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Motorola chair to present at Morgan Stanley conference

BY CSA STAFF

LIBERTYVILLE, Ill.— Motorola Mobility Holdings announced that its chairman and CEO, Dr. Sanjay Jha, is scheduled to present at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, California.

The live audio webcast will be available at investors.motorola.com. An archived replay will be available on the website approximately three hours after the live event.

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All about the outlook

BY CSA STAFF

The retail world takes center stage this week as financial markets are poised to dissect a slew of earnings reports from major retailers who will be sharing details on the profitability of holiday sales, perspective on the state of the economic recovery and the outlook for consumer spending during the remainder of 2011.

Target is among the companies scheduled to report, but before its numbers are released on Thursday plenty of competitors will have shed light on their operations. Companies such as Walmart, Macy’s, Home Depot, Office Depot and Barnes & Noble are scheduled to release earnings on Tuesday followed on Wednesday by Lowes, TJX, Limited, Dollar Tree and Chicos. On Thursday, in addition to Target, other companies reporting results include Gap, Safeway, Kohl’s and Sear’s Holdings. JCPenney is scheduled to report on Friday.

As tends to be the case with earnings reports, the actual results companies report are of less significance to the markets than the guidance provided. It happens all the time where a company reports blowout numbers and upon expressing a modest degree of reservation about future earnings potential sees its share price get pummeled.

Whether such a fate awaits Target remains to be seen, but the company has a large number of initiatives underway that are going to draw keen interest from analysts regardless of where sales and profit forecasts fall relative to consensus numbers.

For example, there are sure to be questions about the expenses associated with the PFresh remodeling program, whether there have been further reductions in the time required to complete a remodel and the pace of remodel activity for the coming year. The impact this program is having on gross margins, customer traffic and average transaction size are also being watch closely.

Also of interest will be the company’s expansion into Canada now that the acquisition of Zellers stores has been announced and an update on the small format initiative now that it has been disclosed that the CityTarget name will adorn the stores.

As always, analysts will also be interested in Target’s perspective on the competitive environment from a pricing standpoint and what the company is seeing in terms of product cost inflation and how consumers may be reacting to efforts to pass through price increases.

And you can’t forget the 5% REDcard rewards program launched last October. Is this initiative producing the desired business results, and what kind of metrics will the company release to validate its claims?

And lastly, the fourth quarter earnings announcement tends to be a forum for the company to provide an update on some near term merchandising initiatives that will hit stores during the first quarter.

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Small format gets a new name

BY CSA STAFF

So Target plans to call its new small format stores CityTarget. It was a little over a year ago the company first disclosed plans to open stores ranging from 60,000-sq.-ft. to 100,000-sq.-ft. in urban locations, but the new name was revealed only last week in connection with the announcement of a 2012 opening of a small store in downtown Chicago.

Not quite sure what to make of the new name, but the folks in Target’s marketing department know a thing or two about branding so the inclination is to give the company the benefit of the doubt that the choice is a wise one. Surely, rigorous consumer research was conducted and alternatives were tested with various shoppers segments before CityTarget was established as the optimal name for a potential new growth vehicle.

Nevertheless, inquiring minds want to know why a separate name is required at all.

Perhaps the wisdom of Target’s ways will be revealed once the first of these stores open and shoppers are able to see for themselves just how differentiated the shopping experience is between a CityTarget, a Target and a SuperTarget.

For now, what the company is saying about the store is that “CityTarget will offer guests the convenience of one-stop shopping with affordable fresh food, apartment essentials, on-trend fashions and exclusive designer collections.”

That’s not a lot to go on, but a year ago when the urban strategy was disclosed at an analysts’ meeting in Philadelphia. Target chairman, president and CEO Gregg Steinhafel indicated the product assortments in these smaller stores would be comprised of the highest velocity categories blended with products tailored to the unique need of urban customers.

If the product mix and guest experience is substantially differentiated from other Target and SuperTarget stores then a unique identity is warranted. If not, then it is simply confusing and customers will wonder why the store in downtown Chicago is called CityTarget while a unit less than a mile away in the shadow of downtown is known simply as Target.

It has already become challenging to tell the difference between SuperTarget and Target stores now that the latter have received fresh foods and expanded consumables offerings courtesy of the PFresh remodeling program. There is a size difference between the two formats, but thanks to PFresh conventional 125,000-sq.-ft. Target discount stores now seem pretty super. It is conceivable a similar situation could exist with CityTarget since the company has indicated some of the units will be as large as 100,000-sq.-ft. and offer the convenience of one stop shopping, which seems to be a rather liberal definition of an urban small format.

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