The target faces pressure from activist investors

Activist investor Toms Capital Investment Management (TCIM) has made a major investment in Target, the Financial Times reported on Friday, increasing pressure on the beleaguered retailer after years of underperforming rivals.

The size of the stake was not disclosed and the report did not specify what claims the New York-based company might present.

Shares of Target rose 2.6% on the news. Its stock has lost more than 28% of its value this year after the Minneapolis-based chain posted three straight quarters of declining comparable sales. In August, the retailer appointed veteran executive Michael Fiddelke to reinvigorate growth as the business faces pressure from strained household budgets and tariff uncertainty.

“We maintain regular dialogue with the investment community. Target’s top priority is a return to growth,” Target said in a statement to Reuters on Friday.

Hedge fund TCIM is a relatively unknown entity in the retail industry, but recently gained attention after taking a stake in Tylenol maker Kenvue before its sale to Kimberly-Clark last month for $40 billion. He has also pushed for changes at Pringles maker Kellanova and US Steel.

For Fiddelke, the activist stake represents his first major test before taking on the CEO role in February. His appointment has already raised concerns among investors, as he will continue to report to current CEO Brian Cornell, who is set to become executive chairman of the board.

That structure has drawn criticism, with the nonprofit shareholder activist group The Accountability Board filing a shareholder proposal in October urging Target to appoint an independent chairman.

“For us, this (TCIM’s stake) signals that investors are hungry for change and means that our proposal to shareholders probably has an even better chance of passing,” said Matt Prescott, chairman of Accountability Board, which owns Target shares.

To ease investor concerns and revive its business, Target unveiled plans to spend an additional $1 billion in 2026 on new store openings and renovations. The company, which operates nearly 2,000 stores, also cut 1,800 corporate roles as part of a wider restructuring.

TCIM’s move won’t be Target’s first encounter with an activist investor. In 2009, the company fought a high-profile proxy battle with Pershing Square’s Bill Ackman, who sought board seats to push a real estate spin-off amid declining profits.