How to save your cash: Sprint’s $200M deal for the retailer is a big win for shareholders
Posted October 14, 2018 04:23:25 This morning, Sprint announced a big new deal with Target, worth $200 million.
The deal gives Sprint the right to sell Target branded merchandise to Sprint customers for $200 a pop.
The new deal is a win for the company, which has been battling with retailers for years to regain its market share.
Sprint is currently the only retailer with a direct relationship with Target in the US.
A few years ago, Sprint partnered with Target to offer a “Target-branded prepaid card” for $25 a year.
That card was later discontinued, and the company has since sold a prepaid card to other retailers.
But the company is hoping that the new deal will help boost sales of its own branded products, and that will help it attract more customers.
“This agreement will give us the opportunity to expand our retail footprint to include Target branded products,” said Sprint CEO Marcelo Claure.
“This is a great opportunity for our customers and we are confident that this partnership will help us continue to expand the footprint of our branded stores.”
The deal comes as Sprint is trying to revive its business after years of struggling with declining sales.
Its shares dropped by more than 20% in after hours trading on Friday morning, after the news broke.
The company’s market capitalisation fell to $11.6 billion on Friday, and its market capitalization had fallen to $10.2 billion by Thursday morning.
Despite the loss, Claure said that he was pleased with the deal.
“Sprint continues to grow, and we’re excited to be able to expand its retail footprint,” he said.
“The addition of Target is an exciting development for our retail customers and our employees.”
While the new agreement is a good sign for Sprint, there are still some hurdles ahead.
Target, for one, still has not been able to win over consumers to its new prepaid card.
According to a recent survey by the research firm Gartner, consumers are very reluctant to use Target branded goods.
In fact, just 37% of respondents said they’d use Target products.
And despite the good news from Sprint, some analysts are worried that it could hurt its stock price.
While Claure has said that Sprint has a good relationship with the retailer, analysts have argued that it will be tough for Target to sell the new prepaid cards to customers who do not already own them.
Still, the deal is good news for Sprint and is another sign of the growing success of its business.
For more from the FT, visit the FT’s website.