Pressure is mounting on US retailer Target after activist hedge fund Toms Capital Investment Management (TCIM) built a stake in the company, as the retailer grapples with an extended period of weak sales and a sharply lower share price, according to a report by the Financial Times.
Target’s shares have lost close to a third of their value this year and remain more than 60% below pandemic-era highs, after the company reported its 12th consecutive quarter of flat or declining sales in November. The retailer has underperformed both the broader equity market and key peers in the US retail sector.
TCIM, a US-based hedge fund founded in 2017 by former GLG Partners professionals, is understood to have taken a “significant” position in Target, according to people familiar with the matter. The size of the stake has not been disclosed. The firm has a track record of activist campaigns, having recently built positions in companies including Kellanova, US Steel and Kenvue, where it pushed for strategic changes ahead of a $48.7bn sale to Kimberly-Clark last month.
News of TCIM’s involvement lifted Target shares by as much as 3.7% on Friday, valuing the retailer at approximately $44.3bn. TCIM declined to comment.
Target said it maintains regular dialogue with its shareholder base and reiterated that management remains focused on restoring growth. The company’s strategy centres on improving merchandising execution, enhancing the in-store and digital customer experience, and leveraging technology to drive efficiency and engagement.
The activist pressure comes at a pivotal moment for Target, with long-serving chief executive Brian Cornell set to step down in February after more than a decade in the role. He will be succeeded by chief operating officer Michael Fiddelke, who has outlined plans for a major operational reset. Target expects to invest $5bn in 2026—around $1bn more than this year—towards store upgrades, product refreshes and digital improvements.
Despite its challenges, analysts continue to highlight Target’s structural advantages, including a nationwide footprint of nearly 2,000 stores within close proximity to 75% of the US population, and its ownership of the majority of its real estate. Some observers have suggested this property portfolio could be monetised, following models adopted by other US retailers.
However, Target’s heavier exposure to discretionary categories such as home décor has left it more vulnerable to cautious consumer spending, particularly as inflation and tariffs weigh on household budgets. Around half of its merchandise is sourced internationally, with China a key supplier, making the group sensitive to recent US trade measures.
