Taking aim Avalanche: The Target discount chain is about to invade Maryland with nine new stores by the end of the month and three more in October.

July 14, 1996|By Alec Matthew Klein | Alec Matthew Klein,SUN STAFF

Big. Huge. Gargantuan.

Another name for what's coming: Target.

In the largest retail invasion ever in the mid-Atlantic region, Target is about to flood Maryland and Virginia with 21 cavernous discount stores over the span of eight months, creating thousands of jobs, tens of millions of dollars in construction investment and, not to be overlooked, an alternative for that perspicacious bargain-hunter.

Target Stores, a Minneapolis-based juggernaut of toothpaste, tube socks and other general merchandise, tiptoed into the market in March, opening its first two stores in Virginia's Fredericksburg and Woodbridge.

But the long-anticipated stampede will officially arrive July 28, when Target is expected to rock the natural order of retail things by simultaneously opening 13 stores in the region, nine in Maryland and four in Virginia.

"Demographically, it's our guest, it's our customer," said Tom Sands, Target's regional senior vice president for the East Coast. "We think that it's a good fit. This is really the last of the markets where Wal-Mart and Kmart are not competing with us."

Target welcomes the challenge: The chain has devised a successful high-volume, low-margin formula to ratchet up the competition in its relentless expansion, a retail version of manifest destiny.

Touting itself as an "upscale discounter," the retailer has managed to make sense of an oxymoron, offering merchandise of finer ilk than the typical off-price merchant, but selling it inexpensively -- a few cents more on the average than for those items found at Wal-Mart, the acknowledged low-price leader.

"Speed is life" is Target's mantra. "Fast, fun and friendly" -- so goes the retailer's motto.

Applied, it means that the company uses state-of-the-art technology. A "radio frequency locator system" pinpoints the location of merchandise in every store. A computerized "replenishment system" gets merchandise in stores quickly, ordered at the store-level, not from headquarters. Micro-marketing is employed to suit the tastes of each local environment, such as specific high school apparel, or for the Baltimore baseball fanatic, Orioles merchandise.

But that's merely prologue. Target, the nation's third largest discount retailer behind Wal-Mart and Kmart, is prepared to pull the trigger on six more stores in October, three each in Maryland and Virginia. Beyond that, the discounter plans to unleash another 40 to 60 stores in the region over the next two or three years.

"That's a complete penetration and domination of the market," said Mark A. Millman, president of Millman Search Group Inc., a leading retail consulting firm in Lutherville. "This is the largest domination I've ever seen of a 'category killer' completely dominating two major markets within a relatively short period of time. Even Wal-Mart didn't do that. Nobody's come in with that kind of punch. They're coming in to completely dominate every geographical region in this market."

There is no comparison. Kmart, the area's first discount behemoth, settled in Virginia in 1964 with three stores, and then in Maryland in 1972 with two stores. Wal-Mart moved into Washington in 1991, Baltimore a year later, opening stores one at a time.

Of more recent vintage, Best Buy, the consumer electronics retailer, entered the Baltimore-Washington market with eight stores in 1994. And a year later, Dick's Clothing & Sporting Goods opened three local stores.

By contrast, Target will hold sway over as many as 80 mid-Atlantic stores by 1999. Unprecedented expansion for a major retailer here -- but this much is known: The discounter's impact is expected to be atomic, generating millions in tax revenue, advertising and charitable contributions.

The first 21 stores in the region are expected to create more than:

Three thousand jobs and as many as 4,200. Each store employs about 150 to 200 workers, most hired locally, most as part-time sales clerks averaging 30 to 35 hours per week on an hourly wage that varies by region.

One hundred million dollars in the construction of all new stores, each costing from $5 million to $10 million to build, depending on size. In addition, the company expects to spend $200,000 a year per store on contractor services ranging from snow removal and floor cleaning to landscaping and maintenance.

Two million square feet of retail space -- equivalent to about seven Baltimore skyscrapers -- based on stores ranging from 96,000 to 126,000 square feet.

"They've never been afraid to go against competition, but I've never seen them go in like this," said Rene Daniel, president of the Daniel Group, a Baltimore-based shopping center consultant. They're going in with both barrels blazing."

Indeed, never before has Target entered a major market on such a grand scale. And it is doubtful that the retailer will do so again.

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