Showing posts with label Minneapolis. Show all posts
Showing posts with label Minneapolis. Show all posts

Wednesday, May 2, 2012

May 1, 1962 - The First Target Opens

Once again, another legendary retailer celebrates their golden anniversary. It’s none other than Target, “the upscale discounter”, which officially launched 50 years ago today yesterday. Pictured above is the very first Target store, located in Roseville, Minnesota, a suburb just north of the Twin Cities. From this humble beginning came one of today’s most successful and influential retailers, and one of the world’s most iconic brands.   
As mentioned ad nauseam on this site and in many other quarters, Target’s founding year, 1962, was the year of the discount store revolution. Walmart and Kmart, the industry’s other two key players, were also founded that year, as were a number of others, including Woolworth’s long-departed Woolco division and Big K, a southeastern chain that was eventually acquired by Walmart.
These chains and their coincidental founding year were all mentioned in our previous observance of Kmart's 50th a couple of months back,  but no sooner were the pixels dry on that post (Don’t you just hate expressions like that?) than I recalled some others that trace their origin to 1962 – Shopko, a Green Bay Wisconsin-based chain, still exists. Sky City, based in Asheville, North Carolina with locations throughout the Southeast, unfortunately no longer does. I’ll probably think of some more within minutes after posting this.
Target differs in a fundamental way from Walmart and Kmart, its two key competitors over the last 30 years or so (and for the foreseeable future), and this difference can be traced back to the companies’ roots. “Kmart was founded by a dime store company (S.S.Kresge) and Wal-Mart was a variety store company (Sam Walton’s Ben Franklin franchises),” said former Target executive Norm McMillan to Laura Rowley, author of On Target, an entertainingly written history of the company, while “The background of the Target enterprise was the department store business – so that influenced our strategic planning and the way stores were run.”
Indeed, The Dayton Company, founded in Minneapolis in 1902, had long been considered one of America’s best run department store firms. So well run, in fact, that they found themselves having to fend off a good deal of flak from their prestigious department store cohorts about their decision to go slumming in the discount world. Rowley quotes Target president Douglas Dayton in a 1966 speech to the Associated Merchandising Corporation: “I start with the assumption that all of you …wish that discount stores had never been invented, and I have no quarrel with that wish. It is a perfectly natural one. The catch is that it doesn’t seem to have impaired discount stores’ progress one iota…To some I may be laboring the point; to others - and I have to be perfectly frank - you have underestimated what is going on.” (This would have made a nice extra verse for Dylan’s “The Times They Are a-Changin'”, don’t you think? Just need to come up with a good quadruple rhyme.) A major change in consumer buying patterns was afoot, and Dayton bravely chose to jump into the fray.
Generally conservative, the Dayton Company could nonetheless claim a pretty bold move in their recent history. In 1954, they developed the nation’s first enclosed mall, Southdale Shopping Center, in Edina, a southwest suburb of Minneapolis. Dayton took the then-unusual step of inviting a key department store rival, Donaldson’s, to join the project. They engaged Victor Gruen, an Austrian-born architect with visions of the mall as a ‘civilizing force for the sprawling suburbs’, to design the center. Southdale jump-started Gruen’s career as an architect of unparalleled influence over the ensuing decade. For Dayton, it proved to be a financial winner and an anchor for their suburban “branch store” strategy.
In one sense, however, the concept of the discount store was really just an update of a time-honored department store tradition – the “basement store”, usually a basement or sub-level of a downtown flagship store reserved for bargain and closeout merchandise. Dayton’s had one in their Nicollet Avenue home base, as did many well-known department store operators across the country. While bargain hunting has been a great American pursuit for eons, in decades past there was often a certain stigma (unfairly) conferred upon those who consistently shopped “downstairs”, whether out of need or preference, instead of on the main floor. The discount stores, having no “upstairs” per se, erased this stigma, and their suburban locations put them closer to the fastest-growing base of customers. 
After some months of fact-finding “undercover missions” to discount store chains across the country by Dayton managers (Topps in Chicago, on a growth tear at the time, was one they particularly liked), the first Target store opened on May 1 in Roseville. It was a 68,000 square foot store with a surprisingly large grocery department -25,000 sq. ft., leased out to Applebaum’s Food Market of St. Paul. (Somewhere I remember seeing a photo of a very cool-looking ice cream carton with the original Target “bullseye” logo on it. Hopefully I’ll come across it again one of these days.)  
According to Rowley, the general merchandise mix was 65 percent hardlines (“auto supplies and appliances”) and 35 percent softlines (“clothing and accessories”).  Roseville was the first of four units launched that year – three in the greater Twin Cities area (Crystal and Knollwood/St. Louis Park being the others) and one a bit further north in Duluth. This 1965 photo of the Duluth store shows just how quickly the chain’s architectural style evolved from the very modest design of the first Target.  
Throughout the balance of the 1960’s, growth was “steady and methodical” when compared to Kmart at least, who were burning up the countryside with some 35 new stores a year at the time.  Three years passed before the opening of the next Target in Bloomington, Minnesota in 1965. The next year, 1966, saw Target’s first expansion market, Denver (Glendale and Westland Centers), followed by two more on the home turf, Fridley and West St. Paul, Minnesota in 1967. In 1968, Target expanded into St. Louis with North and South County stores. A third store was added in Bridgeton the next year. The close of the decade saw Target stores in Dallas (North Dallas and Garland, with a Village Fair location added in 1970) and Houston (Hedwig Village and South Loop, with Sharpstown added in 1970), along with a unit in Colorado Springs. 
One probable reason for the measured approach was the simple fact that Dayton had a lot of things on their plate in the late 60’s, putting it mildly. In 1969, Dayton bought out the Detroit-based J.L. Hudson Company, “the nation’s largest independently owned department store operation”, as their 1968 annual report put it. Now called Dayton-Hudson Corporation, and with more than double the department store operations as before, the acquisitions didn’t stop there. That same year they picked up Lechmere, a Boston-based electronic and appliance retailer, whose operations were lumped in with Target’s as part of D-H’s “Low-Margin Division.”  These moves coincided with a major expansion of Dayton’s bookstore operations, which were launched in 1966. Bruce Dayton, the company president, decided to name the company’s bookstores after himself, substituting one letter in the last name, of course – “B. Dalton Booksellers”, a mainstay of shopping malls for decades.    
Whether or not it was a deliberate part of the strategy, there was certainly an added benefit to the slower rollout of the Target stores. It enabled Dayton-Hudson to hone Target’s upscale image – the key differentiator that led to the furious post 1980-growth and high repute the company enjoys today - over time. Their faux French nickname, “Tar-zhay”, surfaced almost right off the bat, according to Douglas Dayton, Target’s original division president, who told author Laura Rowley he first heard customers using the word at the Duluth store way back in 1962. For a time, they even used “Miss Target” (actually pronounced “Miss Tar-zhay”!) for their private label line of women’s shoes.  
Eventually a stronger graphic image was needed, and for that Target reached out to Unimark International, the legendary Chicago-based design firm responsible for some of the most enduring corporate identities in business history, including those of American Airlines and Ford Motor Company. (And one that many of us wish had endured - the 1971-2011 JCPenney logo.) It’s hard to overstate Unimark’s effect on the world of corporate design, especially in the late 60’s and early 70’s, when the world seemed to change overnight from a graphical stone soup to solid-color backgrounds and Helvetica.  
In 1969, the new logo was introduced -a single, thicker ring around the bullseye replaced the double-ringed earlier versions, and Helvetica supplanted the multiplicity of fonts Target previously used. Another very significant Unimark contribution was the widespread use of the color red, which all these years later, Target virtually “owns” from a retail standpoint.  
Gotta love those red plastic shopping carts, right? And the “Target Lady”. And those retro products (like cereals and detergent) they keep featuring. Here’s to another 50 years!   
The photo above is from the fascinating book UNIMARK INTERNATIONAL – The Design of Business and the Business of Design by Jan Conradi and appears here through the courtesy of Kevin Rau, the book’s designer and archivist of the stunning collection of artifacts that illustrate the book. This book is essential for design fans and is an incredible business history as well. Forget Mad Men, this was the real thing! (Ok, don’t forget Mad Men. Sorry for even bringing that up.) Kevin has his own design firm, Rauhaus, based in Oshkosh, Wisconsin, where he specializes in corporate identity, publication design and wonderful printed work using classic letterpress technology.
Thanks also to Michael Doty for the tip on the great circa-1970 Target commercials below. Note the combination of the new Target logo with some of the “hodgepodge” mentioned above. Fun stuff!

Thursday, June 24, 2010

Wards Strikes Up the Band

The weather couldn’t have been better on this sunny, sparkling Southern California afternoon. Excitement was in the air as the crowds gathered in. A speakers’ platform was in place, replete with the American flag and a group of men in suits, ties, carnations and broad smiles, beginning to take their seats near the dais. Soon the customary civic welcomes and corporate pledges would take place. And there would be special entertainment that day - the Disneyland Band was there! The whole unit, looking sharp in their bright orange uniforms, on a rare five-mile trek outside the gates of the Happiest Place on Earth. The real star of the show was the brand new Montgomery Ward store behind the stage – sporting a smart, modern look with a textured façade, three-toned sign and zig-zag awning. For a few hours that afternoon, it had to be the happiest store on earth. The date was August 11, 1960, and the place was the Honer Plaza Shopping Center, located at the corner of 17th and Bristol, in Santa Ana, California.

The opening of this store marked the five-year point of a complete reinvention of Wards’ image, which began with the forced resignation of longtime company chairman Sewell Avery. Cash-rich but moribund from a retail standpoint in 1955, the company’s leadership change became evident to the buying public two years later when Wards, whose store base had long consisted of aging urban and rural downtown units, began to open large, modern stores in the country’s storied suburban shopping centers.

Driving this expansion was Montgomery Ward chairman John Andrew Barr, who took the company reins after Avery’s ouster. Barr, a 20-plus year Wards veteran, came up through the ranks of the company’s legal department and was a rare individual in that he was neither fired nor driven away by Avery’s dictatorial manner, in a company notorious for massive turnover of upper management ranks. Author Booton Herndon, in his lively book “Satisfaction Guaranteed”, a 1972 history (and then-current portrait) of Wards, notes that company executives in the bad years seemed to profess a certain pride in the dubious honor that Wards had “trained” many of their competitors’ top people.

By any measure, Wards’ new store program was ambitious – according to a November 1960 Fortune magazine article, five new stores were opened in 1958, twelve more in 1959 and twenty-one more in 1960, mostly large, shopping center-based units. The article also sheds light on Wards’ store location strategy, which centered on locating stores in clusters within a specific market area, in order to be able to service the stores from centrally-located distribution centers (with the important additional benefit of maximizing the effectiveness of TV and newspaper advertising).

The market areas cited in the Fortune article were: “Detroit, Kansas City, San Francisco, San Diego, Phoenix, St.Petersburg-Tampa, Houston (and) Dallas-Fort Worth”. A carefully-selected set of markets that left many regions untouched, to be sure, but fleeing time and limited resources forced Wards to pick their targets carefully. Noticeably missing from this list is Wards’ home market of Chicago, where instead of opening new stores, Barr opted for an acquisition instead – In 1957, Montgomery Ward bought out The Fair, an old-line department store chain with a downtown State Street flagship and three suburban locations. Nonetheless, those fortunate enough to live in one of Wards’ chosen expansion areas were likely thrilled to have the gleaming new stores as a shopping option.

Five years of the “New Wards Era” and nearly three years of new store openings brought things to that August 1960 opening at Honer Plaza, where the light atmosphere became very heavy, for a while at least. The previous night, at a dinner held in Santa Ana for Wards stockholders and other dignitaries, Chairman Barr dropped a bomb. He announced, as Fortune later put it, “that the earnings prospects for the full fiscal year 1960 (to the end of January, 1961) were for a new low in the company’s postwar history”. The herculean effort, the new attitude and image, the beautiful new stores all appeared not to be paying off. (At this point in the evening, I would have said “Allriiiiight, waddaya say we bring the Disneyland Band out here? C’mon, everybody dance!! But that’s just me.)

To his credit, Barr had long realized the need for an infusion of top retail talent into Wards’ decimated ranks. For some odd, unexplained reason, the company’s board of directors had forbidden Barr to look to the one place that matched Wards’ business most closely – Sears, Roebuck and Company. (Although J.C. Penney had already surpassed Wards in sales by 1961, it would be a few more years before their business model fully lined up with Wards’, as Penney yet had no catalog operation and still sold mostly soft goods in their stores. By late 1963, Penney was in the catalog business as well and had also begun to open full line stores, complete with appliance sales and auto centers.) The Honer Plaza news was enough to get the Wards board to drop the needless restriction, though, so to Sears’ executives, current and former, Barr went a-calling.

Amidst all of this, rumors of a merger began to fly. In the fall of 1961, news accounts began to carry the story of a marriage between Montgomery Ward and Interstate Department Stores, Inc. as having all the earmarks of a done deal. Interstate, headed by Sol Cantor, was white-hot at the time - a formerly staid department store operator that was scoring big with newly-acquired discount chains on both coasts – White Front in Southern California and Topps in the East and more recently, Chicago. As quickly as it came about, however, talk of a Wards/Interstate merger fizzled. One reason for this, as Time magazine related after the fact, was that Cantor was miffed at being left out of the selection process of Wards’ new president.

In early November 1961, Barr announced he had chosen Robert E. “Tom” Brooker, a former Sears executive and since 1958, chairman of Whirlpool, the appliance manufacturing giant. Brooker, a one-time protégé (and according to author Herndon, bridge-playing partner) of legendary Sears head General Robert E. Wood, had been Sears’ vice president of manufacturing. This position didn’t even exist at Wards, marking a key difference between the two companies. Sears routinely held large investment stakes in their manufacturing suppliers as a means of implementing changes they desired, or shoring up weak operations. Oftentimes Sears would keep majority ownership of a manufacturer for years on end. (A popular business topic of modern times concerns the power that a certain well-known mass retailer wields over its manufacturing suppliers. In my opinion, Sears’ power back in the day was every bit as great, if not more so.) The Whirlpool Corporation, as it existed at the time, was largely the result of mergers engineered by Brooker from behind his desk at Sears. Montgomery Ward, by comparison, very rarely took an ownership stake in their suppliers.

Beyond Brooker’s years of high-level experience with Sears and his peerless ability to deal with suppliers, he projected an air of exceptional confidence that would prove essential to Wards’ survival. Indeed, immediately upon taking office, Brooker purchased a million dollars’ worth of Montgomery Ward stock, making him the company’s largest individual shareholder. Brooker accepted the Montgomery Ward presidency with the understanding that he would be in charge, and that was the case almost immediately, although initial press reports, including Time magazine’s, characterized the relationship between Brooker and chairman Barr as “on a par”. John Barr would stay on as Montgomery Ward chairman until 1965, when he resigned to take the reins of Northwestern University’s business school. There, Barr made the controversial decision to close down Northwestern’s undergraduate business program in order to focus the school’s resources on their graduate business school, which he also opened to women for the first time in its history. Under Barr’s tenure, the program (now called the Kellogg School of Management) became one of the most prestigious in its category, a distinction it continues to enjoy today.

Tom Brooker, of course, had his hands full keeping Wards on the road to recovery. To aid in the battle, he wooed a number of key people from Sears, none more important that Edward S. Donnell, who ran Sears’ Los Angeles territory, their hottest market area by a wide margin. Donnell, who himself had a reasonable shot at reaching Sears’ "mahogany row" within a few years was convinced by Brooker’s enthusiasm to forsake the ideal climes of SoCal and move to Baltimore to run Wards’ entire East Coast region. Within a couple of years, Donnell moved to Chicago, promoted to the number-two spot in the company. More Sears faces would appear at Montgomery Ward headquarters over the next several years. The aggressive building program would continue, with the sails trimmed back just a bit.

Would things get better for Wards? Yes, they would. But there would be times when they probably wished the Disneyland Band was waiting in the wings.

The pictures are Montgomery Ward publicity photos unless otherwise noted. The first store pictured was located in San Antonio, Texas, at the Wonderland Shopping Center (not to be confused with the Livonia, MI-based mall of the same name), and opened in 1963. Known in recent years as “Crossroads Mall”, it reverted to the Wonderland name earlier this year. Second up the Wards store at Houston’s Northline Shopping Center, which opened in 1960 and predated the mall itself by a couple of years. Third, a 1961 American Olean tile advertising photo which only identifies the store as a “Houston, Texas location”, which I believe to be the free-standing unit that was located across the street from the Palm Center shopping complex. Fourth, from 1962 and again from San Antonio, the new McCreless Shopping Center, complete with Photoshopped cars in the parking lot. (Wait, we‘re talking about 1962, right? I should have said “pasted-up cars” instead.) Fifth, from a 1963 Plexiglas ad, the famous Apache Plaza location, St. Anthony Village (Minneapolis), Minnesota. Lastly, the Honer Plaza location as it appeared on that exciting/exasperating 1960 summer day.

Sunday, September 14, 2008

Zayre's Fabulous Department Stores

After a slow, careful period of initial growth through the end of the 1950’s, Zayre Corp., as it was now known, began to expand rapidly. Only six Zayre stores were in operation in 1959, the approximate year that Zayre’s volume reached that of the Bell Shops/Nugents stores. By 1962, there were 27 Zayres open, with ten to twenty new ones added annually for many years afterward. That same year, Zayre Corp. became a public company. Headquarters remained in Natick, Massachusetts, moving later in the decade to nearby Framingham.

Zayre set its sights on a much larger market area than that of some Northeastern contemporaries, including Bradlees (owned by Stop & Shop, who would expand outside the Northeast much later on) and Two Guys (owned by Vornado, who would add some West Coast stores in the late 60’s). Starting in 1960, the company embarked on a program to open stores in major markets all across the eastern half of the U.S., with a presence in nearly every state east of the Mississippi by the middle of the decade.

Wisely, they tended to open the stores in clusters, so as to maximize brand presence and advertising efficiency. By the end of 1966, Zayre had 92 stores total (not counting the specialty stores) with major concentrations in greater Chicago (9 stores), Miami (10 stores) and their home turf of Boston (13 stores). Medium-sized Zayre markets at the time included Washington DC (5 stores), Pittsburgh (4 stores) Atlanta, Cleveland and Columbus (3 stores each), Jacksonville, Tampa and Providence, R.I. (2 stores each).

Some of this growth came through acquisition. When Toronto-based Towers Marts, a chain with discount store locations from Ontario to Florida went bankrupt in 1963, Zayre picked up four of their Washington DC area locations – Silver Spring and Wheaton, Maryland and Falls Church and Alexandria, Virginia. Consumers Mart of America (CMA), a no-frills superstore chain with a smattering of locations around the country, was another early discounting casualty, and Zayre announced in March 1965 it would be taking over three Chicago locations (Ashland Ave., Oak Lawn and Palatine) and a couple of units in Florida. In December 1966, Zayre bought out Duluth, Minnesota-based Northern Enterprises, Inc., owner of four Shoppers City stores located in Duluth, St. Paul and Minneapolis. Interestingly (unlike previous acquisitions), Zayre retained the Shoppers City name for these stores.

In Zayre’s early years, their product mix leaned heavily towards soft lines (mainly clothing) due to the Feldbergs wealth of experience in fashion, gained through years of operating the Bell Shops/Nugents stores. As the sixties progressed, Zayre’s product offering resembled that of a more typical discount store, with toys, sporting goods, photographic, records, books, health and beauty products and much more added to the mix. A number of these departments were leased out to concessionaires during Zayre’s first decade, including linens, greeting cards, candy and health and beauty items among others, totaling nearly a third of Zayre’s store revenues. In the mid-60’s, Zayre bought out a good number of these firms, leaving only a handful of departments (accounting for only 12-13% of sales) as leased operations. Zayre was far from the only discounter to actively buy out their lessees at that time – Kmart, Vornado and several others did the same.

In describing Zayre’s stores, a 1966 Barron’s article put it succinctly – “The typical Zayre discount store is about 70,000 square feet and air-conditioned. All outlets are on well-traveled roads with ample parking space. While the stores are pleasant and neat, no attempt is made to create a high-fashion image”. The company itself put a slightly more upscale spin on things in their advertising, which in my opinion was a cut above average discount house ads, even if the stores weren’t necessarily so. For many years, the tagline “Fabulous Department Stores” appeared alongside the chain’s name in their ads. Fabulous confidence at the very least!

The photos above are circa 1963. The locations are unknown save for the last two photos – the TV/Hi-Fi department is from the Monroeville, Pennsylvania store and the night exterior (depicting a free concert on the front sidewalk) is the Beverly, Massachusetts location.

Saturday, December 8, 2007

An Early Target, 1966

The hard Northern winter shows on the faces of these Target shoppers in this 1966 photo. The Target story began in 1962 when the Dayton Company, a venerable 60-year old Minneapolis-based department store chain, decided to capitalize on the discounting trend by setting up its own discount division. At the time, the company had five full line Dayton’s department stores in Minnesota, including their downtown Minneapolis flagship, plus Fantle’s department store in Sioux Falls, South Dakota, which Dayton had bought out in 1954. By 1962, they had also developed some notable shopping center properties, including the well-known Southdale Shopping Center in Edina and the more recent Brookdale Shopping Center in Brooklyn Center, both Twin Cities suburbs.

The early years of Target appear in retrospect to be marked by fairly slow, cautious growth, especially when compared with the chain’s remarkable expansion in the last few decades. Starting with four stores in 1962 – Duluth, Roseville, Crystal and St. Louis Park, they added a fifth Minnesota store in Bloomington in 1965. The first two stores outside of Dayton’s home state were opened in Denver in 1966.

I think it’s safe to say that during those early years (and for some time afterward) Dayton hadn’t the slightest hint that Target would ultimately become the company’s bread and butter, to say nothing of its future profound influence on mass retailing in general. Remarkably, for many years the Target operation would officially be known within Dayton (and later Dayton-Hudson) as the “Low-Margin Division”, I kid you not. Definitely this was an unglamorous name for a chain that would later become synonymous with affordable chic.

Now, of course, the entire company is known as Target Corporation. The Dayton’s stores (and their erstwhile stepsiblings Hudson’s and Marshall Field’s) were sold off to The May Company a few years back, and then to Federated, where the familiar Macy’s logo with its famous red star now reigns on the former D-H stores.

The checkstands in this photo sport the original Target logo. A year later, in 1967, Target would revamp its logo with thicker rings and a filled-in bullseye, creating an enduring retail icon.