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Target said to kill catalogs
Report: No. 2 discount chain indicates Target.direct unit will become pure online retail operation.
February 3, 2004: 10:25 AM EST

NEW YORK (CNN/Money) - Target Corp. has folded its catalog business that includes five print titles, focusing instead on making its Target.direct business a pure online retail operation, according to a published report.

Trade publication Catalog Age reported Monday that the affected publications include three Marshall Field's catalogs, Signals and the Love a Deal catalog.

Target could not immediately be reached for comment.

The move, if confirmed, would have caught industry watchers and analysts off guard.

Kurt Barnard, president of Barnard's Retail Consulting Group, said he's surprised by the company decision to completely exit the catalog business at a time when most retailers are branching out their businesses into different channels in a bid to boost sales.

Minneapolis-based Target Corp. (TGT: Research, Estimates) operates some 1,200 Target discount, 265 Mervyn's stores offer mid-priced clothing, mostly in California, and about 62 Marshall Field's stores in the Midwest.

While sales at the retailer's namesake Target discount stores improve, more and more analysts are questioning whether the retailer may be better off shedding its poor-performing department store divisions that are struggling after a long string of declining sales.

"By shuttering the Marshall Field's catalogs, Target is saying something about its department stores business -- business isn't what it used to be," Barnard said. "Part of the reason is that department stores overall are doing badly."

Mark Mandel, analyst with Blaylock & Partners, agreed. "This could also be a cost-saving move for the company. Target's Internet sales have certainly outperformed catalog sales."

Target entered the catalog business in 1998, when it was still named Dayton Hudson Corp, with its $120 million purchase of Rivertown Trading Co. from Minnesota Communication Group.  Top of page




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