Archived store closing?

[Iwork4target0101]

What are some tell tale signs that a store may be on the chopping block soon?

 

[Hardlinesmaster]

A new location near by & slow sales. Usually announce in November.

 

[OneGoodEar]

A new location near by & slow sales.

Not always, though. I know of a store that had high/low sales for years before another store opened up a mile away. That was 10 years ago.

 

[Hardlinesmaster]

Not always, though. I know of a store that had high/low sales for years before another store opened up a mile away. That was 10 years ago.

From the store closing thread:
Target are required to notify the local authority that they are going to cease operations and close a store,generally 60 days notice is required to my knowledge but Target give 90 days,that is why they make it known to the media at this time of the year as we are about 90 days our from our financial year end.All eligible employees are eligible to transfer to nearby stores,but that is the catch.I would expect that the stores that are closing to have number of people on final warnings and therefore will not be eligible to transfer.
Thanks
Tgtfla

 

[OneGoodEar]

Just to make it clear: Those same two stores are still open today.

Not always, though. I know of a store that had high/low sales for years before another store opened up a mile away. That was 10 years ago.

 

[Hardlinesmaster]

Just to make it clear: Those same two stores are still open today.

This happens yearly. They always assess their buildings and sales and see if improvements are worth it. Especially with all the remodels coming down, they probably are closing down quite a few because it is cheaper to rebuild somewhere else than remodel.

Rock Lobster

 

[SFSFun]

Not always, though. I know of a store that had high/low sales for years before another store opened up a mile away. That was 10 years ago.

Just to make it clear: Those same two stores are still open today.

Same thing happened in my district a few years ago. They built a new store 2 miles from one that had been open for decades, and sales were strong enough to support them both.

 

[HRZone]

What are some tell tale signs that a store may be on the chopping block soon?

Nothing obvious to the regular team member. Low sales are not the only indicator. I have seen A volumes close while D volumes keep going.

The number one indicator your store is closing is if you didn't get a remodel. Almost every store has got some form of remodel be it AA 2.0, market, electronics, home innovation. They aren't going to put money into a store that is closing.

 

[Kartman]

We need a bigger store, that's for damn sure.

 

[buliSBI]

I was in a high volume metro district that had initially 6 stores. It then grew to 12. Then within the last couple years only 1 store closed due to the immediate shopping area died because a mall closing, high crime rate of the local area, and multiple other Box stores closing.

My initial store was built in the 1970s and remodel several times. But remains a high volume store due to its shopping area vicinity.

In my former Target days, I lived in another area that had 15+ stores but only a couple closed because their buildings were so out of date and too costly to remodel.

Usually stores will not close just to poor sales unless the market was a complete loss. Age of building, Target concentration, shopping trends of the local market...

 

[No I in Team]

Being part of businesses that have closed, I would be willing to bet it is solely based on your ability to generate an acceptable profit margin.

I work at a LV store which has a monthly Gross Profit (Gross Sales - Cost of Goods Sold (COGS)) of about $500K per month on average. Other stores of similar square feet in the area do about $1M Monthly Gross Profit and some more than that. I believe I used .74 as the COGS ratio (.74 X Gross Sales). Using per sq ft will give you a better comparative analysis if you wish to look your store vs. other stores or what the company average is listed in the Annual Report. It's been a while since I researched this topic.

I extrapolated the numbers from the margins in our 2016 Annual Report just to see how far we're behind the other stores in our area. So reference them at your own discretion since they are estimates on averages and forecast. It's not difficult to do as long as you have access to your annual sales data for stores in your area (I had to ask) and their corresponding size in sq ft.

The stores I used sit on real estate owned by Target. So each of the Stores would still have to generate enough gross margin to cover the cost associated with the purchase of the land and improvements (building & contents). I did not look into what that cost could be.

That $500K/month we generate sounds like a lot, but factor in other variables and expenses not included in COGS and we could be shuttered at any time considering Target wants a return of greater than $5/per share (EPS). This appears to be a threshold by what the Market demands of us by the number of shares of outstanding stock. Now you know the reason behind why Target started buying back shares of stock - EPS forecast were not good.

There is a lot of data into calculating what your Gross Profit needs to be considered an ongoing business unit within Target Corp. Not enough time to explain it all and show the work. It's safe to say that my store is at the wrong end of the scale. It's just about at the end of it, if not slightly off currently.

As of now, I roughly say we're running at about roughly $450K Gross Profit. Not quite at that $500K Gross Profit we average over a twelve month period in the past. But we still have 4th Qtr to look forward to.

I say we could be shuttered at any time due in part by the additional cost from SFS, E2E (Store Modernization?), Flexible Fulfillment and other new ideas introduced by Target Management. Given my experience, I see a lot of additional cost with no visible efficiencies or gains. Eventually these "hidden costs" will come to the surface quickly as apparently ASANTS was not considered in implementation. Those of us with low margins will face a lot of scrutiny as an ongoing business units if they put too much pressure on our profitability without consideration to these additional burdens (ASANTS).

ASANTS is not good for any of us either. It's even worse for low margin stores. This is a systemic problem that will eventually shutter a lot of low margin stores if decisions are made based upon the fallacy that we all operate the same. We will become more inefficient and erode our margins to unacceptable levels. Target has no problem shuttering stores either as we average about twelve a year over the past decade (not including Canada).

I have not seen any time studies, nor any other type of quantifiable data that demonstrates an attainable cost savings and improved margins by these new programs. There should be something posted somewhere as to how this will increase our profitability while holding cost or reducing cost - NOT SALES INCREASES. Remember, we are measured by EPS, not Annual Sales. That's the bottom line.

None of this can even pass the eye test either at this time. One has to only look at this site to see that. We're all struggling in some form or another. The stores with higher Gross Profits have the ability to absorb these additional burdens as it is a much smaller expense comparatively due to the Gross Sales. But none the less they are proportional and will impact their bottom line. Eventually there will be consolidation of services and stores due to the shift to online business that will increase excess retail brick and mortar capacity.

So getting back to your original inquiry, just look around and if all doesn't appear good and doesn't look like it's going to get better, then it's not a long term gig. You have to rely on your position and what you see where your at. Don't let others influence you either. Remember, management is concerned about their own well being, not necessarily yours. Your leaving could adversely affect them.

By the way, about three years ago a Target Store in OH was closed without notice from what I understand. The mayor of the city was quoted in the local paper about having no notice and an empty building in their city. I cannot remember which store it was either. We received merchandise from them too. I'll try to find the article that a team member shared with me regarding this store's closing. I don't remember much else about it either other it was eerily similar to our store.

Just always be prepared and remember no matter who you work for, they will always be looking out for their best interest ONLY. That is why you look out for YOUR best interest always.

 

[bullseyekindaguy]

Not sure if this has been shared, but saw this on a Facebook group I follow. Store closing announcements have started with the Hutchinson,KS store.

Hutchinson Target store is closing - http://www.hutchnews.com/news/20171106/hutchinson-target-store-is-closing

 

[Hardlinesmaster]

Very sad

 

[unknown]

I can add that when my former store closed, there were signs from management all was not good. In hindsight, I can put them together now.

But I agree with your store not getting a remodel. If all the stores closer to you get a remodel, the same remodel, and yours doesn't, kiss of death.

I think, I have no proof, at that store, sales were low and theft high.

 

[command3r]

We just got the news our store is getting the axe in a couple months.

 

[BeelzeBecky]

I thought Target was doing well? This is horrible news!!!!

 

[HRZone]

I thought Target was doing well? This is horrible news!!!!

Relatively well but some stores are not profitable. Notice they are closing some stores while opening hundreds of express stores in big cities/collegetowns.

 

[OneGoodEar]

Relatively well but some stores are not profitable. Notice they are closing some stores while opening hundreds of express stores in big cities/collegetowns.

Aka urban stores

 

[pinktea]

I've been in a new Express that opened up recently...it was shiny and pretty, but felt SO claustrophobic. The aisles were so close together and there was no elbow room anywhere. I can't imagine working OR shopping there on a busy day.

 

[bullseyekindaguy]

Benton Harbor, MI

Target store in Benton Township to close in February - http://www.wndu.com/content/news/Target-store-in-Benton-Township-to-close-in-February-455719363.html

 

[bullseyekindaguy]

Relatively well but some stores are not profitable. Notice they are closing some stores while opening hundreds of express stores in big cities/collegetowns.

Target seems to close only a few stores at a time (10-15) instead of 'mass' closings like Kmart and Sears, who announce dozens of stores at a time.

 

[squirrely]

Benton Harbor, MI

Target store in Benton Township to close in February - http://www.wndu.com/content/news/Target-store-in-Benton-Township-to-close-in-February-455719363.html

That's the store closest to my hometown. It opened probably in the late 90's and never had a remodel. It looked ancient compared to most Targets

 

[HRZone]

Yup I recently shopped at an ancient target

 

[SoCalMama]

That could be my store except that the aisle signs are like round paper plates at my store. I think that our ceiling signs might be older than those? I know for a fact that the electrical and plumbing are from the previous tenant, so in excess of 30 years old.

 

[SoCalMama]

Benton Harbor, MI

Target store in Benton Township to close in February - http://www.wndu.com/content/news/Target-store-in-Benton-Township-to-close-in-February-455719363.html

I recognize this city. It has the lowest median household income in the state. I used to schedule contractors, and one of the cities on my list of locations was Benton Harbor. Nobody wanted to go there at all.