Target name change hits bull's-eye with analysts
MINNEAPOLIS - The success of Target Stores reached a new milestone Jan. 31. As the opening bell sounded on the New York Stock Exchange, Target Corp. marked its first day of trading under the ticker symbol TGT.
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On Jan. 13, Dayton Hudson Corp. announced it would change its name to Target Corp. to reflect the fact that Target Stores comprise more than 75% of the company's revenues and pre-tax profit.
"The Target name makes a lot of sense to the investment community. It's a great concept and great brand," says Frederick Marx, a retail analyst with Marx Layne Public Relations in Farmington Hills, Mich.
The decision by Dayton Hudson to shed its venerable name has put department stores on notice that they are capital-intensive, limited-growth vehicles, Marx explains. "Target is a transportable concept as it moves into other parts of the world. The department stores really are not. Department stores are a regional concept."
Michael Crosson, CEO of Southfield, Mich.-based Jon Greenberg & Associates Inc., a retail design firm, described the decision by Dayton Hudson to change its name as an exceptionally bold and brilliant move. "Target has developed taste, class and value," he says. "This is at the core of what the consumer is looking for today."
The name change was an emotional one for some industry observers, Crosson acknowledges. "It's like the matriarch of the family died and the family is continuing on, but it's not the same it used to be. At the same time there exists this excitement and what it means for Target and its investors."
Target Corp. is the nation's fourth largest general merchandise retailer. The company's five store brands include Target, Mervyn's, Dayton's, Marshall Field's and Hudson's. Target Corp. operates 1,245 stores in 44 states. This includes 914 Target stores, 267 Mervyn's stores and 64 department stores.
In 2000, Target Corp. plans to add approximately 70 new Target stores, including 15 SuperTargets. The parent company's main objective is to deliver annual earnings per share growth of 15% or more, says Bob Ulrich, chairman and CEO.
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