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Target May Sell Department Store Divisions

MINNEAPOLIS - Target Corp. here is looking to sell its Marshall Field's and Mervyn's California department store chains.

Yesterday Target said it hired Goldman Sachs to review "strategic alternatives," including the possible sale of one or both divisions. Both divisions have posted flat to declining sales in recent years. Chicago-based Marshall Field's operates 62 moderate- to upper-priced department stores in eight upper Midwestern states, including the world-famous flagship store on State Street in Chicago, and had revenues in 2003 of $2.6 billion and a pretax profit of $107 million. San Francisco-based Mervyn's operates 266 midpriced stores in 14 states, primarily in the West and the South, and had $3.6 billion in revenue and $160 million in pretax profit. By comparison, Target operates 1,249 Target stores in 47 states and had fourth-quarter revenues of $13.43 billion.

Target began in the early 1960s as a discount division offshoot of Dayton's department store in downtown Minneapolis. In 2000 the parent company changed its name from Dayton Hudson Corp. to Target Corp. to reflect the power of its discount stores, which accounted for the bulk of the company's business. The next year it changed the banners on its Dayton's and Hudson's department stores to Marshall Field's to capitalize on that chain's stronger name and cachet.
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