Retail: Sales slump shakes Target
Target “has missed the bull’s-eye badly,” said Paul La Monica in CNN.com. The big-box retailer reported this week that sales in the fourth quarter of 2016 were down 1.5 percent compared with the same period in 2015. And things look set to get worse. The company’s stock tumbled 12 percent after the retailer revealed its profit outlook for 2017 was 25 percent below industry analysts’ expectations. Target isn’t the only company suffering from what CEO Brian Cornell called a “seismic shift” in retail. Nordstrom, Macy’s, and Kohl’s also reported lower sales for the fourth quarter, while J.C. Penney last week announced plans to close up to 140 stores.
“For decades, Target’s formula of offering stylish but affordable merchandise helped set the retailer apart from competitors,” said Khadeeja Safdar in The Wall Street Journal. Now the company seems to be waking up to the fact that “prices matter.” It says it’s prepared to sacrifice up to $1 billion of profit potential by cutting prices and pushing lower-margin online sales. Cornell has also vowed to invest $7 billion over the next three years in revamping its stores and building up its digital business. Unlike its mallbased department store competitors, Cornell said, Target has no plans for mass store closings.
Autos: Takata admits guilt in airbag scandal
Takata will pay $1 billion in penalties for concealing an airbag defect that led to the biggest recall in U.S. auto industry history, said Tom Krisher in the Associated Press. The Japanese auto-parts maker pleaded guilty to fraud in a Detroit federal court this week, admitting that it hid evidence that millions of its airbag inflators could explode upon impact, “hurling lethal shrapnel into drivers and passengers.” The airbags have been linked to 16 deaths, most of them in the U.S.; 42 million vehicles and up to 69 million inflators were recalled over the fault.
Washington: Trump’s Commerce pick confirmed
The Senate confirmed billionaire Wilbur Ross as Commerce secretary this week, said Doug Palmer in Politico.com. The 79-year-old investor, who made his fortune turning around distressed companies in industries like textiles and steel, is expected to play a bigger role in U.S. trade policy than past Commerce secretaries. Ross advised Trump on trade issues throughout the campaign, and has said renegotiating the North American Free Trade Agreement will be “the administration’s first trade priority.” Ross’ nomination passed on a 72-27 vote.
Aerospace: SpaceX plans lunar tourist trip
Elon Musk “wants to send a couple of tourists around the moon and back to Earth,” said Kenneth Chang in The New York Times. The billionaire entrepreneur said this week that two people have approached his rocket company SpaceX about a “weeklong cruise” inside one of the company’s Dragon 2 capsules. Musk didn’t say how much the two anonymous travelers would pay for the trip, which is tentatively booked for late 2018; NASA pays the Russians $80 million a seat to send astronauts to the International Space Station.
Retail: Sexual harassment scandal at jewelry giant
Hundreds of former employees of the parent company of Kay Jewelers and Jared the Galleria of Jewelry have accused the multibillion- dollar firm’s executives of preying on female workers, said Drew Harwell in The Washington Post. Newly unsealed declarations from some 250 men and women who worked at Sterling Jewelers in the late 1990s and 2000s describe how female employees “were routinely groped, demeaned, and urged to sexually cater to their bosses to stay employed.” Sterling disputes the allegations, which are part of a private class-action arbitration case first filed in 2008. An arbitration judge will hear from witnesses “early next year.”