Target rules out UK acquisition
Current focus on US growth
US discount retailer Target has ruled out a UK acquisition for the time being, scotching persistent speculation that it is considering a bid for Sainsbury’s.
Target chief executive Robert Ulrich told US journalists that the company will be using the $4.9bn raised by the sales this year of its Marshall Field’s and Mervyn’s department store chains to improve its US balance sheet, buying back shares and reducing debt.
Ulrich said: “There’s no question that Target will be an international presence at some point in time. At this time, we have no plans. Our goal currently is expanding in the US without any outside intentions.”
Target was linked to a potential approach to Sainsbury’s after it emerged that the Target executives has net their counterparts from the UK supermarket chain during a tour of Europe during the summer. There was also speculation that it might make a move for Matalan, also seen as a bid candidate for Target’s arch-rival Wal-Mart.
The cash from the sale of Mervyn’s to May Department stores saw Target almost double its third quarter profit, up to $537m from $302m a year ago, Excluding discontinued operations and the $203m gain from the Mervyn’s sale, earnings were up to $330m. Total sales increased 11 percent to $10.9bn, with same-store sales up by 4.5 per cent.
Ulrich said: “We are pleased with our strong growth and continued market share gains during the third quarter, particularly in light of last year’s solid sales and earnings performance.
“We remain confident in Target’s strategy and believe that we will continue to delight our guests and deliver superior value to our shareholders throughout the remainder of 2004 and for many years to come.”
