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Thursday, August 16, 2012 - Page updated at 03:30 p.m.
Urban-friendly Target to open Wednesday in downtown Seattle
By Amy Martinez
Seattle Times business reporter
At the new Target store in downtown Seattle, you won't find plastic backyard pools, large dining-room tables and dog-food bags that weigh as much as 20 pounds.
But you will find inflatable air mattresses, pub-style tables and 8-pound bags of dog food to save a little space.
Target, the mass merchandiser known for selling trendy-yet-affordable goods to suburban families, now has its sights set on a growing number of urbanites.
On Wednesday, Target will debut a smaller, more urban store called CityTarget in downtown Seattle, a block from Pike Place Market in the Newmark residential tower.
At 96,000 square feet, it's two-thirds the size of a regular Target and spread across three floors, with 185 parking stalls underneath.
CityTargets also will open Wednesday in Chicago and Los Angeles, followed by San Francisco and a second L.A. location in October.
Target chose Seattle for one of its first three Cities because downtown has a healthy mix of condo and apartment dwellers, office workers and tourists, said senior vice president of stores Bryan Everett.
It also didn't hurt that the Newmark offered Target a large chunk of commercial space near Pike Place Market, a rarity in such a densely populated area.
"We just felt the economics of the store would work very well there, not to mention it's a great space," Everett said. "The location is prime."
Target's urban expansion comes as it looks for new markets in which to grow after building out America's suburbs.
Minneapolis-based Target opened only 21 new stores in the U.S. last year, compared with more than 90 in 2008. Starting next year, it plans to expand to Canada with more than 100 stores, in addition to opening Cities in Portland and a third L.A. location.
Like Walmart and Best Buy, which also are experimenting with downsized urban formats, Target realizes that today's technologically savvy shoppers aren't flocking to big-box stores as they once did, said analyst Leon Nicholas, senior vice president at Kantar Retail.
"A lot of their sales are being siphoned away by the Internet, so they don't need as much square footage. And the suburbs today are saturated in terms of retail," he said. "It wouldn't surprise me if half to two-thirds of the new stores they build in the U.S. over the next 10 to 15 years are CityTargets."
About 10 percent of Target's stores already are in urban areas — including the two-level Target near Northgate Mall — but City represents a new effort to penetrate central business districts.
The Seattle CityTarget lies at the base of the 24-story Newmark on Second Avenue, between Pike and Union streets.
Target paid $15.5 million for the property in 2010, re-energizing space vacated by Washington Mutual two years earlier.
Kate Joncas, president of the Downtown Seattle Association, said Target's arrival is the latest result of a years-long effort to clean up the Pike-Pine corridor.
The area, which once housed a needle exchange for heroin addicts, now includes a Hard Rock Café, luxury condominiums and renovated office buildings. A block from the new Target, Ariel Development of Seattle plans to buy the historic Eitel Building and convert its mostly empty offices into a hotel.
"Little by little, property owners have been making investments and putting new tenants in," Joncas said. "Having Target there means that corner is never going back to the way it was."
Downtown's retail core, hit hard by the recession, suffered a 10 percent decline in places to shop as retailers closed stores or stopped expanding. Retail leasing came to a virtual standstill in 2009, but business has since picked back up.
Trendy clothing chain Forever 21 opened across from Pacific Place in 2011. This past spring, Nordstrom Rack moved a few blocks east along Pine to Westlake Center, giving it a third more selling space than before.
Yard House Restaurants, a California-based chain known for a large selection of draft beers, will open in the former Borders Books & Music store at Fourth Avenue and Pike in early 2013. A deal also is in the works to fill the Kress Building at Third Avenue and Pike, where JC Penney was to open before new CEO Ron Johnson shelved plans for an urban-concept store. And Spanish fashion chain Zara is looking downtown for a first-ever Seattle store.
Local merchants say Target is a welcome addition to the neighborhood, even if it brings a new level of competition.
"We're so excited," said Sebastian Simsch, owner of Seattle Coffee Works, which shares an alley with CityTarget on Pike. "In the alley, you had people shooting up left and right. It was such a really lowlife block. And now, hallelujah! We're lucky to be here."
It's no wonder Target chose Seattle as a City launchpad when you consider how much downtown has grown over the past two decades.
From 1990 to 2011, Seattle's downtown population increased by more than 25,000 to nearly 60,000, the largest growth among eight urban peers, according to an analysis by the Downtown Seattle Association.
Only San Francisco, with about 71,200 residents, boasts a larger downtown population. (Besides San Francisco, Seattle's peer group includes San Diego, Philadelphia, Denver, Portland, Minneapolis, Boston and Charlotte, N.C.)
Susie Detmer, a commercial real-estate broker focused on the local retail sector for Cushman & Wakefield-Commerce, said Target provides another benefit to living and working downtown.
"Finally, people in-city don't have to drive out to the suburbs to get a wide variety of products," she said. "If you think about it, there hasn't been something like Target close-in since Fred Meyer closed on Capitol Hill," replaced by a QFC grocery in the mid-2000s.
Jeff Calkins, who lives in a two-bedroom condo at the Newmark tower, said he appreciates the security that Target brings to the Pike-Pine corridor.
"Just walk down Pike," he said. "There's eight new security cameras on the Target side of the street."
But Calkins, 45, said he won't know what to make of the store until it opens.
"I think I've been in two Targets my whole life," he said, carrying a Seahawks reusable tote filled with fresh vegetables bought at Pike Place Market. "I'm not a Target shopper, so we'll see."
While the breadth of City merchandise is similar to what you'd see at other Targets, there are some differences.
"Instead of three sizes of Windex bottles, you may just see one," said Target spokeswoman Molly Snyder, conducting a guided tour of the store last week.
Flat-screen TVs measure 60 inches or less, down from a maximum of 70 inches in a typical Target. Paper-towel rolls come in packs of eight or 12.
"People who live downtown typically don't have room to store 24 rolls of paper towels," Snyder said.
The store also has a section called "CityLove," with Seattle souvenirs, including T-shirts, coffee mugs and postcards. For non-English-speaking customers, navigational signs show a different icon for each department, such as a ring for jewelry, or light bulb for home improvement.
Unlike regular Targets, City plays background music and uses window mannequins to showcase apparel. A touch of whimsy brightens the women's dressing rooms, where hooks are labeled "for sure" and "not so much."
Prices likely will be another difference. Retail experts say City prices could run 10 percent higher than at regular Targets to make up for the increased costs of doing business downtown. It's a claim Target officials do not deny.
"I think guests understand that in urban markets, there's a higher cost of doing business. So our prices will vary," Snyder said. "Some will be consistent with other Targets, and some may be slightly higher."
"We'll continue to comparison-shop, as we do in all our other stores, to make sure we're competitive in the marketplace," she added.
A block from the City store, condos at Fifteen Twenty-One Second Avenue are listed for $925,000 and up.
Target's cheap-chic strategy — some call it "Tar-zhay" in a faux French accent — appeals to well-heeled baby boomers and young professionals, said Nicholas of Kantar Retail. His firm found nearly 30 percent of Target shoppers come from households earning more than $100,000 a year, compared with 15 percent at Walmart.
Nicholas also believes Target can win over urbanites despite its suburban roots.
"Target has always found itself aligned with urban hipsters or people who once were or want to be urban hipsters," he said. "If you look at their advertising, everyone's happy and young. Yeah, you're a mom, but you're a hip mom because you buy Target stuff."
Arthur Anderson, a concierge at the Newmark building, said many residents are excited about the convenience of living above a Target store. No longer will they have to drive to Northgate for their Target fix, he said.
Still, the CityTarget has come with some concerns.
"Target is exciting, but it's still a discount store," Anderson said. "Initially, people worried about their property values, but no one really talks about that anymore."
Amy Martinez: 206-464-2923 or firstname.lastname@example.org.
Seattle Times business reporter Eric Pryne contributed to this report.
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