Americans love Target. That's bad news for Macy's and JCPenney

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Sales in Target stores opened at least a year ago increased 3.4% in the summer quarter and earnings rose, Target said. Target (TGT) beat the Wall Street forecast for the recent quarter and increase its earnings guidance for the rest of the year.
The results follow Target's best year for more than a decade. Investors increased their target stock by around 18% in early trading on Wednesday. Shares reach a record.

Target said its clothing sales had increased 5% in the last quarter and was gaining market share in the category. These are clear signs that Target's growth is at the expense of clothing retailers. Target has launched new clothing brands for men, women and children in recent years and has put more emphasis on them in stores.

"There are obvious winners and unfortunately losers in the retail business today," said Target's general manager, Cornland, Brian Cornell on Wednesday. "We obviously share in other retailers who have closed stores or who have not been able to invest in the needs of the consumer today."

Wall Street has punished retailers who report a weak business.

Macy & # 39; s (M) Last week, sales in stores began at least a year but profits dropped 48% in their last quarter. Macy's lowered his expectations for the rest of the year, resulting in a decline in his stock. JCPenney (JCP)The company, which trades at less than $ 1 a share, announced last week that its sales had dropped 9% in its last quarter, continuing its steady decline.
same Kohl (KSS), favorite of retail investors because of a partnership with Amazon and a creative approach, recorded a crisis in the last quarter. Sales were down 2.9% in stores that have been open for at least a year. the gap (GPS) and The Brands (KG), Victoria's parent's Secret, have also been hit hard. Both companies report profits this week.
Target, Walmart and Discount clothing chains such as TJMaxx are gaining market share from these retailers. Walmart and TJX (TJX), the parent company of TJMaxx and Marshalls, has announced a chain of sales growth in recent years.

Target and Walmart operate stores away from shopping malls, an advantage due to slower pedestrian traffic in the nation's shopping centers. Macy's and Penney, however, have a strong exposure to shopping malls. Neither channel has invested as much money as Walmart or Target to renovate its stores.

Shopping malls fill their empty spaces with doctor's offices.

Walmart represents nearly seven times the size of Target in terms of sales, but both chains are able to use their size and scale in the market to lower prices for various products. Department stores such as Macy's, Kohl's and JCPenney are much smaller and mainly sell clothes, where a multitude of options have arisen online and from specialist brands.

Retail bankruptcies such as Sears and Toys "R" Us and a strong consumer economy also benefited large chains.

"It's still a very solid and healthy consumer environment," Cornell said. "We are well placed to take advantage of this."

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