Target Reduces Capital Spending by $1B, Cuts Back on New Store Openings
- Nov 18, 2008
Just when it seems the latest financial news has hit rock bottom and things surely have to be looking up, another round of bad news sends the market spiraling downward again. News of trendy bargain retailer, Target, stemming new store openings won’t make the commercial property world happy either. Forbes.com reported that Target announced Monday that it would temporarily halt its share repurchase program and reduce its capital spending by $1 billion – including cutting new locations – to conserve capital. The company’s third-quarter earnings fell 23.6 percent after hearing the news, Forbes reported. Citigroup’s CEO said Monday that around 52,000 jobs would be eliminated by the end of 2009 in addition to the 23,000 jobs already cut this year by the firm. Reuters reported that shares in China Construction Bank tumbled 7 percent on Tuesday as investors feared Bank of America was preparing to sell some of its stake in the lender to shore up its books as credit losses mount in the United States. Bank of America said on Monday it planned to almost double its stake in China’s third-largest lender this month to 19.1 percent from 10.75 percent, in a deal worth about $7 billion, exercising an option to buy the shares at a steep discount to the current market price, the Reuters report stated. The nation’s auto industry continues to hurt, too, as President George W. Bush and GOP lawmakers proposed diverting $25 billion in loans approved by Congress in September — designed to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles — to cover the firms’ immediate financial woes, according to the Associated Press as the financial situation for General Motors Corp., Ford Motor Co. and Chrysler L.L.C. grows more precarious. GM has said it could run out of cash by year’s end without government aid. Bloomberg reported that Ford Motor Co. will raise about $540 million selling part of its stake in Japanese affiliate Mazda Motor Corp. The automaker will sell 20 percent of Mazda, reducing its holdings to 13 percent. Hiroshima- based Mazda will buy back up to a 6.9 percent stake for as much as $186 million, it said separately. The remainder of the shares will be bought by unidentified “strategic business partners.” The deal will happen tomorrow, according to Bloomberg .