From Roseville to Greatland, Target still hits the mark - Dayton-Hudson Corp. Target Stores - Growth Retailer of the '90s - company profile

Discount Store News, Sept 17, 1990 by Arthur Markowitz

As the '60s ended, Target expanded into Texas and Oklahoma with six stores to become a 17-store chain. It also launched a regional structure with districts in St. Louis and Dallas, and opened its Northern Distribution Center in Fridley, Minn., that included a computerized distribution system. Its parent, meanwhile, merged with Hudson, a Detroit-based department store chain, to become Dayton Hudson, a retailer composed of Target and five major department store chains.

In 1970, the chain added seven stores, including its first two in Wisconsin, with the 24 units hitting the $200 million mark. The next year, Target acquired 16 former Arlan's in Colorado, Iowa and Oklahoma, opening two takeovers, plus four new units. In 1972, the other 14 takeovers and two new stores were added. Target that year moved its headquarters to the IDS Center, Minneapolis' tallest building.

But the rapid expansion to 46 stores, along with the chain's new top executives' inexperience as discounters, resulted in a decrease in operating income and profits. A key error was a combination of overstocking and carrying the goods from year to year without regard to the inventory and storage costs.

In 1973, Stephen L. Pistner, who had revived another troubled retailer, was named chief executive officer, with Kenneth A. Macke, senior vp, merchandise manager of soft lines. Pistner became known as a turnaround specialist because of his success at Target, and later was asked to do the same at Montgomery Ward and now at Ames.

Target's new management took tremendous markdowns to clean out the overstock and halted its growth to just one store; then they focused on reviving and refining merchandising and operations. The two-year remake of Target included a retreat by company executives to a Minneapolis hotel in 1974 for a over a week to develop Decision Guides - the operating policies and philosophies for the chain's future growth. With modifications and updates, Target has continued to use that blueprint, now called Guides for Growth, to direct its destiny.

The two-year revamping paid off in 1975 as Target's recovery turned the discounter into Dayton Hudson's top chain in revenue. The chain opened two stores, reaching 49 units in nine Midwestern states and $511 million in sales.

There was no stopping Target now. The discounter added four stores in 1976 as sales reached $600 million and then seven more units in 1977. That year, Macke, named Target president and ceo in 1976, was promoted to chairman and ceo to succeed Pistner, who became president of parent Dayton Hudson; Bruce G. All-bright-moved from the parent firm, where he was senior vp, specialty stores, to succeed Macke as Target president.

The decade came to a close with Target opening eight stores in 1978, including its first as a shopping center anchor in a Grand Forks, N.D., mall, and then 13 the next year to end 1979 with 80 units and $1.12 billion in sales.

The 1980s saw continued Target growth and expansion, first into California, then into rival K mart's home base, Detroit, and finally the Pacific Northwest.