Activist Hedge Fund Invests in Struggling Retailer, Target Corp.
Target Corp. is now under increased pressure from the activist hedge fund, Toms Capital Investment Management (TCIM). According to a report by the Financial Times on December 27, 2024, TCIM has made a significant investment in the struggling retailer. This news led to a 2.6% rise in Target’s shares, although the exact size of the stake remains undisclosed.
The investment by TCIM comes at a time when Target is wrestling with challenging market conditions. The Minneapolis-based retailer has reported falling comparable sales for three consecutive quarters, and its stock has depreciated by more than 28% this year. In the most recent quarter, Target’s net sales saw a decline of 1.5%, amounting to $25.3 billion, with comparable store sales dropping nearly 4%. The net earnings also slumped by 19.3%, down to $689 million.
TCIM, although a relatively unknown entity in the retail industry, recently came into the limelight after acquiring a stake in Kenvue prior to its $48.7 billion sale to Kimberly-Clark last month. The firm has also advocated for changes at Kellanova and US Steel. For Target’s incoming CEO, Michael Fiddelke, who is set to assume the role in February, the activist stake poses his first significant challenge as he strives to rejuvenate growth at the company.
Source: https://www.aol.com/articles/embattled-target-feeling-heat-hedge-165142817.html