TARGET: LOOKING EAST
Byline: Carol Emert
WASHINGTON — Stepping up its drive into the mid-Atlantic region, Target Stores is on track to open 24 units between Baltimore and the Tidewater region of southern Virginia next year, beginning in July.
According to real estate sources, the discounter already has broken ground at several sites in Virginia and Maryland and is actively looking for more locations.
Target officials, including Ken Woodrow, president, and Tom Sands, a senior vice president, are expected to lay out more details of the discounter’s mid-Atlantic expansion plans during a news conference here today at the Sheraton Carlton Hotel.
A Target spokeswoman declined to specify the number of stores Target plans for the various mid-Atlantic markets but confirmed the chain’s intention to enter several new markets, including Baltimore, Washington, Richmond, Roanoke and the Tidewater areas of Virginia.
The Target division of Dayton Hudson Corp. is the nation’s third-largest discount chain. Its 673 stores produce a volume of $13.6 billion.
Except for a 13-state area in the Northeast, Target has stores from coast to coast. It began a push into the Northeast this year with a series of openings in Akron and Cleveland, Ohio, and has begun construction of a 1.6-million-square-foot distribution center in Staunton, Va., to supply the stores. The warehouse is expected to open next fall.
Retail analysts often refer to Target as “the upscale discounter,” a reference to the chain’s wide aisles, clean presentations and dominant assortment of fashionable apparel.
In the Washington suburbs, real estate officials said Target has broken ground at six locations: Fredericksburg, Sterling and Dale City, Va., and, Laurel, Bowie and Largo, Md. The walls are already up at the Dale City location, which is near the Potomac Mills Mall.
Construction work also has begun at sites in the Baltimore suburbs of White Marsh, Belair and Westminster. Target stores typically range from 95,000 to 115,000 square feet.
“In the next couple of weeks, we’ll be closing on more [locations],” said Marc Katz, executive vice president of Hicks & Rotner Associates, a Chevy Chase, Md., real estate firm working with Target.
Katz said Target will open its stores near Washington in two phases, one in July and a second in October, with a total of 12 to 15 locations operational in early 1997.
Target also is evaluating the downtown Washington flagship store of the now-defunct Woodward & Lothrop department store chain as a possible location, Katz said.
“We’re looking at it, but it’s not on the front burner,” he said, adding that zoning and traffic problems make the former W&L site a low priority.
The flagship, which was not included in the acquisition of Woodward & Lothrop by May Department Stores Co. and J.C. Penney Co., remains vacant.
Wal-Mart Stores, Kmart and Caldor Corp. are the leading discount stores in the Washington area, although none of the chains has stores within the nation’s capital.
In Richmond, Target is planning to open three stores in 1996 and four more in 1997, according to Larry Agnew, a broker at Richmond-based Morton G. Thalhimer Realtors. Thalhimer is handling Target’s Virginia real estate search outside the Washington area.
An undisclosed number of stores also is expected to open in 1996 in the Tidewater cities of Newport News, Virginia Beach and Norfolk, while locations in Portsmouth and Hampton are being considered, Agnew said.
“The whole state of Virginia is pretty much under their microscope right now,” he added. “They expect to be the dominant player along with Wal-Mart at the expense of Kmart.”
In Washington and Virginia, Target has its eye on several sites now occupied by Caldor, real estate brokers said. Caldor, a regional discounter based in Norwalk, Conn., filed Chapter 11 in September and is expected to reject some leases during its bankruptcy proceedings.
“Caldor was pretty far along with several sites [in Virginia], but with the advent of Chapter 11 those deals have kind of dissolved,” Agnew said.
Caldor previously said it has postponed store openings in District Heights and Silver Spring, Md., while it is reorganizing under Chapter 11, and another unit planned for Beacon Mall in Alexandria, Va., has been canceled.
Agnew said Target will build Super Target units with full-line supermarkets at some of the Richmond locations to help it compete against Wal-Mart, which plans to convert some existing Richmond stores to supercenters.
Target opened its first two supercenters this year in Omaha and in Lawrence, Kan. The Washington-Baltimore Targets will not have full-line supermarkets.
Target’s mid-Atlantic foray comes about 10 years after its first attempt to enter the region. At that time, Target scouted for sites but decided instead to focus expansion efforts in the West.
Target’s spokeswoman said the discounter now has a more aggressive strategy.
“If we’re talking about getting the lion’s share of consumers, we have to go East,” she said. “There’s been a change in our way of thinking; we have to move aggressively toward that area.”