Jamba Turned to Target at the Worst Possible Time

Source: Jamba. 

The silver lining in Jamba's (NASDAQ: JMBA  ) move three months ago to hose down its performance outlook was that it was installing JambaGo kiosks at 1,000 Target (NYSE: TGT  ) cafe locations. 

The smoothie-blending machines showed up in time for the cheap-chic retailer's holiday shopping season, but so did the hackers that have scared away shoppers. 

Target's been the biggest retail loser of the season since revealing that 40 million credit and debit card transactions may have been compromised by hackers during the first three weeks of the critical holiday shopping season. 

Target wasn't able to bounce back after that, and even offering 10% off to customers during the final weekend before Christmas wasn't enough to turn things around. The struggling discounter revealed on Friday that the problem was even worse than originally reported, and its forensic investigation shows that up to 70 million individuals had their names, mailing addresses, phone numbers, or email addresses stolen in the process.

There's a credibility crisis at Target. The once-trendy chain that was expecting flat comps during the holiday quarter is now eyeing a 2.5% decline for the period fueled by a 2% to 6% dive since the story broke.

It's against this backdrop of defecting shoppers that Jamba Juice's JambaGo machines are hoping to refresh customers with their icy fruit beverages. It should now be perfectly understandable if the Target cafe installations get off to a rough start. If folks can't trust their plastic at Target, that's going to slow down the sales at its food concessions area. 

It's important not to place too much weight on the self-serve kiosks.  A typical JambaGo generates just five figures in annual revenue. It's not at the needle-moving level of a company-owned store. However, JambaGo is a great way for the company to expand brand awareness. On that front, association with Target probably isn't the best thing at the moment, but that will pass. Target will make its platform more secure. It will win back shopper confidence. It doesn't really have much of a choice. Jamba's partner may seem like a liability at this embarrassing moment, but it's better to have those JambaGo machines ready now for the inevitable turnaround than not to have them there at all.

One of these six picks is also making smoothies
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen 6 picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

 


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2792833, ~/Articles/ArticleHandler.aspx, 10/21/2014 8:32:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement