Target is having an identity crisis.
The nation’s third largest retailer was once high-flying, but now it’s struggling to find its place in the minds of American shoppers.
Once known for its cheap chic fashions, Target faces competition from trendy chains, such as H&M. The discounter also hasn’t been able to ditch the image its prices on staples like milk are higher than rivals like Wal-Mart. And it is battling the fallout from a massive data breach has hurt its reputation.
Meanwhile, Target on Tuesday fired the president of its Canadian operations following some missteps in the country. The ousting comes two weeks after the Minneapolis-based discounter announced it was looking for a new CEO after the abrupt departure of its former CEO.
All of Target’s challenges come as the broader retail industry is dealing with a slow economic recovery that hasn’t benefited all Americans equally and a move by shoppers away from buying in stores and toward shopping online.
As a result, Target reported its first annual profit decline in its latest fiscal year in five years.
“The nature of the retail landscape has changed,” said Brian Yarbrough, a consumer products analyst at Edward Jones. “I don’t think Target has addressed the changes well.”
Target was the first low-price retailer to team with designers to create affordable lines when it forged a partnership with Michael Graves in the late 1990s. But that niche has been copied by traditional stores and foreign imports like H&M. Analysts say Target took its eye off the ball on its trendy offerings when it focused on expanding its food business since the recession.
Target has also tripped up on some of its designer collaborations. During the holiday 2012 season, its collaboration with posh retailer Neiman Marcus turned out to be a dud as the merchandise was criticized for being too expensive, among other things.