Target slims down
Target, the #2 discount department store chain, and the only one that has been able to keep at all competitive with the Wal-Mart juggernaut, recently sold off two major assets that were dragging it down. The Minnesota-based company, formerly Dayton-Hudson, has managed to sell of two discount chains that it had been trying for years to turn around. That leaves Target with its own-name stores, which were making up over 85% of its income and most of its profits. Target is the #23 company in the Fortune 500.
In June, Target sold off its 62-store Marshall Field's chain to May Department Stores for $3.2 billion. May operates as an upscale, higher-cost department store company. It owns over 500 stores, under names such as Filene's, Lord & Taylor, Hecht's, Foley's, and others. Its main competitor, the segment leader, is Federated Department Stores, which owns Macy's and Bloomingdale's, among other chains.
In July, Target announced an agreement to sell off the 257-store Mervyns discount chain to a consortium of investment banks for $1.65 billion. It also sold its receivables form credit-cards to GE Finance. It is considered that Mervyn's may be more valuable for its real estate than its stores.
Target is realizing that its best strategy to counter Wal-Mart is to concentrate on its own brand. It has found a niche slightly more upscale than Wal-Mart's. With Wal-Mart getting lots of bad publicity, Target positions its over 1,000 stores as a slightly more creditable alternative.
11:55:12 AM 
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