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BUSINESS A25
Friday 4 March 2016
Target Corp. ramps up spending on supply network
A. D’INNOCENZIO The Minneapolis-based dis- penditures. ucts like diapers on the this year’s projected rise of
AP Retail Writer counter told analysts this The spending comes as Tar- shelves. 1.5 percent to 2.5 percent.
NEW YORK (AP) — Target week at its annual meeting get, Target also sees a key rev- In its last fiscal year, it post-
Corp. is stepping up spend- it plans to spend $1.8 billion enue measure increasing ed a 2.1 percent increase.
ing on capital expendi- for the current year and like other retailers, grap- at a faster clip next year. Target is also forecasting
tures, primarily in its supply ramp that up next year to ples with an infrastructure The retailer believes that 10 percent growth in earn-
network and technology, up to $2.5 billion. In the last that has been stretched revenue at stores opened ings per share for next year.
as the retailer aims to be fiscal year ended in Janu- with shoppers buying in dif- at least a That’s on top of the $5.20 to
more nimble in an era of ary, the company spent ferent ways. year will be up at least 3 $5.40 per share it expects
online shopping. $1.4 billion in capital ex- That has left Target strug- percent, compared with for the current fiscal year.q
gling to keep basic prod-
Sports Authority stumbled as shoppers moved online
MARCY GORDON A woman leaves a Sports Authority store, in New York, Wednesday, March 2, 2016. Sports Authority J.C. Penney Co. is using
AP Business Writer is filing for Chapter 11 bankruptcy protection. The Englewood, Colo., company has 463 stores in store-label offerings to fight
Fans coveting their favorite 41 states and Puerto Rico. against pricing pressures
team’s jersey with the per- from online rivals and re-
sonal touch of their name (AP Photo/Richard Drew) cently launched a new
on the back are flocking campaign called “Get
online, likely not to the al stuff. And even heavy Dick’s Sporting Goods. Overall, the retail indus- Your Penney’s Worth,”
sports store at their local They’re all under pressure try has struggled with the which offers certain store-
mall. Consumer habits are exercise equipment is find- from the Internet, says Ga- consumer move to online label items for pennies.
evolving. nis, but regional chains like shopping, trying to find Sports Authority, which is
That looks to be one of the ing an online audience. Modell’s, as opposed to ways to lure customers to privately held and based
developments behind the national companies, have brick-and-mortar stores. in Englewood, Colorado,
financial travails of retail “There’s tremendous a better time of it. They can Macy’s Inc. has opened said it intends to close or
chains like The Sports Au- more easily put on promo- Macy’s Backstage in order sell about 140 stores and
thority Inc., which filed for movement to online sales,” tions of home-team gear, to go head-to-head with two distribution centers, in
Chapter 11 bankruptcy for example. discount retailer T.J. Maxx. Denver and Chicago. The
protection this week and Ganis said. “It has really im- company has 463 stores in
plans to close or sell about 41 states and Puerto Rico.
a third of its 463 stores. pacted the big-box sports The store closings are ex-
The seemingly bottomless pected to take up to three
inventory online of team- retailers.” months. Sports Author-
branded apparel and ity stores will remain open
equipment — contrasted Other companies in that and run on normal sched-
with a limited supply in ules during the Chapter 11
stores that have to be re- category are Modell’s and process. The company’s
stocked — adds to the website will continue to
cheaper price advantage function, and the chain
of the Internet, notes Marc plans to honor warranties
Ganis, president of Chica- on items purchased at its
go-based consulting firm stores or online. “We are
SportsCorp. And it can be taking this action so that
easier to get team clothing we can continue to adapt
personalized online. our business to meet the
Millennials, especially, are changing dynamics in the
attuned to the point-and- retail industry,” CEO Mi-
click of Internet purchasing chael Foss said in a written
and also like to get person- statement. q
Canadian Pacific approached CSX on deal while pursuing NS
JOSH FUNK Canadian Pacific CEO declined to comment. proached Norfolk Southern deal, which calls for setting
AP Business Writer Hunter Harrison said his rail- The reported contact with last fall about the possibility up a voting trust to oversee
OMAHA, Neb. (AP) — Ca- road remains committed to CSX reinforces how inter- of combining the two rail- both railroads and installing
nadian Pacific reportedly its roughly $30 billion bid for ested Canadian Pacific of- roads. The offer has been Harrison as CEO of Norfolk
approached the CSX rail- Norfolk Southern, which is ficials are in joining with one revised and rejected sev- Southern while regulators
road about a possible based in Norfolk, Virginia. of the Eastern railroads, but eral times. Norfolk Southern review the deal.
merger earlier this year “We’ve said all along that if it doesn’t necessarily make has said it believes Cana- Norfolk Southern believes
while it continued to pursue we looked at the synergies a deal likely to succeed, dian Pacific’s offer is grossly that would violate a pro-
its proposed takeover of ri- between the two Eastern said Citi analyst Christian inadequate, and it ques- hibition against an acquir-
val Norfolk Southern. carriers, right now both of Wetherbee. A deal faces tions whether federal regu- ing railroad taking control
The latest overture to Jack- them would work for us,” significant regulatory hur- lators would approve such of its target before a deal
sonville, Florida-based CSX Harrison said to The Wall dles because no major rail- a merger or impose costly is approved. Canadian Pa-
was first reported by The Street Journal. Canadian road mergers have been conditions on the deal. cific also plans to ask Nor-
Wall Street Journal. Cana- Pacific spokesman Martin approved since the fed- Canadian Pacific officials folk Southern shareholders
dian Pacific first contacted Cej said that quote is ac- eral Surface Transportation said earlier this week they at their annual meeting to
CSX in the fall of 2014 about curate. Board adopted tough rules have asked the board to vote on whether they want
a potential deal and was Officials with CSX and Nor- for them in 2001. review the proposed struc- the two railroads to discuss
rejected. folk Southern railroads both Canadian Pacific first ap- ture of the Norfolk Southern a possible merger.q
