History of Target Corporation
The history of Target Corporation, an American general merchandise retailer, first began in 1902 by George Dayton. 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 opend 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. In 2000, the Dayton-Hudson Corporation was renamed to Target Corporation.
1902–1961: Dayton Company
The Westminster Presbyterian Church in downtown Minneapolis burned down during the Panic of 1893; the church was looking for revenue because insurance would not cover the cost of a new building. Its congregation appealed to George Dayton, an active parishioner, to purchase the empty corner lot adjacent to the original church so it could be rebuilt; he eventually constructed a six-story building on the newly purchased property. Looking for tenants, Dayton convinced the Reuben Simon Goodfellow Company to move its nearby Goodfellows department store into the newly erected building in 1902. However, its owner retired altogether and sold his interest in the store to Dayton. The store was renamed the Dayton Dry Goods Company in 1903 and was shortened to the Dayton Company in 1910. Having maintained connections as a banker yet lacking previous retail experience, Dayton operated the company as a family enterprise over which he held tight control and enforced strict Presbyterian guidelines. Consequently, the store forbade the selling of alcohol, refused to advertise in newspapers that sponsored liquor ads, and would not allow any business activity on Sundays. In 1918, Dayton, who donated most of his money to charity, founded the Dayton Foundation with $1 million.By the 1920s, the Dayton Company was a multimillion-dollar business that had filled the entire six-story building. Dayton began transferring parts of the business to his son Nelson after an earlier son, David, died at age 43 in 1923. The company made its first expansion with the acquisition of the Minneapolis-based jeweler J.B. Hudson & Son right before the Wall Street Crash of 1929; its jewelry store operated in a net loss during the Great Depression, but its department store weathered the economic crisis. Dayton died in 1938 and was succeeded by his son Nelson as the president of the $14 million business, who maintained the strict Presbyterian guidelines and conservative management style of his father. Throughout World War II, Nelson Dayton's managers focused on keeping the store stocked, which led to an increase in revenue. When the War Production Board initiated its scrap metal drives, Dayton donated the electric sign on the department store to the local scrap metal heap. In 1944, it offered its workers retirement benefits, becoming one of the first stores in the United States to do so, and began offering a comprehensive health insurance policy in 1950. In 1946, the business started contributing 5% of its taxable income to the Dayton Foundation.
Nelson Dayton was replaced as president by his son Donald after Nelson died in 1950; he ran the company alongside four of his cousins instead of under a single person and replaced the Presbyterian guidelines with a more secular approach. It began selling alcohol and operating on Sundays and favored a more radical, aggressive, innovative, costly, and expansive management style. The company acquired the Portland, Oregon–based Lipman's department store company during the 1950s and operated it as a separate division. In 1956, the Dayton Company opened Southdale Center, a two-level shopping center in the Minneapolis suburb of Edina. Because there were only 113 good shopping days in a year in Minneapolis, the architect built the mall under a cover, making it the world's first fully enclosed shopping mall. The Dayton Company became a retail chain with the opening of its second department store in Southdale.
1962–1975: Founding of Target
While working for the Dayton company, John F. Geisse developed the concept of upscale discount retailing. On May 1, 1962, the Dayton Company, using Geisse's concepts, opened its first Target discount store, located at 1515 West County Road B in Roseville, a suburb of Saint Paul, Minnesota, located on the site of an uncompleted Jubilee City department store. The name "Target" originated from Dayton's publicity director, Stewart K. Widdess, and was intended to prevent consumers from associating the new discount store chain with the department store. Douglas Dayton served as the first president of Target. The new subsidiary ended its first year with four units, all in Minnesota. Target Stores lost money in its initial years but reported its first gain in 1965, with sales reaching $39 million, allowing a fifth store to open in the Minneapolis suburb of Bloomington. By 1964, Dayton's was the country's second-largest privately owned department store chain.In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain as a Dayton Company subsidiary. Target Stores expanded outside of Minnesota by opening two stores in Denver, and sales exceeded $60 million. The first of these two stores was built in 1966 in Glendale, Colorado, part of the Denver Metropolitan area. The store was upgraded to a SuperTarget in 2003 and is still open. The next year, the Dayton holdings were reorganized as Dayton Corporation, and it went public with its first offering of common stock. It opened two more Target stores in Minnesota, resulting in nine units. It acquired the San Francisco–based jeweler Shreve & Co., which it merged with previously acquired J.B. Hudson & Son to form Dayton Jewelers.
In 1968, Target updated its bullseye logo, opting for a more modern look, and expanded into St. Louis, Missouri, with two new stores. Target's president, Douglas J. Dayton, returned to the parent Dayton Corporation and was succeeded by William A. Hodder. Senior vice-president and founder John Geisse left the company. Geisse was later hired by St. Louis–based May Department Stores, where he founded the Venture Stores chain. Target Stores ended the year with eleven units and $130 million in sales. It acquired the Los Angeles–based Pickwick Book Shops and merged it into B. Dalton Bookseller.
In 1969, the company acquired the Boston-based Lechmere electronics and appliances chain, which operated in New England, as well as the Philadelphia-based jewelry chain J.E. Caldwell. It expanded Target Stores into Texas and Oklahoma with six new units and built its first distribution center in Fridley, Minnesota. The Dayton Company merged with the Detroit-based J.L. Hudson Company that year to become the Dayton-Hudson Corporation, the 14th largest retailer in the United States, consisting of Target and five major department store chains: Dayton's; Diamond's of Phoenix, Arizona; Hudson's; John A. Brown of Oklahoma City, Oklahoma; and Lipman's. The company offered Dayton-Hudson stock on the New York Stock Exchange. The Dayton Foundation changed its name to the Dayton Hudson Foundation, and Dayton-Hudson continued its practice of donating 5% of its taxable income to the foundation.
In 1970, Target Stores added seven new units, including two units in Wisconsin, and the twenty-four-unit chain reached $200 million in sales. Dayton-Hudson said at the time that they could forecast their discount-store operations overshadowing their department store revenue in the near future. Dayton-Hudson acquired the Team Electronics specialty chain, which was headed by Stephen L. Pistner. It subsequently acquired the Chicago-based jeweler C.D. Peacock, Inc., and the San Diego–based jeweler J. Jessop and Sons. Also in 1970, Dayton-Hudson purchased Ronzone's in Las Vegas, Nevada, converting it into a Diamond's store. In January 1970, Dayton-Hudson announced they would be one of the tenants of the IDS Center, the first modern-era skyscraper built in Minneapolis, Minnesota. The location would serve as their headquarters until 2000. In 1971, Dayton-Hudson acquired sixteen stores from the Arlan's department store chain in Colorado, Iowa, and Oklahoma. Two of those units reopened as Target stores that year. Also that year, Dayton-Hudson's sales across all its chains surpassed $1 billion. In 1972, the other fourteen units from Arlan's acquisition were reopened as Target stores, bringing the total number of units to forty-six. As a result of its rapid expansion and the top executives' lack of experience in discount retailing, the chain reported its first decrease in profits since its initial years, and Dayton-Hudson considered selling off the Target Stores subsidiary. The chain's loss in operational revenue was due to overstocking and carrying goods over multiple years, regardless of inventory and storage costs. Dayton-Hudson acquired two Twin Cities mail-order firms, Sibley and Consolidated Merchandising, that same year. In 1973, Stephen Pistner, who had already revived Team Electronics and would later work for Montgomery Ward and Ames, was named chief executive officer of Target Stores, and Kenneth A. Macke was named Target Stores' senior vice-president. The new management marked down merchandise to clear out its overstock and allowed only one new unit to open that year.
1975–1981: Early prosperity
In 1975, Target opened two stores, reaching 49 units in nine states and $511 million in sales. That year, the Target discount chain became Dayton-Hudson's top revenue producer. In 1976, Dayton-Hudson was the eighth largest retailer in the U.S., and Target opened four new units and reached $600 million in sales. Macke was promoted to president and chief executive officer of Target Stores. Inspired by the Dayton Hudson Foundation, the Minneapolis Chamber of Commerce started the 5% Club, which honored companies that donated 5% of their taxable incomes to charities. In 1977, Target Stores opened seven new units and Stephen Pistner became president of Dayton-Hudson, with Macke succeeding him as chairman and chief executive officer of Target Stores. The senior vice president of Dayton-Hudson, Bruce G. Allbright, moved to Target Stores and succeeded Kenneth Macke as president. In 1978, the company acquired Mervyn's and became the 7th largest general merchandise retailer in the United States. Target Stores opened eight new stores that year, including its first shopping mall anchor store in Grand Forks, North Dakota. In 1979, it opened 13 new units to a total of 80 Target stores in eleven states. Dayton-Hudson reached $3 billion in sales, with $1.12 billion coming from the Target store chain alone.Dayton-Hudson sold its nine owned shopping centers in 1978 to Equitable Life Assurance Company, including the 5 owned in Michigan, and the 4 "Dales" shopping centers they developed and owned in Minnesota. In 1980, Dayton-Hudson sold its Lipman's department store chain of six units to Marshall Field's, which rebranded the stores as Frederick & Nelson. That year, Target Stores opened seventeen new units, including expansions into Tennessee and Kansas. It acquired the Ayr-Way discount retail chain of 40 stores and one distribution center from Indianapolis-based L.S. Ayres & Company. In 1981, Dayton-Hudson sold its interest in four regional shopping centers to Equitable Life Assurance Company. Also in 1981, it reopened the stores acquired in the Ayr-Way acquisition as Target stores. Stephen Pistner left the parent company to join Montgomery Ward, and Kenneth Macke succeeded him as president of Dayton-Hudson. Floyd Hall succeeded Kenneth Macke as chairman and chief executive officer of Target Stores. Bruce Allbright left the company to work for Woolworth, where he was named chairman and chief executive officer of Woolco. Bob Ulrich became president and chief executive officer of Diamond's Department Stores. In addition to the Ayr-Way acquisition, Target Stores expanded by opening fourteen new units and a third distribution center in Little Rock, Arkansas, to a total of 151 units and $2.05 billion in sales.