Target Corp. keeps shaking up its marketing.
The mass retailer on Friday, only six days into the New Year, said that it has split with its advertising agency of six years, Wieden + Kennedy. Target parted ways with another of its longtime ad agencies, Peterson Milla Hooks, late last year.
This story first appeared in the January 9, 2012 issue of WWD. Subscribe Today.
There’s no shortage of changes at Target. Michael Francis, its top marketing executive, in October left to join J.C. Penney Co. Inc. Industry experts said Francis’ departure might have had something to do with the Target’s decision to jettison Wieden.
“We’re not going to discuss the reasons that led to this decision,” a Target spokeswoman told WWD. “We’re constantly looking to evolve the brand and we’re looking to take a fresh approach in 2012.
“We have always worked with a number of agencies and continue to work with a number of agencies,” she said, adding that Target will use its in-house marketing team coupled with support “from a multitude of agencies.”
Target’s decision to jettison Wieden is surprising because the retailer in 2009 named Wieden, which had been on its roster for years, as its lead agency. Francis, who made the decision, said at the time that Target needed a partner to help align its messaging and approach across channels.
Francis, in his new role at Penney’s, recently split with that retailer’s agency of record, Saatchi & Saatchi.
All the changes in its marketing come amid disappointing sales performances from Target in November and December. The retailer reported a 1.6 percent increase in same-store sales last month, compared to a projected consensus of 3.3 percent. December’s performance followed a poor November, leading Target to lower its fourth-quarter earnings per share outlook to $1.35 to $1.43, compared with prior guidance of $1.43 to $1.53.
Matt Nemer, a retail analyst at Wells Fargo, said, “The weakest performing categories for Target this holiday were areas where Amazon has considerable strength and expertise, [including] consumer electronics, movies, music and books.”
This lent credence to rumors that Target may be opening in-store Apple shops, initially at 25 stores. “I have no comment on that today,” an Apple Inc. spokeswoman said Friday.
“One of the issues Apple is facing is that its stores are packed,” said Tavis McCourt, an analyst at Morgan Keegan who follows Apple. “It’s very difficult for Apple to find appropriate [retail] space.”
Retail analyst Walter Loeb said, “Apple will go into more distribution to become as widely distributed as possible. It would be a great move for both companies.”
Phil Schlein, a partner in U.S. Venture Partners and former chief executive officer of Macy’s California, was a member of Apple’s board for eight years. “It’s plausible because Apple has such acceptance,” he said. “Their stores are so distinctive and are such a great draw.”