Target to ‘Move Faster’ in Introducing Private Label, Exclusive Brands, CEO Says
Target will “move faster” this year in introducing private label and exclusive brands, building on the 10 labels introduced in 2017, CEO Brian Cornell told analysts on Tuesday. Target recently launched its Opalhouse homegoods brand for 1,300 SKUs of bedding, bath, tabletop and other items and will add exclusive rain boots, outerwear and backpacks in April as part an agreement with British supplier Hunter. “We are going to introduce one new brand after another all year long,” Cornell said.
Sales of private label and exclusive brands were “phenomenal” in Q4 ended Dec. 31 and “drove traffic to other categories and inspired cross-shopping,” Cornell said. For example Hearth and Hand, the homegoods brand Target developed with Fixer Upper hosts Chip and Joanna Gaines, spurred sales of food items, Cornell said.
Target won’t necessarily continue to introduce new brands at same pace beyond 2018, but “we see significant opportunity to add to our portfolio this year,” Cornell said.
Meanwhile, Target will open 60 small format (49,000 sq. ft. and smaller) stores, aiming to have 100 in place by late 2019, and plans to remodel 300 locations this year, up from 110 last year with goal of having revamped 1,000 by 2020, Cornell said.
Target had 1,888 stores as of Feb. 3, including 1,500 in larger formats (50,000-169,999 sq. ft.).
Target’s net profit in Q4 ended Feb. 3 rose 34.7% to $1.1 billion as revenue jumped 10% to $22.8 billion on a 3.6% gain in same-store sales. Target’s ecommerce business posted a 29% increase in same-store sales and accounted for 8.2% of Q4 revenue, up from 6.8% a year earlier.
Target, Cathy Smith, Chief Financial Officer, 612-304-6073