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Why Target’s Cheap-Chic Glamour Is Fading

The discount retailer confronts slower growth and image problems

On a conference call earlier this year while discussing Target’s 2011 same-store sales forecast, Chief Financial Officer Douglas Scovanner noted that his company’s biggest rival, Wal-Mart, had been taking heat from Wall Street for its weak retailing performance. The largest player in the marketplace had yet another quarter of negative same-store sales, he said: “People are picking on my big brother.”

For years, Target has benefited from such comparisons. Target’s merchandise was trendier, its commercials hipper, its employees happier—or so the meme went. Of late, however, Target has found it increasingly difficult to tell that story.