Bill Ackman's patience with Target may be running out

Posted Apr 4th 2009 2:40PM by Brian White
Filed under: Industry, Target Corp. (TGT)

Target Corp. (NYSE: TGT) has had its hands full in the past few quarters. Larger competitor Wal-Mart Stores Inc. (NYSE: WMT) has been taking all the glory, growing sales every quarter while most other retailers shrink. While Target held all the media's attention during 2007 and much of 2008 -- with cleaner stores, hipper advertising, and a true alternative to the bargain basement -- it's struggled during the recession.

Target's status-quo attitude may not be enough to keep Bill Ackman away, though. The billionaire controls 8% of the retailer's stock and, until now, has not indicated that he's unhappy about Target's current management team.

Indeed, Ackman has been extremely complimentary in recent times of Target's team. But then again, Target's entire board of directors and all of the retailer's management only own 0.31% of Target's shares to Ackman's 8%. So, with TGT shares languishing around $35 from their recent peak of nearly $60 in 2007, Ackman may not keep quiet for much longer.

If Target's management team is content to wait for the economic turnaround and see how sales and growth rebound, so be it. That's a huge missed opportunity to try and return to "the ways things were" -- which may not be good enough for Ackman's money sitting in Target's shares. Still, the fact that Wal-Mart has capitalized on the downturn and Target hasn't says something. That something is this: Target maybe needs a shakeup in the upper ranks and even in the board.

Tags: Bill Ackman, inthenews, retail sales, Target Corp., TGT, Walmart, WMT

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Reader Comments (Page 1 of 1)

4-04-2009 @ 3:23PM

RICH BRULATO said...

Target is a strong retailer!!

4-05-2009 @ 7:44AM

Jim Mallory said...

Whatever happened to "You dance with who brought you?" Target's customer is not necessarily Wal*Mart's customer and there is no guarantee that Target would take any customers from Wal*Mart and there is also no guarantee that Target wouldn't lose the customers they already have if they change up the product mix too radically.