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Target Zeroes In on Pasadena : City and the Discount Chain's Parent Both Hoping for a Boost


Target Stores will give a Pasadena landmark a new incarnation and may give a historic retail district new life when it opens in a renovated building on Colorado Boulevard on Sunday.

The opening is Target's latest shot in the discount chain industry's escalating war for the lucrative Southland market. Racing for good locations, the three major discount players--Target, Kmart and Wal-Mart--are expanding rapidly in the Los Angeles area this year.

The Pasadena facility--a two-tier structure containing 175,000 square feet--is the nation's largest Target store. Target is the leading revenue-producing division for Minneapolis-based Dayton Hudson Corp., and company executives hope the Pasadena store will help the parent firm rebound from a disappointing 1993.

In a separate expansion move, the company announced Friday that next year it will open its first two Target "supercenter stores"--facilities that offer grocery items as well as general merchandise--to compete with similar superstores operated by Wal-Mart and Kmart.

The new Target is replacing Robinsons, which closed in January, 1993, as part of a merger of the Robinsons and May Co. chains. The store, the work of famed architects William L. Pereira and Charles Luckman, opened to much fanfare in 1958 with promises of a "sophisticated shopping experience."

Target is trying to retain some of the building's upscale image. Unlike other Targets, the Pasadena store has a gourmet coffee aisle and will sell cappuccino, espresso and baked goods in an in-store restaurant.

Coffee and cake aside, the Pasadena store will sell the same wide variety of lower-priced products found at other Targets--toys, cosmetics, shoes, sporting goods, housewares, consumer electronics and clothing.

Some expect the store at 777 E. Colorado Blvd. to help rejuvenate the retail district surrounding the historic Pasadena Playhouse. The retail district originally grew with the success of the theater, which was built in 1924 and became internationally renowned until its closing in 1966.

The theater was reopened in 1986 and is again successful. However, the once-vibrant retail district surrounding the theater has been losing sales to retail centers several blocks to the southeast--the South Lake Avenue district--and to the thriving Old Pasadena district, several blocks to the west on Colorado Boulevard.

"The store will fill a void," said Arnold Bellow, chief executive of the Pasadena Chamber of Commerce. "It will bring in shoppers who ordinarily would not come downtown. These people will go to nearby restaurants and specialty stores."

Pasadena Playhouse district merchants also consider the Target store a boon to the district's core, an eight-block region that includes a mix of copying shops, offices, restaurants, small clothiers and bookstores.

"There was a clear need for this store," said Joel Sheldon, principal owner of Vroman's bookstore at 695 E. Colorado Blvd. "We welcome the additional foot traffic and hope people will visit our store and others in the area."

Wendy Albert, marketing director of the Plaza Pasadena mall, also believes Target will help the area. The mall, which is just outside the district and home to specialty shops, a Broadway and a J.C. Penney, has been struggling.

"It will be great for the Plaza because it will bring people to the area who may not know we are here," Albert said.

Dayton Hudson will open eight more Targets in the state this year, including three in July in Southern California. It already has 61 Targets in the metropolitan Los Angeles area but still trails its chief Southland competitor, Kmart, which has 86 stores in the region.

Michigan-based Kmart, which had a difficult 1993, has renovated 70% of its 200 California Kmarts. The nation's No. 2 retailer plans to open seven Southland stores in 1994.

Wal-Mart, which entered the race late by opening its first Southland store in 1991, hopes to gain ground on its two competitors. The nation's leading retailer has opened 66 stores in the state but only 13 in the Los Angeles metropolitan area. The company plans to open at least four more Southland stores in 1994. The area is important because discount store sales in the region have been rising while department stores sales have declined, said Ira Kalish, a retail economist at the Los Angeles offices of Management Horizons.

"The discount chains believe there is room for growth in Southern California," Kalish said.

Dayton Hudson's Sales Engine

Target Stores is the primary sales and earnings growth vehicle for the Minneapolis-based Dayton Hudson Corp. Target has 554 stores, Mervyn's has 273 stores and the company's department store division--Dayton's, Hudson's and Marshall Fields--has 63.

Percentage of 1993 sales

(revenue, in millions)

Target: 61% ($11,743)

Mervyn's: 23% ($4,436)

Department stores: 16% ($3,054)

* Percentage of 1993 earnings

(operating profit, in millions)

Target: 60% ($662)

Mervyn's: 16% ($179)

Department stores: 24% ($268)

Source: Dayton Hudson Corp.

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