In the early '90s, Target may as well have been Sears (SHLD) or Wal-Mart (WMT). The company was expanding, buying up retailers like Marshall Field's and even starring in the early Jennifer Connelly film Career Opportunities, but was just as faceless a discount chain as any of its other competitors.
Not that there was anything wrong with that. Minnesota and Midwest shoppers didn't head to Target for its cultural appeal, but for deals. In 1994, however, newly installed Chief Executive Bob Ulrich knew that wasn't going to be enough to separate it from the pack. At the time, the chain was fending off a buyout bid from JC Penney (JCP) and juggling the Dayton's, Hudson's, Marshall Field's and Mervyns chains in search of an identity.Ulrich got the idea that if you stick with low-ish prices but add high-quality products such as architect Michael Graves' brand of home goods, Isaac Mizrahi's clothing line and Alton Brown cookware, you could lure a different brand of customer into your store. When that plan went into action in 1999, profits hit $1.1 billion, nearly tripling the chain's $460 million take in 1996. It bulked up Target.com to compete with Amazon (AMZN) and started drawing college kids and their middle- to upper-middle-class families who got off on pronouncing the chain's name with the Francophone "Tar-zhay." By 2000, the parent company's name changed from Dayton-Hudson to Target Corp. Its non-Target stores were rebranded as Marshall Field's and sold off. While Target's original core was somewhat siphoned off by Wal-Mart, its new clientele worked out just fine. The recession led Target to scale back its upmarket discount offerings a bit, but its share price has more than doubled since its 1999 shakeup. It's not your grandma and grandpa's Target, but with forward-thinking plans such as smaller, urban-based CityTarget, it's sure their great-grandkids' shop of choice.