Target struggles after end of DEI program and boycott, with foot traffic down 8 weeks in a row.

[u/Healthy_Block3036]

https://fortune.com/2025/04/01/target-dei-demise-boycott-foot-traffic-down-eighth-consecutive-week/?itm_source=parsely-api

[u/ka-ka-ka-katie1123]

The true value in the company is their real estate holdings. Target owns a metric shitton of property.

[u/Mandena → u/ka-ka-ka-katie1123]

Real estate holdings sure helped all those companies in 2008 lmao.

[u/Actual__Wizard → u/ka-ka-ka-katie1123]

Value that's tanking sharply because those imported goods stores just lost business viability?

Why would I spend money to travel to a store when Amazon ships it to my door?

The entire business model of Target is totally antiquated...

[u/ka-ka-ka-katie1123 → u/Actual__Wizard]

The value of the land isn’t tanking because imported goods stores just lost business viability. That’s the value of the retail business and possibly the value of the structures on the land. Not telling anyone to invest in Target (I wouldn’t), just that the main reason it’s been recommended as an investment in recent years is because they own so much land, and not because the store does well.

[u/Actual__Wizard → u/ka-ka-ka-katie1123]

The value of the land isn’t tanking because imported goods stores just lost business viability.

The value of the land is what a buyer is willing to pay. If the viability of the business is going down, then the land is also going down in value.

[u/MechanicalSideburns → u/Actual__Wizard]

What? That’s not true at all. The store may be losing income, but 5 acres in a prime spot is always 5 acres.

[u/eiva-01 → u/MechanicalSideburns]

Not every 5 acres is priced the same. You need people who actually want to buy it.

[u/MechanicalSideburns → u/eiva-01]

Um duh. Location, location, location.

Do you think Target is in the habit of buying land that is in worthless places that nobody wants? Or would they buy land in a strategic spots to get the most customers from the surrounding neighborhoods? Every Target I know is in a pretty juicy spot. Not to mention that new neighborhoods have often sprouted up around their development.

Say what you want about their cheap imported products and bankrupting small businesses…those fuckers understand real estate.

[u/eiva-01 → u/MechanicalSideburns]

The key point you're glossing over is that if retail businesses become unprofitable then that will have the effect of suppressing the value of retail real estate. Real estate is not immune from the effects of a recession.

[u/MechanicalSideburns → u/eiva-01]

Well, of course no asset class is recession proof.

But it doesn’t matter. Target isn’t like us, where our take-home pay drops and we’ve got to sell off that 2nd car. They wouldn’t liquidate real estate, they’d leverage against it to generate cash and retool underperforming parts of the business model.

Shit, I’d bet that even if one of their stores closes because of vast underperformance, they probably still don’t even sell the land. They’d do like a 100 year lease to Buzzuto or whoever, who would then put up a mixed-use apartment/retail complex.

I guess my whole point was that they are in a vastly more advantageous position than most chains to weather a recesssion.

[u/eiva-01 → u/MechanicalSideburns]

You need to have enough liquidity to pay your debts while you weather the recession. I'm not sure Target is well-positioned for that if their stores are hit harder than the industry average because that will eat into their liquidity pool.