Chicago Tribune from Chicago, Illinois • Page 75

INSSDE SECTION 5 Week in review 2 Andrew Leckey 3 Jane Bryant Quinn 3 Bank, thrift yields 3 Chicago stocks 3 Binary beat 5 Market tables 4,8 HE-IN-THE-SKY VISION? A company plans to launch scores of satellites to provide highspeed Internet access. Page 5 Sunday, October 13, 1996 wmt4fm ''tjrfc WEEK IN REVIEW President Clinton is likely to reap benefits of strong corn and soybean harvests. Is the stock market getting used to Motorola's declining performance? Changes afoot at Montgomery Ward; new order at McDonald's. Page 2 BINARY BEAT New guide aims to help wary on-line shoppers A magazine expected to debut in April will offer a roadmap to Internet shopping, including how-to tips and Web site reviews. Page 5 Software spotlight See Page 5 0 Todd bavidsonliTiage fcnK Don't depend on care-giver Uncle Sam Long-term care insurance is being pushed as an alternative to relying on Medicaid for nursing-home expenses.

Page 3 A dose of balance for a portfolio The new inflation-indexed bonds, experts say, can provide better protection than the ordinary Treasuries. Page 3 7 Target shines as tony gem in discount troika Yet investors say Dayton Hudson should free princess from her lackluster sisters 1 Target caters to regional tastes. nwr -t A ft. Michael Yalda, 3, of Wheeling, like iwr business consultant Francesca Fell is shopping at the Schaum-burg Target, pushing a cart brimming with household items for her new apartment in northwest suburban Barrington. "When you shop the other stores, you know you're in a discount store," the 25-year-old says, commenting on her preference for Target's "good quality for the price." She buys her serious clothes from a department store, "but if you want something 1,1.

4 holiday goods, trendy, you do a lot better here." Target has its own national style director and a national trend merchandiser, rarities for. price-conscious retailers. Consultant Fred Marx, of Marx Layne in Farmington Hills, says, 'Target doesn't knock off the Paris runways, but they think more like a Gap about colors, and if velvets or velours are in, they'll have them." Target's theme, which it hammers home via "Expect more. Pay Less," translates to quality first price second. Its mantra is "more" more quality brand names, trendy fashions, "more clean, organized shopping, more guest-friendly service." The "guests" Dayton Hudson lingo for customers are family-oriented; 60 percent have children hving at home.

A typical Target shopper is 40 years old, the youngest of any major retailer. Median household income is about $44,000, a third, earn $50,000. Three-quarters of those wheel-, ing carts through a Target store have college degrees. Target traces its "upscale discounter" image to its origins. While Wal-Mart and Kmart were begot by price-conscious, variety-store chains, Target was an experiment that resulted from a Dayton executive's idea that there was a market for quality goods (not irregulars) at low prices that would be made possible through selling big volumes See Target, Page 4 I By Genevieve Buck Tribune Staff Writer It was 1962.

John Glenn was the first American in orbit, James Meredith was the first African-American admitted to the University of Mississippi, the Twist was ail the rage and President John Kennedy was proposing a balanced federal budget It was also in 1962 that Bud and Sam Walton opened the first Wal-Mart Discount City in Rogers, Ark, S.S. Kresge Co. opened the first Kmart in Detroit, and Dayton Co. opened its first Target outside MinneapolisSt Paul in Roseville, Minn. History marches on, leaving behind much of what was new and fresh decades ago except, curiously, in discount retailing.

The three startups of 1962 have grown into a mass-merchandising triumvirate with more than 5,000 stores and annual sales approaching $150 billion. Wal-Mart Stores Inc. clearly dominates not only discount retailing, but the entire industry. Bouncing back from a brush with bankruptcy a year ago, Kmart Corp. today is secure as the nation's No.

2 vendor to "budget buyers." Then there is Target, with nary a trace of "discounf or "off-price" to mar its name a name frequently given a faux French accent by upscale fans who affectionately, or affectedly, refer to the stores as "Tar-zhay." Target is the status member of the discount troika far smaller in number of stores and volume, but more appealing, more au courant, more vibrant Target is the darling of Wall Street and the diamond in the crown of its parent, Dayton Hudson Corp. of Minneapolis. But numerous retail analysts and consultants and, more pointedly, Dayton Hudson's investors, are asking, "What's next?" If Target is to remain a standout in discount retailing, they believe, it has got to be freed from its weak sisters: Mervyn's and the department-store division, which includes Chicago's Marshall Field's. Dayton Hudson management thinks otherwise. Bob Ulrich, chairman and chief executive of both Dayton Hudson and its Target division, is ada- "VW" r-o.

Chicago area "guests," including ti a i. -m- fev particularly an image that comes from deftly distancing itself from other discounters. Target proudly calls itself "upscale." Its ads appear in slick national publications. Hip fashion magazine Elle writes about its "unexpected cachet" its "flea-market-priced finds." And how many discounters liave bridal and baby gift registries, as in Target's Club Wedd and the Lullaby Club? Wearing a Harvard sweatshirt, up from 503,000 the previous year. America's hot markets also have attracted a new breed of foreign players, mostly from Europe, who want to get in on the New World's latest version of "Let's Make a DeaL" They're raiding the investment banking divisions of some of Wall Street's most influential firms, pushing salaries once again into the stratosphere and making stars out of bond peddlers.

Everyone, it seems, wants to get in on the act. Twentysomething brokers are providing retirement advice to their parents. Housewives are becoming financial planners. Teachers are throwing down their books and heading for Wall Street Mike Glascott, 25, recently completed training to become a financial adviser in the downtown Chicago office of Prudential Securities, the brokerap arm of the insurance 0 TARGET The discount-store division of Minneapolis-based Dayton Hudson profitable and popular because of its upscale-on-a-budget aura. Chairman, CEO: Bob Ulrich, 53 Employees: 141,000 Founded: 1962 Number of stores: 735 (31 in Chicago area) 1995 sales: $15.8 billion Source: Target Chicago Tribune mant about keeping the three together, sharing information and systems and playing off each others' strengths.

He calls this a "boundaryless" organization with the 'Power of Whatever problems may be inherent in this' setup, however, Target continues to chalk up enviable numbers. It is Dayton Hudson's fastest-growing division, increasing its square footage consistently by some 10 percent a year. It has 735 stores; 31 are in the Chicago area, including those in Palatine and Lombard that opened this month. By year-end, Target will have 1,103 stores. Its dollar figures are even more impressive.

Revenues have jumped 16 percent a year in 1994 and 1995, to $15.8 billion in '95. Understandably, it far surpasses the divisions that have far fewer stores, Mervyn's division, with $45 billion in annual sales, and the department stores Dayton's, Hudson's and Field's with $3.2 billion. Singlehandedly, Target accounted for 72 percent of Dayton Hudson's operating profit of $1 billion last year and 67 percent of its $24 billion in revenues. Analyst Dean Ramos of Minneapolis-based Dain Bos-worth line, estimates Target's sales this year will exceed $18 billion and will near $21 billion in 1997, when he expects its operating profit to top $1 billioa "It's a gem," says retail analyst Richard Nelson of Nesbitt Burns Securities Inc. in Chicago.

"Target has quality merchandise, good presentation in an upscale environment, a very strong private-label program some of fed by a rejuvenated investment banking industry, feeding off a stock market that continues to shatter record highs. High-priced dealmakers skilled at swinging mergers and acquisitions, initial public offerings and leveraged buyouts are once again in high demand. Not since the halcyon days before the 1987 stock market crash, when every young MBA dreamed of becoming a Master of the Universe, have securities firms employed so many purveyors of stocks and bonds, institutional mony managers and old-fashioned Tribune photos by Jose M. More Target has 735 stores, among them this Palatine store that opened this month. By year-end, Target will have 1,103 stores.

It is Dayton Hudson's fastest-growing division. Euphoria of Wall Street has spread to the payrolls their own bags look just like Coach and it's very effective in attracting affluent households." One young woman who's a regular shopper at two South Side Targets says she loves the stores. "They're clean, have good merchandise that's not that much more expensive than other stores. And they have all this stuff you never knew you absolutely needed." Nelson pinpoints some strong factors behind Target's success, corporate dealmakers trying to cash in on America's mania to get rich on Wall Street The hiring isn't limited to big-name brokerage houses like Merrill Lynch or Smith Barney. The biggest job gains have come at regional securities firms and discount brokers, where average, middle-class Americans at least the ones with incomes high enough to sock away something for retirementhave voted for the time being to put a hefty portion of their savings into the stock market.

The National Association of Securities Dealers reports the number of brokerage house branch offices grew 5 percent, to 62,000, this summer from a year ago. The number of registered brokers an unreliable number because many do not actively trade stocks reacfd an all-time high of 527,000, Wall Street jobs boom The soaring stock market and the push by Baby Boomers to put away money for retirement has triggered a jobs boom on Wall Street, driving employment to the record levels set just before the 1987 crash. There are signs, though, that the growth is leveling off. In thousands of securities industry Combining short memories and big dreams, thousands of people are flocking to take jobs as optimism reigns in the securities industry. By Merrill Goozner Tribune Staff Writer giant A recent graduate of Brown University, where he majored in business economics, he hopes to parlay a network of business contacts from his 51-year-old father's Lincoln Park bar and real estate firm into a successful career as a stockbroker.

"I'm doing my father's retirement planning right now," Glascott said. Armed with the latest weapon of choice for the fledgling stockbrokera personal computer and a financial-planning software packagehe hopes to rope in the assets of his "large family, and small businessmen and entrepreneurs I've met and known in the neighborhood all my life." As always in the securities industry, a frenzy can only take place when lofty expectations have replaced memories of darker days. z5ee Wall Street, Page 6 employees iroo iinrougn jumi; 258,107 1990: 209,890 160 7KH Jh 1 1 i NEW YORK-Wall Street where memories are short and greed has temporarily triumphed over fear, is on a hiring spree. Employment at the nation's securities firms has surged to near-record levels' as battalions of new recruits are being thrown into the battle to control the financial assets of aging Baby Boomers, who have finally begun saving for retirement in earnest Xhe hiring boom isalso being 1985 '86 '87 '88 39 '90 '91 '92 '93 '94 '95'96 Source: Securities Industry Association ChicagoTribune.