REAL ESTATE

Crayola Experience boosts Texas center conversion

BY Al Urbanski

The story of the reinvention of a mall into a multi-use development got more colorful this week.

Crayola Experience announced it will place its fourth U.S. location in The Shops at Willow Bend in Plano, Texas, a Starwood mall that is adding a seven-story office tower, an expanded dining district, and the North Texas Performing Arts Center in a top-to-bottom transformation.

Equinox also announced this week that it will open a 35,000-sq.-ft. fitness center there.

Opening in spring 2018, the 60,000-sq.-ft. Crayola Experience will house a 5,000-sq.-ft. Crayola Store and allow visitors to name and wrap their own Crayon and learn how crayons are made in a live Factory Show.

The 200,000-sq.-ft. office building will accommodate some 800 employee and will be connected to the mall near the food and beverage area.

The mall lost anchors Saks and Lord & Taylor when parent company Hudson’s Bay decided to exit the Texas market. Starwood tore down the Saks building and replaced it with Crate & Barrel and Restoration Hardware.


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ECOMMERCE

Report: Amazon exploring entering pharmacy market

BY Michael Johnsen

Amazon may have its sights set on a new, multi-billion dollar market.

The online giant may be on the cusp of entering the pharmaceutical dispensing business, according to a report by CNBC. The company reportedly has hired a general manager whose role is said to be helping the online retailer explore how to hang a pharmacy shingle.

"I think Amazon would introduce a lot of transparency to what drugs really cost," Stephen Buck, co-founder of GoodRx, told CNBC. The report suggested Amazon.com could grab as much as $50 billion in prescription sales.

CNBC noted that in Japan, Amazon has added drug and cosmetics delivery to its Prime Now options, and its Japanese site now boasts a pharmaceuticals category page. It noted that Amazon’s playbook typically includes testing new offerings outside the U.S.

Amazon had originally backed Drugstore.com in that company's bid to become an online retail pharmacy, the report said. At a time when brick-and-mortar drug store retailers were first wrestling with online offerings, Drugstore.com and Rite Aid entered a partnership enabling Drugstore.com patients to pick up their prescriptions at a Rite Aid.

Walgreens acquired Drugstore.com in 2011 and five years later the business as Walgreens focused on its Walgreens.com URL.

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FINANCE

Target turnaround taking hold

BY Marianne Wilson

Target Corp.’s efforts to turnaround its business appear to be taking hold — at least based on its better-than-expected first quarter performance.

The discounter broke through the gloom that has characterized many other retailers’ first quarter results with earnings and sales that beat the Street and its own expectations. The company also gave a brighter outlook for the full year.

Target's net income rose to $681 million in the quarter ended April 29, from $632 million a year ago. Excluding items in the latest period, Target earned $1.21 a share, easily beating analysts' estimate of 91 cents per share.

Revenue fell 1.1% to $16.02 billion, higher than the $15.62 billion analysts were expecting. Same-store stores fell 1.3%. Analysts had predicted a 3.6% drop. Online same-store sales rose 22%, contributing 0.8 percentage points to overall same-store sales growth.

“Target’s first quarter financial performance was better than our expectations, reflecting strong execution by our team as they delivered for our guests in a very choppy environment,” said Brian Cornell, chairman and CEO of Target. “After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March.”

Target plans to spend $7 billion over the next three years to remodel stores, speed up expansion of small-format stores in urban markets and college campuses, bolster online operations, and lower prices. The retailer also plans to launch 12 new brands over the next two years. The first new brand, a home décor and bedding/bath line called Cloud Island, will roll out later this month, the company said Wednesday.

“We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape,” said Cornell.

“As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”

Neil Saunders, managing director of GlobalData Retail, commented that Target’s foremost issue is the quality of its stores.

“These (the stores) are far too functional, change too infrequently, and offer very little in the way of inspiration,” he said. “Such a position means that Target struggles to pull in customers – something our data shows is getting worse over time, especially among younger millennial consumers.” For more of his comments, click here.

Target said it expects second-quarter earnings of 95 cents to $1.15 a share, compared with an average projection of $1. And it expects earnings above the midpoint of its previous forecast of $3.80 to $4.20 a share.

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