Victorville Still Sorting Out Target Closing

The announcement that the store on Palmdale Road will be shut down early next year caught some in the High Desert by surprise, even though the location, which was close to 30 years old, had been underperforming for several years.

At least one person in the High Desert wasn’t surprised when Target announced that it was closing one of its Victorville stores.

Don Brown, president of Lee & Associates’ Victorville office, recalls visiting the store at 15321 Palmdale Road and noticing a slow but steady decline in customer traffic, beginning about two years ago.

“My office is downtown so I would go over there a lot to pick up a few things, a lot of times on my lunch hour,” said Brown, a veteran commercial real estate broker in the Victor Valley. “I could see the number of customers dropping. After awhile, the store wasn’t very active.”

Brown recalls mid-afternoon visits to the store at Palmdale Road and Park Avenue when there were only two cashiers working.

“For a Target, that’s crazy,” Brown said.

So when officials with the Minneapolis-based retail chain released a list of 13 stores they were closing across the country as of Jan. 30, and the Palmdale Road store was on the list, Brown greeted the news with a shrug.

“There just wasn’t much going on there,” he said.

Still, the announcement caught some in the Victorville business community, and the High Desert in general, off guard. Target is a profitable operation that doesn’t close stores often. The Victorville store was the only California location on the list.

“I was surprised,” said Michele Spears, president and chief executive officer of the Victor Valley Chamber of Commerce. “They have several stores in the High Desert and they all do well. I hear they’re looking at another location in Victorville. I hope that’s true.”

The Palmdale Road store, which opened in 1987, employed 107 people. Most of those workers will be offered jobs at other Target stores, company officials said.

The closings were based on each of the store’s long-term financial performance and were decided upon after much consideration, Target officials said.

That move leaves the shopping center, which includes a Starbucks, without an anchor tenant. It also leaves officials in the High Desert wondering why the 28-year-old store how much of an impact the closing might have on the city’s economy.

One possible factor was Walmart, which operates two of its superstores in Victorville, one of which opened about two years ago at Palmdale Road and Highway 395. That opening coincided with the soon-to-be-shuttered Target’s drop in traffic, Brown said.

“Walmart was in a much better location and it was too convenient,” Brown said. “You don’t have to get on the freeway to get there, and that’s a big plus because people avoid the freeway if they can. But just going up against Walmart is a huge challenge for anyone, regardless of the circumstances.”

The Walmart superstores are also about one and a half times as large as a traditional Walmart store, giving them an advantage over a regular Target in a weak location, said Joe Brady, president of The Bradco Cos. in Victorville, one of the largest commercial real estate brokerages in the High Desert.

“It was an old store and I’m sure that was factor,” said Brady, who said the Palmdale Road Target was a Gemco – a general merchandise chain similar to Target and Walmart that went out of business in 1986 – before Target took it over.

“They were also in a challenging location that was always going to be a problem,” Brady continued. “If you want to shop at a regular Target, it’s probably easier to go to Hesperia or Apple Valley, where there are two in both cities.”

At its peak, the Palmdale Road Target probably generated $30 million to $40 million in annual sales, meaning it would have generated $300,000 to $400,000 a year in sales tax revenue for Victorville, Brady speculated.

“If that’s correct, it would be about $350 a square foot, which is a good number,” Brady said. “But the store wasn’t doing that well at the end, so I wasn’t surprised when they said they were going to close it. When you’re trying to compete with two Super Walmarts, that can happen.”

Victorville officials did not return calls seeking comment for this story.

For now, the biggest concern might be making sure that the store’s employees don’t stay unemployed for long, Brady said.

“We already have high unemployment in this region, so getting those people back to work is a major concern,” Brady said.

Target, which operates more than 1,800 stores in the United States, has had more than competition from Walmart to deal with recently.

In March, a judge in Minnesota approved a settlement that requires Target to pay $10 million to settle a class-action lawsuit. That suit stemmed from a massive data failure in Target’s computer system two years ago that exposed details of up to 40 million debit and credit accounts.

That incident put a dent into Target’s holiday sales two years ago and brought the company an avalanche of bad publicity.

Target also undertook a major expansion into Canada starting in March 2013, at one time operating 133 stores there. Two years later, all of those locations were closed.

That ill-fated venture was blamed on several factors, including bad store footprints, prices that were too high, and not enough inventory. Whatever there reason, Target’s retreat from the Canadian market reportedly cost it about $2 billion.

“I have to think what happened in Canada had something to do with closing the stores in the United States,” Brown said.

While Victorville still has more than its share of retail, the city probably can’t afford to let the sales tax revenue the Palmdale Road Target generated – whatever the exact figure – slip away, Brady said.

“Competition is always good, but you never want to see a store close no matter what the circumstances,” Brady said.