TARGET CHIEF MAPS EXPANSION MODE
Byline: Don Yaeger
MINNEAPOLIS — Target has “plentiful” growth opportunities and could double in size, Bob Ulrich, chairman and chief executive officer of parent Target Corp., told shareholders at the annual meeting here.
The Target discount chain has 931 stores and will add about 80 units this year, following about 70 in 1999. At that rate of growth, Target would double its store count in roughly 11 or 12 years. Target Corp. also operates about 64 department stores and 267 Mervyn’s units.
Expansion this year centers on the mid-Atlantic and northeast markets; the Target chain is entering West Virginia and Connecticut for the first time, shareholders were told.
After a 20-minute meeting that played before 500 stockholders, Gregg W. Steinhafel, president of the Target division, told WWD that the women’s apparel business had been running “a little better than men’s.” Children’s wear had been the strongest apparel category, he added.
Target’s children’s business has been given a lift by the chain’s “Take Charge of Education” program under which 1 percent of purchases made on a company credit card is donated to a school.
Another company official said after the meeting that apparel sales had been soft in the company’s department stores. “The youthfulness” of the spring assortment, said the official, failed to catch on with customers. However, results at the department stores, which operate under the Marshall Field’s, Dayton’s and Hudson’s names, should improve with the fall season because collections are expected to be more traditional and classic.
Target Corp. has long been dogged by rumors that it would sell the Mervyn’s and department stores to focus on the more successful and rapidly growing Target discount chain. The speculation was fueled when the corporation changed its name from Dayton Hudson to Target a few months ago.
Ulrich, who has repeatedly denied that the corporation plans to sell Mervyn’s or department stores, on Wednesday once again deflated the speculation by telling shareholders that despite the name change, the department stores and Mervyn’s “will continue to add value to our business for many years ahead.”
He then outlined Target’s “differentiation strategy” of offering merchandise a cut above that of such competitors as Wal-Mart and Kmart. He cited such exclusive lines as Brambly Hedge cosmetics, and Utility, Xhileration, Cherokee and Prospirit apparel lines.
Target is also differentiating itself from its competition with Calphalon, Stiffel, Discovery Channel toys, and designs by Michael Graves and Robert Abbey in the home area. In soft lines, a Niki Taylor women’s apparel line will be tested in 150 stores this holiday, and an exclusive Mossimo sportswear collection will make its debut in early 2001.
As reported, the Target chain posted a 22.9 percent gain in earnings before interest, taxes, depreciation and amortization in the first quarter. Revenues were ahead 11.5 percent and same-store sales were up 4 percent.
Corporate first-quarter earnings surged 23.2 percent, with total sales advancing 8.2 percent and comparable sales ahead 3 percent.