Target CEO details initiatives at annual meeting; 230 remodels and 20 to 25 new stores on tap
New York — Canned peaches, criminal records and political contributions were among the shareholder concerns expressed at Target’s annual meeting on Wednesday afternoon.
The meeting, held inside a soon to open CityTarget store in downtown Chicago, lasted less that an hour and featured a brief recap of the company’s 2011 performance from chairman, CEO and president Gregg Steinhafel. He touched on previously disclosed details regarding some of the company’s key strategic initiatives such as the 5% REDcard Rewards program and the PFresh store remodeling program. Both are key drivers of Target’s improved financial performance and enabled the company to produce a first quarter same store sales increase that was the strongest in six years.
Last year, Target set a record and remodeled 400 stores to its PFresh format which features expanded food and consumables. The program, now in more than 1,000 of the company’s former general merchandise stores, has begun to decelerate with 230 remodels planned for this year. New store growth is ticking up to between 20 and 25 stores.
The REDcard program, which offers a 5% discount to those who pay with a Target debit or credit products, doubled its penetration rate last year to account for 9.3% of purchases. Steinhafel thinks that figure could go higher as the penetration rate in Kansas City, where the program was first tested, is now at 16%. Another key highlight mentioned by Steinhafel is that Target now has 10 proprietary brands that generate annual sales in excess of $1 billion.
He also alluded to the growth potential of the CityTarget format, noting that the Chicago location where the meeting was held with be one of three (Los Angles and Seattle are the others) locations to open next month. They will be followed by October openings in San Francisco and a second Los Angeles location. A third Los Angeles location will open in 2013 along with a location in Portland.
Despite the improvements highlighted by Steinhafel, when he opened the floor for questions shareholders took the meeting in a direction unrelated to the company’s growth prospects or ability to execute key initiatives.
Instead, what executives got were questions about political contribution policies, some of which related to a now two year old issue that arose after Target gave money to a candidate opposed by the gay and lesbian community. Another speaker took exception to Target selling gay and lesbian pride T-shirts on its Website and felt the company had been pressured into doing so. Another speaker questioned the need for Target to be involved in the Retail Industry Leaders Association trade group
Steinhafel defended the company’s involvement, noting that while there is a risking related to involvement in politics, legislative and regulatory matters, the bigger risk is not participating.
“We focus our energies around two things; swipe fee reform and efairness,” Steinhafel said. “It is important for us to have a seat at the table because we want a level playing field.”
Another shareholder took exception to Target’s efforts in the area of sustainability and seemed concerned that the company’s environmental efforts were resulting in higher prices. He encouraged the company to produce a report showing how much its efforts were adding to the cost of goods. Another shareholder appearing on behalf of a person who was denied unemployment wanted Target to reform its hiring practices.
And then there was a gentleman from California concerned that Target’s canned peaches are sourced from China and cost more than those sold at Walmart that are sourced from California.
Kathee Tesjia, Target’s executive VP merchandising, vowed to look into the matter and apologized because the company is relatively new to the food business but looking to beef up its local sourcing efforts. Steinhafel took it a step further and said: “there is no excuse for us to ever be higher priced that our competitors on a similar item.”
The meeting ended with a longtime shareholder lamenting that no one ever talks about all the good stuff Target does.
“The board is doing a fantastic job and the stock is way up. Thank you,” he said.
Santa Monica Place awarded LEED Gold
Santa Monica, Calif. — Santa Monica Place, the open-air shopping center in downtown Santa Monica, Calif., has been awarded LEED (Leadership in Energy and Environmental Design) Gold certification from the U.S. Green Building Council.
“We have long said that the most sustainable building is one that already exists, and our decision to reuse and redesign the existing structure into what you see today – a three-level, open-air property with views, fresh air and plenty of sunshine – was an essential step toward LEED certification," said Art Coppola, chairman and CEO Macerich
By recycling the existing structure into the current Santa Monica Place, Macerich turned a climatized indoor mall into an outdoor center, reducing/offsetting 3,060,024 million kWhs energy, and during construction, diverted more than 90% of construction, totaling 68,519,409 lbs., from landfills. In terms of the property’s ongoing operations, Macerich makes use of “14 Points of Presence” (POPs) throughout the property to integrate operational disciplines, such as energy management, metering/submetering, UMS, CCTV, access control, Wi-Fi, voice over IP, digital signage, concierge, valet and parking management services into a single, robust infrastructure. The center also incorporates water-efficient landscaping, a green roof element and many other sustainable property features.
Santa Monica Place’s LEED Gold certification comes in the Core and Shell category, which reflects the role of a shopping center developer with respect to individual tenants and their own store build-outs.
Santa Monica Place features approximately 550,000 sq. ft. on three levels.
Cooper Lighting: Call for entries in lighting competition
Peachtree City, Ga. — Cooper Lighting has announced a call for entries for its 36th Annual Source Awards national lighting design competition. The competition, which focuses on furthering the understanding, knowledge and function of lighting as a primary element in design, is open to all lighting designers, architects, engineers, professional designers and consultants who use Cooper Lighting fixtures in an interior or exterior design project. This year’s competition will once again seek a creative use of fixtures providing energy-efficient design solutions in addition to standard projects.
The competition requires the primary and predominant use of any or all of the Cooper Lighting brands, which include Halo, Halo Commercial, Metalux, Portfolio, Neo-Ray, Corelite, Sure-Lites, Lumark, McGraw-Edison, Fail-Safe, Lumière, Shaper, IRiS, Ametrix, RSA, io, Invue, MWS and Streetworks.
Projects will be judged on the blending of aesthetics, creative achievement, technical performance and to the degree which the lighting met project constraints and design concept goals. There will be no minimum or maximum number of awards given, as each project will be judged on its own merit. Award categories will include: Winner, Honorable Mention and Award of Recognition.
Judging for the 36th Annual Source Awards competition will take place in February 2013 by a professional, independent panel of lighting and design professionals, as well as a representative of the Source, Cooper Lighting’s lighting education center. Winners will be announced in April 2013.
To download more information, go to Cooperindustries.com/content/public/en/lighting/resources/education/source/source_awards.html.