In 2017, the struggling megachain spooked Wall Street and earned mockery in the retail world by committing billions to revamping its stores. That Hail Mary pass connected for a touchdown: Today, more-inviting shopping floors and smoother e-commerce have turned Target into a winner again.
THE ROOM WAS NO BIGGER than a walk-in closet, a tight fit for Target CEO Brian Cornell and the team of executives and support staff who were sharing it. Sketchy air circulation made the room feel even more claustrophobic. And its cable-TV feed didn’t work—which meant the gang couldn’t tune in to see just how badly Wall Street talking heads were freaking out about Target’s stock.
The chamber, a “greenroom” at a former church turned event space on Manhattan’s Park Avenue, was an uncomfortable place to share an uncomfortable moment. It was Feb. 28, 2017; the executives were waiting to address Target’s annual investor meeting. About an hour earlier, Target had pressed the “Send” button on a news release announcing a make-or-break revival plan for the massive but struggling big-box retailer.
In the release, Target told the world it would sacrifice short-term profitability to make its prices more competitive with those of Walmart and Amazon. It would junk and replace some of its best-known brands. It would overhaul its e-commerce and raise wages for a large cohort of its 320,000 employees. And— most unnerving of all to cautious investors—it would undertake hundreds of extensive store renovations. Total price tag: $7 billion over three years.
Cornell and his leadership team were convinced that they had the right plan to reverse Target’s severe sales skid. But when their PR crew finally rigged up an iPad to stream CNBC, it became clear that few others agreed. A bemused anchor surmised that there must be a typo in the press release: What brick-and-mortar retailer would spend billions on stores in the Amazon era? Shares were down in premarket: They would go on to fall 14% that day, as investors concluded that Target’s profits would take a hit for years.
This story is from the September 2019 edition of Fortune.
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This story is from the September 2019 edition of Fortune.
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