Advertisement
YOU ARE HERE: LAT HomeCollectionsFixme

Target May Sell Chains to Shift Its Strategy

The retailer reviews its options for its Mervyn's, Marshall Field's stores so it can concentrate on its discount outlets.

March 11, 2004|From Bloomberg News

Target Corp., the No. 2 U.S. discount retailer, said Wednesday that it may sell its Mervyn's and Marshall Field's department store chains to concentrate on its faster-growing discount stores.

The company's shares rose as much as 6% in after-hours trading. The announcement was made after the market closed.

Minneapolis-based Target hired Goldman Sachs Group Inc. to review options for the businesses, Target spokeswoman Cathy Wright said. Mervyn's, based in Hayward, Calif., operates 266 stores while Marshall Field's has 62 locations, all in the Midwest.

Chief Executive Robert Ulrich said in a statement that the company has "dedicated significant effort" to boosting results at the two chains, which many analysts and investors have suggested Target sell. Same-store sales fell 7.6% and 2.6% last year at Mervyn's and Marshall Field's, respectively, while those at the Target chain gained 4.4%.

"I view it as a positive," said Maria Azari, who helps manage $2.2 billion of assets at Denver-based Cambiar Investors, including shares of Target. "The department stores don't fit with the core Target strategy."

Possible buyers for Marshall Field's, which had a pretax profit of $107 million on sales of $2.6 billion last year, include St. Louis-based May Department Stores Co. and Cincinnati-based Federated Department Stores Inc., Azari said.

Shares of Target, which trails Wal-Mart Stores Inc. in sales, rose to $44.25 after hours. The stock was down $1.12 at $41.73 in regular New York Stock Exchange trading. The stock has risen 8.7% this year.

Advertisement
Los Angeles Times Articles
|
|
|