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Target Corporation is the second-largest discount retailer in the United States, behind Walmart, and is a component of the S&P 500 Index. Founded by George Dayton and headquartered in Minneapolis, Minnesota, the company was originally named Goodfellow Dry Goods in June 1902 before being renamed the Dayton's Dry Goods Company in 1903 and later the Dayton Company in 1910. The first Target store opened in Roseville, Minnesota in 1962, while the parent company was renamed the Dayton Corporation in 1967. It became the Dayton-Hudson Corporation after merging with the J.L. Hudson Company in 1969, and held ownership of several department store chains including Dayton's, Hudson's, Marshall Field's, and Mervyn's.

Target established itself as the highest-earning division of the Dayton-Hudson Corporation in the 1970s; it began expanding the store nationwide in the 1980s and introduced new store formats under the Target brand in the 1990s. The parent company was renamed the Target Corporation in 2000 and divested itself of its last department store chains in 2004. It suffered from a highly publicized security breach of customer data and the failure of its short-lived Canadian subsidiary in the early 2010s but experienced revitalized success with its expansion in urban markets within the United States.

As of fiscal year 2015, Target operates 1,792 locations throughout the United States. Their retail formats include the discount store Target, the hypermarket SuperTarget, and "flexible format" stores previously named CityTarget and TargetExpress before being consolidated under the Target branding. Target is often recognized for its emphasis on "the needs of its younger, image-conscious shoppers," whereas its rival Walmart more heavily relies on its strategy of "always low prices." An Australian version of Target has been in operation since 1973, and is currently owned by Wesfarmers; aside from naming rights, however, the American and Australian companies are unaffiliated.

History


After the Westminster Presbyterian Church in Minneapolis, Minnesota burned down during the Panic of 1893, its parishioners asked churchgoer George Dayton to purchase a piece of land adjacent to the original church so it could rebuild. Dayton bought the lot and constructed a six-story building on the property; he later purchased the existing Goodfellow Dry Goods store, which was also located in Minneapolis, and moved it into his facility in 1902. The business was renamed the Dayton Dry Goods Company in 1903, and later the Dayton Company in 1910; it acquired the Minneapolis-based jeweler J.B. Hudson & Son shortly before the Wall Street Crash of 1929. George Dayton died in 1938 and was succeeded by his son Nelson Dayton as president, who was replaced by his own son Donald Dayton after his death in 1950. Straying from the one-person leadership and adherence to Presbyterian guidelines that had been followed since its founding, Donald established an executive board consisting of five of his cousins and together shifted towards a more secular style of business operation.

While working for the Dayton Company, John F. Geisse conceived the idea of upscale discount shopping. Working off of his concepts, the Dayton Company opened the first Target discount store at 1515 West County Road B in the Saint Paul suburb of Roseville, Minnesota; its first president was Douglas Dayton. The name "Target" originated from publicity director Stewart K. Widdess, and was intended to prevent consumers from associating the discount store with the growing Dayton's department store chain. The Dayton Company created the subsidiary B. Dalton Bookseller in 1965, merged its San Francisco-based acquisition Shreve & Co. and J.B. Hudson & Son into Dayton Jewelers in 1967, and folded the newly-acquired Pickwick Book Shops of Los Angeles into B. Dalton Bookstores in 1968. In 1969, the company bought the Philadelphia-based J.E. Caldwell jewelry chain and Boston-based electronics chain Lechmere.

The Dayton Company was renamed the Dayton Corporation and held its initial public offering in 1967, and merged with the Detroit-based J.L. Hudson Company to form the Dayton-Hudson Corporation in 1969. The new company, at the time the 14th-largest retailer in the United States, consisted of Target and the department stores Dayton's, Diamond's, Hudson's, John A. Brown, and Lipman's. It acquired Team Electronics and the jewelers C.D. Peacock, Inc. and Jessop and Sons in the 1970s. After a successful initiative to reduce overstock and a slowed rate of expansion, Target became Dayton-Hudson's top revenue producer in 1975. Dayton-Hudson was established as the seventh-largest general merchandise retailer in the United States with its acquisition of Mervyn's in 1978. Dayton-Hudson converted former locations belonging to Indianapolis-based Ayr-Way and San Diego-based FedMart under the Target branding in 1980 and 1982, respectively. It sold the Dayton-Hudson jewelers subsidiary to Henry Birks & Sons of Montreal in 1982, Diamond's and John A. Brown to Dillard's in 1984, B. Dalton Bookseller to Barnes & Noble in 1986, and Lechmere to Berkshire Partners in 1989.

Dayton-Hudson purchased 50 Gemco locations in southern California in 1986, and acquired the entirety of the Gold Circle and Richway chains in 1988, all of which were reopened as Target locations. The company acquired Marshall Field's and opened its first Target Greatland store in Apple Valley, Minnesota in 1990, Two test concept Everyday Hero clothing specialty stores were in operation in Minneapolis from 1992 until 1997, while the four Smarts closeout stores that were introduced in 1993 were closed in 1996. In 1995, the first SuperTarget hypermarket opened in Omaha, Nebraska and the Target Guest Card, the discount retail industry's first store credit card, was launched. In the latter half of the decade, Dayton-Hudson acquired Rivertown Trading Company in 1998, and California-based Fedco in 1999.

The Dayton-Hudson Corporation was renamed the Target Corporation, and its ticker symbol changed from DH to TGT, on January 30, 2000. The company continued to hold ownership of Target, Dayton's, Hudson's, Marshall Field's, and Mervyn's, with the former contributing to 75% of its earnings. Dayton's and Hudson's were folded into Marshall Field's in 2001, which itself was ultimately sold to May Department Stores in June 2004. That September, Mervyn's was purchased by an investment consortium including Sun Capital Partners, Cerberus Capital Management, and Lubert-Adler/Klaff and Partners, L.P. Target later began corporate operations in India as "an extension of our corporate headquarters" in 2005. In addition to the typical big-box store format of its suburban locations, the company began opening smaller CityTarget and TargetExpress stores in urban areas during the 2010s.

Canadian expansion


Speculation regarding Target's interest in purchasing the Canadian discount store chain Zellers first circulated in 2004. The company first discussed desire for international expansion in 2010, specifying Canada as a market of interest, although noted that it would take three years to execute the endeavor. In January 2011, Target announced that it would acquire the leases of roughly 220 Zellers locations from Hudson's Bay Company for C$1.825 billion; the final figure was reduced to 189 leases by September. It stated that it would operate the Zellers stores under the existing branding "for a period of time" until expansion plans under its own masthead were more fully developed.

The first Target Canada stores opened in Guelph, Fergus, and Milton, all of which are located in Ontario, on March 5, 2013. By the end of its first year in operation, the subsidiary had opened over 100 locations in the country; market analysts felt that the strategy was excessive considering the brand had not established a brand loyalty in the country prior to launch, in addition to the fact that the extensive renovations of the former Zellers locations was a costly undertaking for the new subsidiary. Target Canada also suffered from the perception that its prices were significantly higher and its offerings more limited than its local competitors, namely Walmart Canada.

Target president Brian Cornell stated that the Canadian operations were "losing money every day" and that the company was "unable to find a realistic scenario that got Target Canada to profitability until at least 2021." The subsidiary officially filed for bankruptcy in January 2015; it would have been unable to meet its employees' payroll for the week of January 16 without the bankruptcy protection. It began closing all of its 133 stores on March 18, and closed its final units on April 12. The majority of the closed facilities were purchased by Canadian Tire, Lowe's, and Walmart Canada.

Data breach
In December 2013, it was announced that Target had suffered a data breach of its systems that affected between 70 and 110 million customers between November 27 and December 15; among the information compromised were credit card numbers and personal files including names, email and mailing addresses, and telephone numbers. It was established as the second-largest data breach in U.S. history, behind an incident experienced by TJX Companies in 2007 in which over 90 million individuals were impacted. Target began reissuing its RedCards with EMV "chip-and-pin" capabilities in 2015, and replaced its Visa credit card versions with MasterCard substitutes. The company reached a class-action settlement with affected customers for $10 million in March 2015, and settled with affected banks and credit unions for $39 million in May 2016.

Target


The first Target discount store opened in Roseville, Minnesota on May 1, 1962. Present-day properties are roughly 135000 sqft, and sell general merchandise including hardlines and softlines. While many Target stores follow a standard big-box architectural style, the company has focused on "customizing each new store to ensure a locally-relevant experience [...] that best fit the surrounding neighborhood’s needs" since the 2010s. Initially, only SuperTarget locations operated Starbucks Coffee counters, although they were integrated into general merchandise stores through their expanded partnership beginning in 2003. Several locations include Target Optical, Target Photo, and Target Pharmacy departments; the latter service was purchased by CVS Health in 2015, and began operating as stores-within-stores under the CVS Pharmacy and MinuteClinic mastheads in February 2016.

Target introduced the "PFresh" store prototype in 2009, which expanded their grocery selection in general merchandise locations by an upwards of 200-percent. Newly constructed stores that follow the PFresh format are roughly 1500 sqft larger than properties without groceries, although retain the Target branding because their offerings are considerably more limited than SuperTarget. The company remodeled 109 stores accordingly in 2009, and renovated another 350 stores the following year. The company's decision to close their garden centers opened floorspace for PFresh expansion and larger seasonal departments beginning in 2010. Target turned 25 stores in Los Angeles into prototypes for a potential company-wide redesign in May 2016, with brighter signage, wider aisles, and the addition of Freshii, Pizza Hut, and Which Wich? as quick-service restaurants. The company announced plans to renovate roughly one-third of its stores in the next three years beginning in 2017, and introduced a two-entrance store prototype in which one would be designed for general merchandise and the other for groceries and the fulfillment of online orders.

SuperTarget


The first Target Greatland location opened in Apple Valley, Minnesota in September 1990. They were about fifty-percent larger than traditional Target stores, and pioneered company standards including an increased number of checkout lanes and price scanners, larger aisles, expanded pharmacy and photography departments, and a food court. The Target Greatland name was slowly discontinued beginning in April 2005; its locations have since been converted to stores following the PFresh format beginning in 2009.

The first SuperTarget hypermarket opened in Omaha, Nebraska in 1995, and expanded upon the Target Greatland concept with the inclusion of a full grocery department. The company further expanded their grocery assortment in 2003, and adopted the modified tagline "Eat Well. Pay Less." (in reference to their tagline "Expect More. Pay Less.") in 2004. In the early 2000s, 43 locations (of nearly 100) featured E-Trade trading stations, although they were all closed by June 2003 after E-Trade determined that "we were not able to make it into a profitable distribution channel."

When comparing itself with rival Walmart Supercenter hypermarkets, then-CEO Gregg Steinhafel opined that Walmart operates like "a grocer that happens to also sell general merchandise," where in contrast its less aggressive expansion of SuperTarget stores is indicative of their position that the grocery industry as a "high-impact, low-cost" side project. The company operates 239 SuperTarget locations as of September 2015; they each encompass an estimate of 174000 sqft.

Flexible format Target


While typical Target locations are approximately 135000 sqft, the majority of "flexible format" CityTarget stores are roughly 80000 sqft. The first stores were opened in July 2012, in Chicago, Los Angeles, and Seattle; the 160000 sqft location in Boston is the largest CityTarget, and opened in July 2015. TargetExpress stores hover around 14000 sqft to 21000 sqft; the first opened in Dinkytown near the University of Minnesota in July 2014. Products in flexible format properties are typically sold in smaller packages geared towards customers using public transportation; locations built in college communities often carry an extended home department of apartment and dormitory furnishings.

In August 2015, Target announced that it would rename its nine CityTarget and five TargetExpress stores as Target beginning that October, elaborating that "Big or small, our stores have one thing in common: They're all Target." The first flexible format stores under the unified naming scheme opened later that month in Chicago, Rosslyn, San Diego, and San Francisco. The majority of Target openings announced through 2018 are considered to be flexible format, under 50000 sqft and located in college towns and major urban areas, and are intended to capitalize on millennial business.

Headquarters and management


Target's corporate headquarters was designed by the Ryan Companies, and is located within the Nicollet Mall in Minneapolis, Minnesota. The facility includes the 14-story, 604000 sqft Target Plaza North and the 32-story, 1215000 sqft Target Plaza South. The latter building originally featured a "Target Light System" made of 3M light pipes, although was released by more energy-efficient LEDs in 2011. Target sold a third, nine-story building in the Nicollet Mall complex and moved the affected operations to Brooklyn Park, Minnesota in August 2015.

As of May 2016, corporate-level management within Target includes Brian Cornell (board chairman and CEO); Casey Carl (chief strategy and innovation officer); Timothy R. Baer (chief legal officer and corporate secretary); Stephanie Lundquist (chief human resources officer); Janna Potts (chief stores officer); Cathy R. Smith (chief financial officer); Laysha L. Ward (chief corporate social responsibility officer); John J. Mulligan (chief operating officer); Jeffrey J. Jones II (chief marketing officer); Michael E. McNamara (chief information officer); and Jackie Hourigan Rice (chief risk and compliance officer). The latter nine individuals jointly serve as executive vice presidents of the company.

Previous CEOs include Bob Ulrich, who held the position from 1994 until his retirement in 2008, and his successor Gregg Steinhafel, who was ousted from the company in May 2014 after internal turmoil originating from the failed Canadian expansion and data breach that occurred during his leadership. Having come directly from his position in PepsiCo, Cornell is the first CEO in the company to have not been promoted from within.

Logo
The first version of the Target bullseye logo featured three red rings; its debut coincided with the introduction of the store itself in 1962. It was replaced with a simplified version, consisting of a single ring and red dot in the center, in 1968. In 2004, it was reported that 96% of Americans recognized the Target bullseye logo; the company began using the logo independently of the Helvetica wordmark in 2006. The original Target Greatland and SuperTarget logos featured "Greatland" and "Super" written in a green script font; while the Target Greatland name was discontinued in 2005, the SuperTarget name was retained and the "Super" was updated with the standard Helvetica typeset in 2006.

Mascot


Target introduced its Bull Terrier mascot Bullseye, which wears a red bullseye painted around its left eye, in its advertising campaigns in 2001. A wax figure of the dog was unveiled at Madame Tussauds in New York City in October 2006, and was consequently the first animal figure displayed in the museum. Its implementation was reduced during the Great Recession when the company shifted towards advertisements that emphasized lower prices over image, although became a more commonplace element with the rebranding of the discount section "Bullseye's Playground" and installation of benches featuring a model of the dog in 2015. That year, the company rotated between three Bull Terriers to make appearances during store openings and promotional events.

Differentiation from competitors
The median age of Target customers is 40 years old, and the median annual income is approximately $64,000. 43% of the customer base have live-in children, and 58% have received a college degree. By comparison, the median age of Walmart customers is 50 years old, with a median annual income near $53,000. Target customers are "about twice as likely as Walmart shoppers to identify as liberal" in regards to their political views; 62% of its patrons support same-sex marriage, whereas 54% of Walmart shoppers oppose the concept. Target is generally perceived to be more expensive than Walmart; Steinhafel consequently shifted towards more value-based marketing with expanded grocery selections and reduced emphasis on discretionary items in 2008.

Previously, Target did not play music over the public address system in the majority of its stores, citing concerns that it would "interfere" with the "peaceful shopping experience." However, it began playing background music in CityTarget stores "to capture the [spirit] of the surrounding environment" in July 2012, and started playing music in remodeled stores beyond urban locations in 2017. The company enforces a strict no-solicitation policy on its properties, and was the subject of criticism after banning The Salvation Army from collecting donations at store entrances during the 2004 holiday season. Target became the first major retailer to stop selling tobacco products in August 1996, after it became too costly to prevent distribution to minors. Whereas Walmart sells firearms for sporting goods uses, Target does not sell firearms in any capacity; the company requested that its customers refrain from bringing firearms in-store in all jurisdictions, citing that it "creates an environment that is at odds with the family-friendly shopping and work experience we strive to create."

Sunset Boulevard construction
Construction of a controversial three-floor shopping center on Sunset Boulevard, in which Target is the developer and planned third-floor occupant, was first proposed by the company in July 2008; the site plan was later approved by the Los Angeles City Council in June 2010. Designed to be 74 ft tall, the shopping center received criticism for violating local zoning restrictions that limit construction to a maximum height of 35 ft, and for lacking an environmental impact report. Target consequently postponed the project and furnished an environmental impact report in January 2012, in which four of the seven provided alternatives accommodated the related zoning requirements. The proposal for the original building was ultimately re-approved by the Los Angeles City Council, which had reportedly encouraged the company to construct the larger facility to increase foot traffic in the city; construction began later in 2012.

In August 2014, a judge from the Los Angeles County Superior Court revoked building permits for the shopping center and ordered that construction be delayed indefinitely in response to a lawsuit filed against Target by the La Mirada Avenue Neighborhood Association that March, in which continued concern over the height of the building was expressed. At the time of the revocation, however, the outer framing of the facility had already been completed, with the Target itself anticipated to open within the next year. The association requested that the unfinished building be torn down and replaced with a smaller property, although Target appealed the ruling and called for the city to adjust its zoning laws to accommodate the half-finished development. The original ruling to cease construction of the center was overturned by the Los Angeles City Council in May 2016.

Animal welfare concerns
In November 2011, the non-profit organization Mercy for Animals released hidden camera footage of animal abuse occurring at Sparboe Farms, a substantial egg supplier to companies including Target and McDonald's. Both companies severed partnerships with Sparboe that month in the wake of the ensuing controversy; Target pulled products with Sparboe branding or affiliation from distribution in SuperTarget locations. In January 2016, Target announced that it would be sourcing eggs from entirely cage-free producers by 2025.

"Bathroom policy" and boycott
In response to the Public Facilities Privacy & Security Act signed into law in North Carolina, Target stated that it would allow transgender individuals access to the restroom and fitting room facilities "that correspond with their gender identity" in April 2016. Rachel Abrams from The New York Times described the reaction as "the most prominent position taken by a national retailer" regarding the growing attention surrounding "bathroom bills" and transgender rights. With concern that "Target should not allow men to enter the women’s restrooms and dressing rooms" and that the policy is "exactly how sexual predators get access to their victims," the conservative American Family Association launched a nationwide boycott of the company; it has received over 1.2 million pledges as of May 14.

The market research firm YouGov reported that in the two weeks following the policy's announcement, customer's purchase consideration for the company decreased from 42% to 38% and overall "buzz score" dropped from 19 to 11. During an appearance on Squawk Box on May 11, Cornell reaffirmed that "we took a stance, and we're going to continue to embrace our belief of diversity and inclusion and just how important that is to our company," although stated that the company would install third family restrooms in locations that did not already include one. That August, the company acknowledged that the policy had generated mixed reactions amongst consumers, although claimed that "the impact to the business is not material at this time" and that the addition of single-stall restrooms would cost the company approximately $20 million.