This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

CityTarget: Major Disappointment, but Is It An Epic Failure?

NEW YORK ( TheStreet) -- I'm not much of a bricks-and-mortar shopper.

Unless there's something unique or otherwise stimulating about the physical retail experience, I stay away. By and large, it's a soulless proposition. There's little reason to do anything but stay home and shop online.

On a regular basis I visit the retail presences established by brands such as Apple (AAPL), Tesla Motors (TSLA), Lululemon (LULU) and Restoration Hardware (RH).


Because these stores have something to show me. I have never bought a darn thing from three of them, but I still visit regularly. And I'm hardly the only one. There's something powerful about that, at least when you're thinking about retail's hard times and how to transform the space.

We're morphing into a world where, increasingly, you do not need to go to physical stores for much. (AMZN) and other e-commerce successes have the things that do not spoil, but you must replenish covered. I bet it's not long before Amazon expands Amazon Fresh out of its Seattle-area pilot phase. Soon, they'll have the nation's groceries taken care of.

In the meantime, there's something to be said for keeping bricks-and-mortar retail alive.

It would be a shame to see it die. With a little vision and real risk taking, it can come alive again. Shopping can become something other than an online experience or, when done in person, a chore or urban sport.

Retail absolutely must step up its game.

This past weekend, I was excited to visit Target's (TST) new urban "concept" CityTarget.

The idea of a Target that appeals to city dwellers has always intrigued me. It has the potential to be something special. To leverage the unique sense of place retailers such as Whole Foods Market (WFM) use to layer their atmospheres in dense city centers.

With the qualifier that I have only visited the Westwood location (in West Los Angeles adjacent to the UCLA campus), it seems that Target has failed miserably, at least to breathe any new life whatsoever into bricks-and-mortar retail.

I always wondered why company executives don't say much about CityTarget on conference calls. And the analysts don't ask too many questions. While "urban" is not a major revenue generator today, it represents a massive opportunity that Target should hyper-focus on.

Here's pretty much all Target had to say about CityTarget on its most recent conference call:

... After 2 additional third quarter openings, we now have five CityTarget stores operating in four different metropolitan areas: Chicago, Los Angeles, San Francisco and Seattle. As expected, initial traffic to these stores have been strong, while gross margin mix has been slightly better than expected. The CityTarget team has done an outstanding job, accomplishing a virtually flawless launch of this new format. We plan to open three more CityTarget locations in 2013


Initial research indicates that the typical guest in this new urban format is younger and more affluent than we see on average across the chain. And as expected, these stores are attracting many new guests

And, like, duh!

If city governments and urban planning departments rolled over, found some space, loosened ever-tightening parking restrictions and permitted Target to place suburban-sized stores in urban areas, that's exactly what Target would have done.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TGT $79.50 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs