CNBC's "Power Lunch": $TGT's move to Canada

YAY. Nothing makes me more happy than reporting on good news and $TGT's announcement that the retailer is officially moving into Canada is exciting.  $TGT agreed to pay Zellers Inc. C$1.825B in two equal payments of C$912.5M to acquire the leasehold interests in up to 220 sites currently operated by Zellers Inc. Target expects to open 100 to 150 stores throughout Canada in 2013 and 2014. What's more $TGT also announced it intends to sell their credit card recievables portfolio which totaled $6.7 billion as of October 30th, 2010. The move is likely to finance CAPEX for the new stores in Canada which is said to exceed $1 billion.

My take:

While expansion is always a good sign of a retailer doing well, we can’t ignore their online business which wavered/lost market share to $AMZN during the holidays. With shopping becoming more mobile/online, how the retailer handles this will be key.  Grocery business is also taking a hit with rising commodity and food prices, but having a variety category mix like $TGT is doing with the one-stop-shop is a good model for them.

Retail Sector: On Road to Recovery?

Retail Sector: On Road to Recovery?

YES we are in the midst of Mercedes Benz Fashion Week FW10 prep BUT that doesn't mean the retail sector or the economy comes to a standstill. On Thursday I was on CNBC to talk about same store sales and whether or not the positive upswing was an indication the economy is recovering. My verdict: definitely not. January is typically the easiest month when it comes to comps and if you are doing a year over year comparison, most retailers reported horrible numbers this time last year therefore any positive numbers being reported will of course seem amazing. Also, retailers notoriously targeted the bottom line over the past months which means stores were closed, jobs were cut and inventories were slashed. This contributed to the incredible turnaround companies like Abercrombie & Fitch (ANF) and Saks Fifth Ave (SAKS) experienced. Consumer spending has a direct correlation to jobless claims and the unemployment rate. Once both of those numbers come down significantly, we will see substantial numbers for these retailers. To check out the video click here.