Target Commercial Interiors

Thought this was an interesting tidbit - Target doing corporate interior design and overhauling:

Designs on a New Market Niche --- Target's Little-Known Unit For Commercial Interiors Aims to Expand Its Business
By Ann Zimmerman
4 October 2007
The Wall Street Journal

Phoenix -- When the Arizona Diamondbacks decided to overhaul the interior of their 10-year-old baseball stadium last winter, the team's executives went to Target. Not one of the 1,500 retail stores around the country, but the retailer's less well-known commercial-interiors division.
Designers from Target Corp. spruced up the stadium's clubhouse, made the suite-level dining areas more inviting and hunted down a massive conference table for the team's boardroom.
While Target has built its brand as a purveyor of stylish-but-affordable apparel and mass-market merchandise, it has quietly carved out a profitable niche applying a similar philosophy to designing interiors for companies. Perhaps surprising for a company that caters to midmarket shoppers at its stores, much of its interiors work is at image-conscious businesses including some of America's largest companies and white-shoe law firms.
Now the unit, Target Commercial Interiors, is trying to broaden its reach to medium-size and small companies as well. And it's nudging its way into the spotlight with more jobs at sports venues, hotels and other sites in the public eye.
TCI, as it's known inside Target headquarters, is a relatively small part of the retailer, which had nearly $60 billion in sales last year. But the interiors business is growing in scope. The unit's more than 100 employees, many of them certified interior designers, don't shop at Target stores for their decorating supplies. But they do leverage the company's scale and sourcing ability to get good prices and find cutting-edge products -- an advantage in an industry dominated by regional and local design and architecture firms.
TCI, with offices across the street from Target's headquarters in Minneapolis, was previously Dayton Commercial Interiors, a 50-year-old unit of Target's original parent company, Dayton Hudson Corp. Since adopting the Target name in 2004, TCI's projects have included designing many areas in the Minneapolis headquarters of General Mills Inc.
TCI designers have been seeking out furniture and fixtures for a Minneapolis W hotel -- one of Starwood Hotels & Resorts Worldwide Inc.'s boutique hotels -- set to open next summer. Target's team tracked down sleek gray bureaus and round, hot-pink lacquered minibars for the rooms.
"With the Target name, the world is your oyster. The name is everywhere," says TCI President Joe Perdew. He says high-end clients haven't had any qualms about an association with a discount-store brand. "Many of our clients buy very nice, expensive wood furniture. You would think that they would balk at buying it from Target, but the problem never came up," he says.
TCI offers a full slate of design and decorating services, but frequently works with outside architects and designers.
The unit sees an opportunity in work for smaller companies because their options have been generally limited to office-supply stores or local office-furniture dealers, which tend to have a relatively narrow product range, says Ashok Dhariwal, TCI's vice president of operations.
As part of its effort to reach new customers, TCI opened its first office-furniture store in Bloomington, Minn., two years ago. The store -- branded Target Commercial Interiors -- carries professional-grade furnishings from about 20 manufacturers and a broad selection of merchandise, from wall art to 50 different models of office chairs. Some of the manufacturers' smaller, less-expensive items, such as $20 Adesso desk lamps, are also sold in Target's discount-chain stores.
Target says sales at the furniture store are running above expectations for the year, though it won't disclose numbers. And Target officials say they see great potential in the concept. However, there are obstacles to expansion. One key issue: Several furniture lines the store carries, such as Steelcase Inc., have exclusive agreements with furniture dealers in other cities.
Carl Bergauer, outgoing chairman of the Office Product Dealers Association, says TCI's approach is unique in the industry. "If it catches on, you'll see other dealers try to emulate it," he says.
But Mr. Bergauer, who is also president of Dallas-based Facility Logistix, an office-furniture company that supplies large and midsize companies, says Target faces challenges if it plans to expand its office-store concept outside its home market. "It's difficult to hire strong enough people in a retail environment, earning retail wages that also have the experience that's needed," he says. He adds that it's equally challenging to find installation and delivery services in different markets.
For some, the Target name is a leap when it comes to large-scale design and decorating projects. Jeffrey Moorad, the Diamondbacks' general partner and chief executive officer, admits he was taken aback when the team's chief operating officer Tom Garfinkel told him he was hiring Target to spruce up the stadium, bypassing companies that specialize in athletic facilities. "Now, I don't know what I like better, the job they did or what they charged us," says Mr. Moorad. He declined to reveal the price, and TCI says its rates are proprietary information.
Mr. Garfinkel learned about TCI in 2003 when he was working for Chip Ganassi Racing, an owner of car-racing teams in North Carolina, and TCI designed the interior of a new facility.
The Chase Field revamp came after a rebranding of the team that included changing its color to red from teal and purple. To emphasize the romance of the game, TCI designer Lynn Munyon replaced commercial-sponsor signs next to concession stands with big black-and-white photos of fans, in frames that can be updated with new images. Noise-inducing ceramic tiles were replaced with industrial-grade carpet tiles that can be changed as they get dirty.
The designers also found a way to avoid the expense of replacing the portable concession stands -- instead, they simply covered them with industrial adhesive paper in the new team color.
The challenge at Winthrop & Weinstine, a general practice and litigation law firm in Minneapolis, was to find furniture to suit the rich African cherry wood architects had used in the offices. Ms. Munyon found modular wood furniture that looked custom-made but cost less.
"Although Target is a discount store, this division is pretty high-end, yet affordable," says Becky Jenness, the law firm's executive director. The furniture for a partner's office, for example, cost about $15,000. "Architects are not always practical and functional," she says. "Target was both, and helped us come in under budget."