TARGET DELAYS DECISION TO SELL

Hip discounter Target is putting off a decision on whether to sell its $7 billion credit card business, citing “current market conditions” as worries about weakening consumer credit escalate.

Wall Street has speculated that Target, which for years had pooh-poohed the idea of selling the operation, which has about $7 billion in credit-card receivables, has been prodded to make the move by activist Bill Ackman, who disclosed a nearly 10 percent stake in Target this summer.

Ackman, who runs the $6 billion hedge fund Pershing Square Capital Management, didn’t respond to a request for comment.

Minneapolis-based Target, which had aimed to decide on a possible sale this month, now says it could be another three months before it makes up its mind. The delay is a fresh sign that logical buyers for Target’s portfolio – big financial firms like Citigroup and GE Capital – are skittish as the imploding housing market and tightening credit hits shoppers’ wallets.

“In the right environment at the right price, Target would probably consider it,” says Todd Slater, an analyst at Lazard Capital Markets. But right now, “there’s no reason to fire-sale it.”

Target, which hawks “cheap chic” fashions from designers like Isaac Mizrahi and Michael Graves, had long argued that its credit-card portfolio was a key contributor to profits. But in September, the company announced it had hired Goldman Sachs to explore a possible sale.

Ackman’s hedge fund has pressed other big chains like McDonald’s and Wendy’s to cut spending, buy back shares and sell off assets. That has fueled speculation that he’s rattling cages about the credit cards.