Investors decided Thursday that retailer Dayton Hudson is worth $688 million more bearing the new name Target Corp.
The venerable department store chain said it will adopt the Target moniker in acknowledgment that the parent company’s fortunes are increasingly tied to the discount stores that contribute 75% to its bottom line.
Dayton Hudson shares advanced $1.56 to close at $69 on the New York Stock Exchange following the announcement.
As of Jan. 31, the start of the company’s fiscal year, the parent company’s other divisions will come under the Target umbrella but continue to operate with separate names, such as Mervyn’s California and Midwest department store chains Marshall Field’s, Dayton’s and Hudson’s.
The ticker symbol for the country’s fifth-largest retailer, based in Minneapolis, will change to TGT on the NYSE.
“While the Dayton Hudson name served the company well since we adopted it in 1969, today, the Target name best reflects our business and our company,” said Bob Ulrich, the company’s chairman and chief executive.
Many Wall Street investors for years have urged changes in the company, suggesting the sale of poorly performing Mervyn’s, if not all non-Target stores.
By the end of last year, the parent company owned 914 Target stores, 267 Mervyn’s and 64 higher-end department stores. Target stores in 1998 accounted for more than $23 billion of the parent company’s nearly $31 billion in revenue and $1.58 billion of the corporation’s more than $2-billion pretax profit.
Changing the corporate name is another way of keeping Wall Street focused on the company’s prize performer, analysts said.
Target opened in 1962.