ACWORTH, Ga. — Target executives told the annual shareholders meeting Wednesday that the company will build on brand initiatives such as the GO International program to bring innovation and newness to apparel assortments and implement its "great design at affordable prices" strategy.
GO International, currently spotlighting French designer Tara Jarmon, highlights European designers in juniors and contemporary sportswear in 90-day segments throughout the year. The series kicked off with the U.K.'s Luella Bartley, but the identities of other designers to be featured weren't disclosed.
Robert Ulrich, chairman and chief executive officer, said Minneapolis-based Target Corp. would also stress new brands in its bath and body departments that are usually found only in specialty stores. And intimate apparel departments will continue to be updated through brand partnerships.
The emphasis on design and specialty apparel brands will be balanced with expanded food offerings, both in general merchandise stores and through more rapid growth of new SuperTarget locations. Rival Wal-Mart Stores Inc. has launched more expensive and fashionable apparel under the Metro 7 label and is trying to lure higher-spending shoppers.
The setting for the annual meeting, in a SuperTarget set to open in July in Acworth, a northwest suburb of Atlanta, emphasized the chain's focus on the SuperTarget format, which combines general merchandise and a full supermarket.
The Acworth store is a prototype intended to combine aesthetics and convenience, said a spokeswoman, with design elements such as more natural lighting and better flow between departments.
Ulrich told about 70 shareholders who attended the meeting, which lasted less than an hour, that Target planned to open 100 new stores in 37 states during 2006, with no immediate plans for international expansion.
Target this week reported strong first-quarter sales and profits, but earnings per share missed the mark. The dip in the gross margin rate for the quarter caused EPS to fall a penny short of Wall Street estimates.
The chain, with almost 1,400 stores, reported that net income for the quarter ended April 29 increased 12.1 percent, to $554 million, or 63 cents a diluted share, from $494 million, or 55 cents, in the year-ago quarter on total revenues that gained 12 percent, to $12.86 billion from $11.48 billion. Total revenues include an 11.8 percent increase in sales, to $12.49 billion from $11.17 billion. The balance of Target's revenue came from its credit card business. Same-store sales in the period rose 5.1 percent. Target posted more than $50 billion in 2005 annual sales, with 1,397 stores. The chain plans to have 2,000 stores by 2010.
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