Target has Baltimore in its scope

April 21, 1994|By Jay Hancock | Jay Hancock,Sun Staff Writer

Target Stores, the Minneapolis-based discount chain that retail experts call "an upscale Wal-Mart," intends to open as many as 45 of its large stores in the Baltimore-Washington region in the next several years, a real estate broker said yesterday.

The chain is the nation's third-biggest purveyor of discount apparel, beauty aids and household goods. It is looking at potential store sites from Northern Virginia to Baltimore County and could ring up its first local sale as early as next year, said Richard Rotner, president of Hicks & Rotner Associates Inc., a real estate brokerage based in Towson.

Target officials declined to discuss their interest in Washington and Baltimore.

"We're certainly looking at the area. But it's very preliminary," said Target spokeswoman Carolyn Brookter.

But Mr. Rotner said Target is "very serious" about the region, planning 15 to 20 stores in the Baltimore area and 20 to 25 around Washington over the next five to 10 years.

Target is growing rapidly beyond its Midwest base and is looking at the Northeast, the main U.S. region where it doesn't yet have stores, retail analysts say. As in other parts of the country, its main competition here will be Wal-Mart and Kmart -- No. 1 and No. 2 in the discount field -- plus the usual array of department stores and mass merchandisers.

Like Wal-Mart and Kmart, it sells lawn furniture and shampoo, toys and toaster ovens. But Target's specialty is soft goods. It generally carries more lines and variety of basic men's and women's clothing, towels, sheets, curtains and the like.

And its clothing is "a little higher on fashion content . . . a little more upscale" than that of the average discount store, said Saul Yaari, who follows Target's parent company, Dayton Hudson Corp., for Minneapolis investment firm Piper Jaffray & Hopwood.

Target's target customers are "young, well-educated families with above-average incomes" who are nevertheless budget-conscious, said N. Richard Nelson Jr., an analyst with the Chicago investment firm of Duff & Phelps Inc.

The chain is growing quickly, adding 60 stores this year to the 567 it already has. Target has become Dayton Hudson's dominant division, furnishing 77 percent of the parent company's sales last year and 60 percent of its profits.

Dayton Hudson, based in Minneapolis, also operates Hudson's, Dayton's and Marshall Field's department stores.

Target had operating profit of $662 million in fiscal 1993 on sales of $11.74 billion.

Like Wal-Mart, Target has big stores -- 100,000 square feet and beyond. Its newest store type -- the kind it's likely to develop in this area -- is 130,000 square feet with departments separated as distinct "boutiques" under one roof.

Target seldom leases existing buildings, preferring to own or lease a lot and build the store itself, said Mr. Rotner, whose firm signed an agreement several weeks ago to handle regional deals for the chain.

No sites have been selected for the Target stores in the Baltimore-Washington region.

Target generally puts stores in strip shopping centers but sometimes builds free-standing stores or locates in large malls, analysts said.

The company hasn't been shy about tangling with Wal-Mart -- either at the cash register or in the media. It often puts stores near Wal-Marts.

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