retail-market share, declined 0.4% in the quarter.

Target, which gets about 40% of sales from clothing and home decor, has been harder hit in the downturn than discount rival Wal-Mart Stores Inc., which gets about 40% of its sales from consumables, such as groceries. Wal-Mart has reported strong same-store sales gains all year.

Doug Scovanner, chief financial officer, said Target will trim about 20 stores from its new store openings next year. Target had previously said it planned to open between 90 and 100 stores this year and next.

Economic conditions continue to be volatile. The total use of credit cards for store purchases, which had been rising, was flat in the fiscal first quarter and down in the second quarter, he said. "The use of credit cards is determining our same-store sales," Mr. Scovanner said.

Source: Wall Street Journal

Stimulus checks, back to school to aid retailers' July

NEW YORK (MarketWatch) -- Retailers' sales are expected to continue to get some lift in July from the last batch of the U.S. government's stimulus checks was mailed and back-to-school purchases increased by aggressive promotions.

U.S. retailers' sales at stores open at least a year in July are expected to rise 2.2%, its fourth straight monthly gain when companies report Thursday, according to a survey of analysts by Thomson Reuters. The gain, pales against a 2.9% growth rate a year earlier as the U.S. economy softened the past year.

Same-store sales are a key retail performance benchmark, because they exclude sales from new and recently closed locations.

The U.S. government's $100 billion-plus in stimulus checks have helped sales in the past three months. Demand also was lifted by clearance sales and other promotions; tax-free holidays in states such as Virginia; and by warmer weather that lifted demand for such items as T-shirts and shorts.

Still, while sales are expected to see a lift, analysts said concerns linger regarding the outlook for the rest of the year, especially after back-to-school shopping is completed in September. Gasoline prices have pulled back, but still are near a record high level that's changed U.S. consumers' shopping patterns and led them to reduce trips to malls and consolidate purchases in one-stop trips.

"Back-to-school happens every year and parents are budgeted for it," said Jharonne Martis, an analyst at Thomson Reuters. "After August there is no back-to-school or rebate checks to boost consumer spending. We will see then how robust the U.S. consumer can be."

Value-oriented retailers in their respective segments, from discounter Wal-Mart Stores Inc. and wholesale club Costco Wholesale Corp. to off-price retailer Ross Stores Inc. and teen retailer Aeropostale Inc. are expected to outperform in their respective segments, analysts said.

Department stores and specialty apparel retailers that sell more discretionary merchandise will continue to be laggards as penny-pinched consumers cut back on clothing and accessories purchases in the face of rising food costs and other economic malaise, analysts said.

While retailers market graphic prints and skinny jeans to excite shoppers, the apparel retailers in general have suffered from lack of a major must-have fashion item, analysts said. To spur shoppers, retailers such as J.C. Penney Co. launched exclusives with designer tie-ups such as Kimora Lee Simmons' Fabulosity. They also have touted value, started their back-to-school season earlier or signed special partnerships on a nationwide scale to draw demand.

"It's a tale of two retail worlds, Wal-Mart and everyone else," said Michael Niemira, chief economist of International Council of Shopping Centers. "Everyone else' is still struggling with the economic environment." Wal-Mart, with its "Save Money. Live Better" tagline, has outperformed its chief discount rival Target Corp. It in July raised its profit forecast after reporting better than June sales at both its namesake and Sam's Club chains. While Wal-Mart expects July sales to rise between 2% and 4%, Target sees its July sales in the range of minus 1% to plus 1%.

While discounters and wholesale clubs are expected to fare better, they also are not excluded from the dilemma retailers face of whether to raise prices to offset rising costs or risk losing market share. Costco, which has been a beneficiary of shoppers making one-stop trips to purchase bulk items at lower prices, in late July warned that its fourth-quarter profit would miss analysts' estimates, hurt by its strategy to hold prices in check to lure shoppers in the face of rising energy and other commodity costs.

Source: MarketWatch.com

Target, Best Buy Debut at $400M Center

Stafford Park

STAFFORD TWP., NJ-Two major tenants at the $400 million Stafford Park here are scheduled to open their doors by the end of the month. Target will debut a 137,000-sf space and Best Buy will operate out of 30,162 sf. It is the first store in the Stafford Township market for both retailers.

The two stores join Costco, which opened last month. Costco and Target will anchor the 650,000-sf retail portion of the mixed-use development, which will consist of retail, residential and office space. Fellow retail tenants include Dick’s and PetSmart. According to Ed Walters, founder and partner of the Walters Group--the company developing the site--leases are also being negotiated with Vitamin Shoppe, Longhorn Steakhouse and T-Mobile.

Source: GlobeSt.

Construction of the Target building began in September 2007, and ground was broken on the 100,000 sf building that will house Best Buy, Dick’s and PetSmart in January of this year. Construction was preceded by a $31 million cleanup of the 370-acre site, where two landfills once stood.

"What we’re doing here is we’re bringing Target, Costco, Dick’s and Petsmart to o

Barneys Loves Target: Retailing's Odd Couple Takes Marketing Leap

NEW YORK — Talk about strange bedfellows.

The teaming of Target Corp. and Barneys New York has to be one of the oddest pairings in recent fashion history. The mass market purveyor of everything from diapers and lightbulbs to blenders and dog food will introduce its eco-friendly Rogan for Target's Go International line at Barneys' Madison Avenue flagship on Friday until Sunday, and then at Barneys' Los Angeles store from May 16 to 18. Barneys will limit purchases to three pieces. The line will only be in stock for five days and, after that, shoppers will have to wait for the collection's debut at Target as part of its Go International line.

The arrangement is not without irony — and lots of questions. Barneys sells designer Rogan Gregory's primary line, which features trousers for $230, dresses for $320 and anoraks for $450. Rogan for Target will be priced between $15 and $45. Barneys presents itself as an arbiter of style, selling collections by everyone from Balenciaga to Lanvin at prices that can run into the thousands of dollars for a single piece. Target prides itself on style on the cheap, with a hype machine that often promises more than the stores deliver. Just consider the odor of pizza or pretzels that greets customers as they walk through its doors.

So why is this odd couple getting together?

Target's aspirational low- and moderate-income customers, who are being squeezed by the economic downturn, may be forgoing new clothes in favor of necessities or turning to stores with sharper prices, including Wal-Mart. Target's same-store sales have come under pressure in recent months and it also has to rebuild its apparel business after losing its personification of fashion, Isaac Mizrahi, who's not renewing his contract at the end of the year.

Barneys, meanwhile, is said to be having some difficulty in markets such as Chicago and Houston. And in common with many luxury retailers, it is battling the turbulence created by the weak economy. The retailer also has a new owner — Dubai-based investment fund Istithmar — that is eager to roll out more full-line Barneys stores as well as Co-ops. Some observers have said the Co-ops outside of New York are struggling somewhat, while Barneys tried an aggressive expansion of flagships in the early Nineties, only to end up in Chapter 11 in 1996.

But will Target benefit from Barneys' cachet? And does Barneys really need Target? Many observers question the strategy.

"I think it's going to confuse and not satisfy the customers," Michael Lichtenstein, owner and founder of Group L Consulting, a licensing firm in New York, said about the Barneys-Target deal. "It's one thing to have Karl Lagerfeld do an H&M line. It's exciting, it's news and everyone understands what that means. Even if it's for a short period, it's going to be a hit. This doesn't tell anybody what's happening and why it's happening. It's merely doing something to be different than thinking about what the [Barneys] customer wants. I don't think a Barneys customer wants a Target product."

Erin Armendinger, managing director of the Jay Baker Retailing Initiative at the Wharton School of the University of Pennsylvania, said her reaction when she heard of the arrangement was "sort of perplexed. I think it's really odd. I'm not sure what everybody's getting from this. I don't know why Barneys needs Target. I'm not sure a Barneys customer is going to be a Target customer. It is Target, but at the end of the day, it still is Target. You have to be careful with these partnerships and whose casting what on whom."

Having the products of one designer selling for two different price points in the same store can confuse and alienate customers. "When they're in the same store it's pushing the limits," Armendinger said. "When you have $29 jeans and $250 jeans from the same designer, consumers will start to ask, 'Is that fabric really worth 10 times more than the other fabric?'"

While there seems to be no relief for the ailing economy in sight, Target is also facing the task of replacing a major revenue generator for its clothing business. The chain in January acknowledged that Mizrahi would be leaving to take up the design reins of the Liz Claiborne brand. Mizrahi's line did about $300 million at Target and analysts estimate the retailer will have to replace $400 million to $500 million of lost revenue upon his departure, given that shoppers buying Mizrahi clothes also bought other products while in the store.

Target so far has said its focus going forward will be on the Go International line with young, up-and-coming designers — but that represents sales of only "north of $100 million," said Robert Buchanan, a consultant for Goldman Sachs' Vantage Marketplace subsidiary.

"They've got a hole now in their assortment," said Armendinger, referring to Target. "They added handbags and accessories to the Go International program, but Go has gotten tiring. There's this constant change of [collections], it's like they're saying, 'This is cool. No, this is cool. No, this is cool.' H&M does a better job with really big designers sold for short periods of time and launches that are really spread out. Go is dizzying because at the end of the day you're wondering, 'Who is Target?'"

Bill Dreher, a retail analyst at Deutche Bank, said Target introduces Go designers so frequently because "they want the rotation every six weeks so they get that customer into the store every six weeks. On average, the Target customer goes to the store once a month. By contrast, the Wal-Mart customer visits a Wal-Mart unit once a week. The difference is food" with Wal-Mart's grocery business far more developed than Target's.

Armendinger said that Mizrahi gave Target a consistent image, which built recognition year after year. The retailer is certainly working on a post-Isaac strategy, but hasn't released any details. "They have to be looking at it," she said. "This is a difficult environment for a good company. When a company is losing it a little bit, there's nowhere to hide in this economy."

According to Retail Metrix, analysts' consensus estimate for Target's comp-store sales is a 4.3 percent increase for April. The retailer will offer a reading of April results on Thursday.

Target's financial performance picture hasn't been rosy. Same-store sales fell 4.4 percent in March, while comps in February inched up 0.5 percent. Same-store sales declined 1.1 percent in January. In February, Target's stock fell in the wake of a Citigroup downgrade that was critical of its women's apparel offerings. Deborah Weinswig, an equity analyst at Citigroup Global Markets, said there was a lack of focus in Target's women's fashions, risk in its credit card portfolio and the perception that Wal-Mart is the discount price leader. "On the apparel side, they've kind of lost their way a little bit," Weinswig said. "It's kind of a sea of sameness now. It used to be a very interesting place to shop." Weinswig also said there's been too much focus on Go International "because that's the sexy part" of the business, but not the bread and butter.

Target's slick advertising and designer cachet helped bolster its cheap-chic image, but now the retailer must continue to stay fresh to draw shoppers at a time when driving traffic through stores has been difficult. "The newness factor has probably worn off a little bit, so they just have to continue reinventing themselves," said Tiffany Co, debt analyst at Fitch Ratings.

In its single-minded quest to bring upscale brands to its stores, Target has sometimes lost sight of the bigger picture. An effort to upgrade its skin care offerings led Target to sell brands such as Origins, Bumble and bumble, StriVectin and Clarins by sourcing them from the gray market and without those companies' approval.

Target on Monday said it had agreed to sell an interest in its credit card receivables to J.P. Morgan Chase & Co. for about $3.6 billion. Charge-offs for accounts that are 180 days delinquent are rising and Wall Street continues to be cautious about investing in lending operations. The interest represents approximately 47 percent of the principal amount of Target's outstanding receivables.

According to Buchanan, Target's credit card business this year will account for more than 20 percent of operating profits or $1.15 billion in operating profits before interest expense. The company's total operating profit this year is around $5.4 billion, he said. "Target wants to continue to control the credit card and drive the marketing, but at the same time gain access to somebody else's capital," he said.

"The Target juggernaut is slowing," said Suzanne Hader, principal at 400twin Luxury Brand Consulting. "If they want to continue on this tack, they should look into spinning off a new retail concept where they can distill some excitement around these lines into a smaller format that's more easily adaptable to Manhattan. Barneys is looking for a way to differentiate themselves from Saks Fifth Avenue and Neiman Marcus, so this will help them seem hipper and less stuffy. If that's their aim, there are more effective ways of accomplishing that."

The names of Go guest designers are likely obscure to typical Target shoppers — Luella Bartley, Tara Jarmon, Erin Fetherston, Paul & Joe — but the company recently introduced a Go International private label line, New Next Now, sans the name of a designer, leading some experts to wonder whether the company will add a generic Go label to its permanent roster. New Next Now is less edgy than previous collections, with simple tank tunic dresses, one-shoulder jersey dresses in solid colors and high-collar, ruffle-front shirts.

Those who know Gregory and his partner, Scott Hahn, said they were eager to sell to Target once they were assured the mass retailer was committed to producing an organic collection. Julie Gilhart, Barneys' senior vice president and fashion director, has a passion for the environment and was instrumental in enlisting top designers to create eco-friendly products for the store. She is said to have been keen on launching Rogan for Go International to show support for the mass merchant's nascent green efforts.

"Barneys and Target was kind of serendipitous," said Gregory. "We know it will be a benefit [to our business]. The Target thing came about this time last year. It's nice to be able to offer this true expression of my vision. Target is doing hundreds of thousands of garments. They gave me everything I asked for. I feel privileged to speak to both the high and the low end."

Asked whether Rogan customers will view the Target line as a conflict, Gregory said, "We don't do safari here. It's so much a different product, aesthetically. Every piece in here we make 10 of, whereas Target's minimum is 10,000."

Yet even here the supposedly cutting-edge mass retailer is behind the curve. Wal-Mart has been much more outspoken and proactive about the environment in recent years, selling 100 million energy-efficient compact fluorescent lightbulbs within a year, reducing packaging and using organic cotton in some of its apparel Again, Target's tie-ups with Rogan and Barneys may be as much about hype and hopping onto the bandwagon of an issue that is now in the spotlight as it is about any revenues.

"Clearly what Target is doing with Barneys is all about marketing and branding," said Wendy Liebman, founder and president of WSL Strategic Retail. "To have that opportunity to present the line there for a few minutes....In terms of the New York market, there's the prestige and it's a good marketing tool. For Barneys, this is a way to surprise people. There's all this fast fashion going on; Barneys is saying, 'We can take a little poke at [ourselves] and have fun with it. We can give our Barneys shoppers a chance to get a good value for a few days.' It will create a little bit of anarchy and a little bit of buzz."

Designers who have done a stint with Target were generally positive about the experience, but said it didn't boost sales of their core collections. "It helped my brand to gain exposure in a new market with a new audience," said Behnaz Sarafpour. "It has not had an effect on the selling of my designer collection."

"Since it was only a three-month capsule collection, it did not affect sales from our main collection in any way," said Holly Dunlap, who recently designed a Hollywould shoe and handbag line for Target. "People loved to be able to buy Hollywould products at such a low price, and we were able to reach a wider audience than we can at our usual price point. The products I did for Target were not too similar to our main collection, so there was never any confusion and the difference was kept very clear."

One Go participant said Target pays $100,000 for a designer's efforts — no matter how much revenue the line generates for the retailer. Another designer said, "They pay a designer fee and it's substantial. For the amount of exposure and credibility Target gives you, it's a pretty fair compensation. It's not something you can retire on, but it's a quick-turn project."

Source: Women's Wear Daily

Big-box retailers undaunted by slow economy

LOS ANGELES (MarketWatch) -- Can big-box retailers keep growing briskly, given the current downturn in the economy? For the most part, yes, but it depends on what's inside the box.

While a select few retailing giants -- namely home-improvement retailers -- have had to curtail expansion plans, others are continuing as if recession talk is nothing more than idle chatter.

Companies like Target Corp. , Costco Wholesale Corp. and Best Buy Co. are carrying on with expansion plans at virtually the same pace as in years past.

"We continue to look at a standard of 100 net new stores a year," Target spokeswoman Anna Goeppinger said. In fact, Target's rate of expansion has quickened, as it built 118 new stores last year and is on pace for 116 this year. In 2005 and 2006, the company added 86 and 88 new stores, respectively.

For the most part, today's retail giants don't suffer in the same way that most retailers do when gasoline prices climb and pocketbooks get pinched. While they may make adjustments, they're big enough to absorb the shock, according to industry experts.

"They really are looking through the economic time because their stores will open after the bad economic times have passed," said Jim McComb, president of retail consultancy McComb Group based in Minneapolis, home to Best Buy and Target headquarters.

The biggest box of all, Wal-Mart Stores Inc. , is curtailing its expansion efforts, although company executives insist that it's not recession-related. The world's biggest retailer is beginning to saturate the North American market, so now it's looking to grow more quickly overseas.

Wal-Mart said as recently as October that it plans to completely phase out new construction of its conventional outlets by fiscal 2009 in favor of its grocery/discount-goods supercenter stores. Development of all new Wal-Mart outlets, including Sam's Club and its group of neighborhood markets, will eventually be cut to 190 by fiscal 2010, down from the 340 new locations that were opened last year.

The subsiding-expansion plans were formulated several years ago and there are no plans to alter them, said Wal-Mart spokesman Phillip Keene, even though economic conditions have worsened since they were outlined six months ago. In fact, the company is stepping up its international expansion efforts at a fairly brisk clip. "There's been no change from this outline," Keene added.

Home-improvement blues

That hasn't been the case with two major big-box home improvement retailers. Home Depot Inc. and Lowe's Cos. are feeling the pinch as the real-estate market drops and new-home building subsides.

Last month, Home Depot scrapped plans to put its first-ever store in San Francisco despite wrangling with reluctant city officials for nearly a decade. In 2005, the city's Board of Supervisors had approved the construction of a Home Depot, but the company backed off in light of rough economic conditions.

"We evaluated the deal and found that it no longer worked for us," said Home Depot spokeswoman Sarah Molinari.

Home Depot has curtailed much of its new-store building throughout North America, cutting back to 55 new stores this year from 100 last year. Capital-expenditure spending will be down 32% from a year ago, to $2.3 billion.

The company is looking to spruce up its existing stores and find ways to improve service, as well as invest in its supply chain, according to Molinari. She also said that much of the curtailing in Home Depot's expansion activity is that like Wal-Mart, the company is reaching market saturation.

At one point, Home Depot was building 200 new stores a year, Molinari elaborated.

That kind of pulse-quickening expansion is unlikely to return, it appears. "I just don't think we're at that point in our business. I think we're past that point," she added.

Lowe's, on the other hand, still is growing rapidly, though it has delayed the opening of 20 new outlets this year in markets where the housing crunch is acute, said spokeswoman Chris Ahearn. Most of the delays are in California and Florida markets.

The company still plans to open 120 other stores, she noted. Lowe's would not reveal precisely where it is holding off on construction. "Again, they're delays. We're not canceling stores," Ahearn said. "We still have an aggressive expansion plan."

Markets that didn't experience a massive housing bubble, such as Texas and Oklahoma, are still ripe for new properties. Lowe's has 1,525 outlets in all.

Urban problem

Home Depot's San Francisco experience exemplifies the dilemma now faced by home-improvement centers. Buying or leasing land in pricey urban areas will cut deeply into their return on investment, said Craig Johnson, president of Customer Growth Partners, a retail consultant.

When economic conditions weaken, that takes a lot of steam out of a Home Depot or Lowe's that is looking to venture outside its comfort zone of suburban strip malls.

"Even in good times, it's a reach," Johnson added.

Companies that seem to be clinging to good times are Best Buy, Costco and Target. Best Buy said that it could stand to build another 500 stores in its various markets, so it plans to open 130 to 160 of them over the next fiscal year. That's about the same pace at which Best Buy has grown over the past several years, according to company spokeswoman Sue Busch.

Best Buy is hoping to use the current economic situation to its advantage and to expand its market share as some of its rivals retreat. "Right now, this is where the focus is," Busch said.

Its main competitor, Circuit City Stores Inc., has seen its stock price tumble, and it has become a takeover target for Blockbuster Inc.

"Smart retailers will use down markets as the most cost-effective time to build market share," Johnson commented. "I think Best Buy is doing a very good job of this."

The same goes for Costco, Johnson said. The membership-warehouse retailer may be seeing its nonfood sales drop, but its food and low-price gasoline have grown more attractive to consumers.

The company plans to open 30 to 35 new units this year and to relocate 10 more stores, spokesman Bob Nelson said.

Costco should continue on that pace in the foreseeable future. "We have no plans to curtail next year," he added. "We're cautiously optimistic that things are going to get better."

Source: MarketWatch.com

Lakeville, MA plaza on hold after Target pulls out

LAKEVILLE — Target, the major retailer slated to anchor the proposed commercial development at the former Lakeville Hospital, is no longer interested in the location, and the entire project is now on hold.

"We are no longer pursuing a Target in Lakeville, Mass.," said Anna Goeppinger, a spokeswoman with the Minneapolis-based retailer.

Representatives with developer National Development did not return phone calls from The Standard-Times seeking comment Thursday. However, Jack O'Neill, a managing partner with the developer, told the Middleboro Gazette this week that the troubled project is on hold.

"We are not in a position to go forward," Mr. O'Neill told the Gazette, a sister publication of The Standard-Times.

Besides Target, the commercial development called for a supermarket and restaurant. Target initially was scheduled to open last summer, but that date was later revised to this summer.

On Thursday, Ms. Goeppinger cited site-specific work costs related to water and sewer prices as the reason the retailer pulled out of Lakeville.

"We will continue to explore alternatives to serve this market, but just through other surrounding communities," she said. In SouthCoast, Target has stores in Dartmouth and Wareham.

Water and sewer issues with Middleboro have led to significant delays in the project, an issue that Lakeville officials thought had been resolved. The project, initially proposed in 2003, also has been delayed by the redesign of Route 79 at Route 105, which would cut through part of the property.

The latest news comes as a blow to cash-strapped Lakeville, which expected to receive $800,000 in permits alone.

"It's not great that it's breaking up four days before the election," said Nancy E. Yeatts, selectmen chairwoman. "I'm very disappointed. I worked very hard."

Ms. Yeatts, who is up for re-election Monday, was the town's main negotiator with National Development on the proposed project. She has been criticized by opponent Philip Oliveira for not doing enough to bring the revenue-generating project to town faster.

"The town of Lakeville bent over backwards to make this happen," Ms. Yeatts said. "Every step of the way, we've done what we needed to do to keep it going."

National Development had initially proposed the construction of a Target, Stop & Shop and Chili's Grill & Bar on the 72-acre property. Short of the old Lakeville Hospital itself, Stop & Shop and Target would have been the two largest structures in town, with a 63,667-square-foot Stop & Shop, a 126,842-square-foot Target and a 5,800-square-foot Chili's.

The former hospital still sits on the site, despite announcements of its demolition last year. Before it can be demolished, the building needs expensive asbestos-removal work.

National Development purchased the hospital property at auction from the state for $2.4 million in 2002. The hospital had been closed for about 10 years. The property is assessed at $10.79 million and the land at $6.27 million, according to the Lakeville assessors office.

While the retail project could be dead, Lakeville's Ms. Yeatts said she believes National Development is watching the progress of the proposed Mashpee Wampanoag casino before proceeding with development plans.

"They're waiting to see what happens with the casino. There could be something more profitable there if the casino came, like a hotel," Ms. Yeatts said.

Mr. O'Neill told the Gazette that development of the site does not depend on the proposed casino.

Source: SouthCoastToday