Target Corporation
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Target Corporation Template:Nyse was founded in Minneapolis, Minnesota in 1902. It is the second most successful discount retailer in the United States, behind Wal-Mart. It is the fourth largest retailer in the United States behind Wal-Mart, The Home Depot, and Sears Holdings Corporation. The Bullseye logo of the company and its stores are one of the most recognized corporate symbols in the United States.
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History
The company was founded in 1902 when George Dayton opened a retail store in downtown Minneapolis. Originally known as the Dayton Dry Goods Company, it became the Dayton Company in 1910.
In 1962, the Dayton Company opened its first Target discount store in Roseville, Minnesota, a suburb north of St. Paul. By 1979, it would be the company's top revenue producer.
In 1969, the Dayton Company merged with the J.L. Hudson company. In 1978, the company acquired Mervyn's, and in 1990 it acquired Marshall Field's.
Dayton Hudson Corporation changed its name to Target Corporation in 2000; by then, more than 75 percent of the corporation's revenue came from the Target division. In 2001, Target Corporation announced that its Dayton's and Hudson's stores would operate under the Marshall Field's brand. The three brands had been operating as a single unit, the Department Store Division.
On March 10, 2004, Target Corporation announced it had hired Goldman Sachs Group to analyze options for selling its Marshall Field's and Mervyn's chains of department stores. Three months later, on June 9, 2004, Target Corporation announced its sale of the Marshall Field's chain and several Mervyn's stores to St. Louis, Missouri-based May Department Stores Company, which became effective July 31, 2004. On July 21, 2004, it announced the sale of Mervyn's to an investment consortium including Sun Capital Partners, Inc., Cerberus Capital Management, L.P., Lubert-Adler/ Klaff and Partners, L.P., which was finalized September 2.
Today, Target Corporation operates its retail division under the banner of 'Target'. The company owns several other subsidaries, which include:
- Target National Bank, which issues the Target Visa and Target Guest Cards
- Target Sourcing Services / Associated Merchandising Corporation (TSS/AMC), which locates merchandise from around the globe for Target and helps import the merchandise to the United States
- Target Commercial Interiors, which provides design-services and furniture for office space
- Target Brands, which owns and oversees the company's private label products
Retailing Division
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Target Corporation's discount retail chain in the United States has 1,330 stores in 47 states that operate under the mastheads of Target, Target Greatland, and SuperTarget. The first Target store opened in 1962 in Roseville, Minnesota. That store was closed and demolished on January 8, 2005 to make room for a SuperTarget in its place. Target stores are generally 95,000 to 125,000 square feet (12,000 m²) and carry hardlines ("normal" products and goods), softlines (clothing), and a limited amount of groceries, usually non-perishable. Target Greatland stores are about 150,000 square feet (14,000 m²), and those stores have more general merchandise than a Target. SuperTargets are about 175,000 square feet (16,000 m²), and carry everything a smaller Target does in addition to a full-service grocery store. Target Corporation has aggressive plans to have 2,010 stores open by the year 2010.
Target is known to be flexible with its store designs, and has over 30 two-story stores in urban areas, where a one-level Target is not pratical.
In order to create a niche for itself, Target is known for differentiating itself from competitors like Kmart and Wal-Mart by offering more upscale, trend-forward merchandise. In fact, Target refers to itself as a "discount department store" instead of just a discount store.
Some examples of how Target differentiates itself from competitors are:
- It does not play music in its stores, commonly known as elevator music and often distributed by Muzak
- Target calls its customers "guests" and its employees "team members". It derived this practice in the early 1990's from the Walt Disney Corporation.
- Target designs it stores to be more attractive than Wal-Mart by having wider aisles and drop ceilings, among other things.
- Target has many exclusive deals with various designers, including Issac Mizrahi, Michael Graves, Mossimo, and Liz Lange, among others. Wal-Mart and Sears Holdings Corporation (in both its K-Mart and Sears divisions) have followed Target's lead by signing exclusive designers to their stores as well.
Many of Target's biggest fans jokingly refer to the store as "Tar-ZHAY", as though it were a French word, a reference to its more upscale image compared to its competitors.
There is also a Target operating as a department store under the same logo and a similar style in Australia with over 150 stores. The brand in Australia is owned by Coles Myer. Target USA does not and never has operated stores outside of the United States.
Philanthropy
Target Corporation has a policy of philanthropy and is a member of the so-called keystone program. Under the program, companies aim to donate between 2 and 5 percent of their federally taxable incomes to charity. Target is consistently ranked as one of the most philanthopic companies in the United States, and gives over $2 million a week in the communities it operates. It also gives a percentage of charges from its Target Visa to schools designated by the cardholders. To date, Target has given over $150 million to schools across the United States.
Target has a standard no-solicitation rule at its properties, as it wishes to provide a "distraction-free shopping experience for its guests". Exemptions to this policy were previously made for the Salvation Army to station its traditional red kettles and bell-ringers outside Target stores during the Christmas season.
Target & the Salvation Army
Target Stores made a corporate decision that during the 2004 Christmas season, the Salvation Army would no longer be allowed to station the red kettles and bell ringers at store entrances. Target based this decision on the fact that other organizations were asking for solicitation space on its properties, and Target felt it could no longer make an exception for one organization. Target informed the Salvation Army of its decision to no longer allow the bell ringers in January 2004, in order to allow the Salvation Army to make alternate plans. The Salvation Army estimates that previous placements of kettles outside Target stores generated 8% of their annual revenue. To make up for the loss of the kettle revenue, Target asked the Salvation Army to submit a grant request in line with Target's standard donation procedures.
Target Corporation states on its website, "while some of our guests may welcome the opportunity to support their favorite charity or cause, allowing these organizations to solicit means that Target would also have to permit solicitation by organizations whose causes or behavior may be unacceptable to our guests." Target cites no specific organizations, causes or behaviors as an example.
Some right-wing organizations and individuals have called upon customers to boycott Target Stores as a result of the decision to prevent the Salvation Army from collecting donations at Target stores. This boycott has seemed to have failed as Target's sales increased 11.3% in December 2004, and same-store sales increased 5.1%. By comparison, Wal-Mart's comparable sales for December 2004 only increased 2.6%.
Meanwhile, competitors such as Wal-Mart have responded by making explicit statements to allow red kettles to be stationed outside their stores. Other national retailers, such as Circuit City and Best Buy, also have no solicitation policies at their stores, and do not allow the Salvation Army to solicit.
Possibly in response to Target's decision, Wal-Mart pledged to match kettle contributions outside Wal-Mart locations during the Christmas 2004 season up to 1 million dollars. Target continues to make corporate donations to the Salvation Army.
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Diversity
Target Corporation was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
Major sponsorships
Target owns the naming rights to the Target Center in Minneapolis. It also sponsors NASCAR, Indy Car, and IRL racing teams of Chip Ganassi.
Books
Rowley, Laura (2003) On Target: How the World's Hottest Retailer Hit a Bulls-eye John Wiley & Sons; Hoboken, New Jersey
External links
- Target Corporation (http://www.targetcorp.com/)
- Target e-commerce (http://www.target.com/)
- Associated Merchandising Corporation (http://www.targetcorp.com/targetcorp_group/companies/amc_glance.jhtml/)