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Aiming at the Bull’s-Eye: Target Move Signals New Strategy in Retail

Some see Target Corp.’s decision to sell its Marshall Field’s and Mervyn’s units as a sign that the era of retail conglomerates is coming...

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“Target Corp. has not dedicated capital to maintaining the infrastructure of the buildings for years,” said Hurwitz. “They will need substantial renovations — at least a facelift and an updated look — for any potential buyer.”

Ilse Metchek, executive director of the California Fashion Association, pointed out that most of Mervyn’s stores in California were those of the now-defunct Broadway chain. “The history of those spots is not great wherever they are,” she said. Metchek also believes that Mervyn’s is representative of a dying niche. “In the early Seventies and Eighties, pre Wal-Mart or Target, they introduced low-priced branded merchandise and that was a big thing,” she said. “But now whoever is in that moderate niche is having a hell of a time and it’s not just Mervyn’s,” she said, noting competitor Robinsons-May is also having trouble. “Who would want them? Who thinks they could do it better?”

— With contributions from Vicki M. Young and Dan Burrows, New York; Kristin Young, Los Angeles and Katherine Bowers, Boston

Snapshot
Mervyn's
 
2003
2002
Change
Same store sales
Revenues
3,553
3,816
-6.9%
-7.6%
Operating Profit
160
238
-32.8%
STORES
California
126
Utah
8
 
Texas
42
Oregon
7
 
Washington
14
Louisiana
6
 
Arizona
15
Nevada
6
 
Michigan
15
Oklahoma
3
 
Minnesota
9
New Mexico
3
 
Colorado
11
Idaho
1
 
Total
266
 
 
Marshall Field's
 
2003
2002
Change
Same store sales
Revenues
2,584
2,691
4.0%
-2.6%
Operating Profit
107
135
-20.7%
STORES
Michigan
21
Ohio
1
Illinois
17
North Dakota
3
Minnesota
12
Indiana
2
Wisconsin
5
South Dakota
1
Total
62
   
Figures in Millions, Except Store Counts. Source: Company Reports
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