The history of Target Corporation, an American general merchandise retailer, began in 1902 with 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 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. In 2000, the Dayton-Hudson Corporation was renamed Target Corporation.
1902–1961: Dayton Company
The Westminster Presbyterian Church in downtown Minneapolis was 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 its name 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 filled the entire six-story building. Dayton began transferring parts of the business to his son Nelson after his other 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 at a net loss during the Great Depression, but its department store weathered the economic crisis. Dayton died in 1938 and was succeeded as president of the $14 million business by his son Nelson, who maintained his father's strict Presbyterian guidelines and conservative management style. 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 department store's electric sign to the local scrap metal heap. In 1944, the company 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.
Following Nelson Dayton's death in 1950, his son Donald took over as president. 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. The company began selling alcohol, operating on Sundays, and favoring a more radical, aggressive, innovative, costly, and expansive management style. The company acquired the Portland, Oregon–based Lipman's department store in 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 outdoor shopping days 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."Target Chief Says Company Will Expand", Minneapolis Tribune, October 14, 1965, page 17. By 1964, Dayton's was the country's second-largest privately owned department store chain."Dayton's Keeps Growing: A Cover Story Again", Minneapolis Star, December 15, 1964, page 11B.
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."Target Store to Be Built in Fridley", Minneapolis Star, January 10, 1967, page 12B. 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."Dayton Makes Deal to Buy Book Stores in California", Minneapolis Star, April 23, 1968, page 12B.
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.Johnson, Fred. "Discount Stores Expected to Top Dayton Hudson Retail Operation", Minneapolis Tribune, July 21, 1970, page 5. 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."Dayton Hudson to buy Vegas store", Minneapolis Star, page 19B. 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."Dayton Hudson Will Be IDS Tower Tenant", Minneapolis Tribune, January 18, 1970, pages 1C and 5C. 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."Dayton Hudson acquires 2 Cities mail-order firms, Minneapolis Tribune, July 15, 1972, page 10A. 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 ) 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.,"Dayton's no stranger to city", Sioux Falls Argus-Leader, April 17, 1978, page 4D. and Target opened four new units and reached $600 million (~$ in ) 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 (now known as the Minnesota Keystone Program), 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'sGreenwald, John. "Proposed Dayton's Acquisition: Mervyn's climbs up from obscurity", Minneapolis Star, January 31, 1978, page 5B. 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.