Target axes Arkansas DC
Target Corp., the nation’s third-largest retailer, said Wednesday it plans to close a distribution center in Little Rock, Ark., and take other cost-cutting measures in response to worsening sales figures.
The Little Rock DC employs 500 people who will be offered positions at other Target DCs, or will receive a severance package that includes 12 months of Target health care benefits.
Target operates 26 regional DCs, four import warehouses and one Target.com DC.
The news follows Home Depot’s announcement Monday that it is closing its specialty store segment along with several small distribution operations and laying off 7,000 workers.
Minneapolis-based Target said it is also eliminating 600 headquarters employees and won’t fill 400 open positions.
In recent weeks, the company has suspended salary increases for senior management, suspended share repurchase activity, tightened credit card underwriting and granting, implemented store productivity initiatives, reduced planned new store openings, and cut outside contractor support, travel and entertainment to bring down expenses.
“We are clearly operating in an unprecedented economic environment that requires us to make some extremely difficult decisions to ensure Target remains competitive over the long-term,” said Gregg Steinhafel, chief executive officer, in a statement.
Target said the downsizing effort would cost about 3 cents per diluted share, or $23 million, but that it expects annual savings to exceed the fourth quarter charge. ' Eric Kulisch
