Company Also Announces $3 Billion Share Repurchase Program
MINNEAPOLIS, June 9 /PRNewswire-FirstCall/ -- Target Corporation
(NYSE: TGT) announced today that it has reached a definitive agreement to sell
its Marshall Field's business unit and nine locations in the Twin Cities
currently operated as Mervyn's stores to The May Department Stores Company for
approximately
$3.2 billion in cash. Marshall Field's is a traditional department store that
emphasizes fashion leadership, quality merchandise and superior guest service.
It is headquartered in Minneapolis, operates 62 stores and employs
approximately 25,000 team members in 8 states in the upper Midwest. In 2003,
Marshall Field's produced revenues of $2.6 billion and pretax segment profit
of $107 million.
Under the terms of the agreement, Target Corporation will sell
substantially all of the assets directly involved in its Marshall Field's
business unit, including 62 Marshall Field's stores, three distribution
centers and approximately $600 million of Marshall Field's credit card
receivables. All current Marshall Field's team members will be offered
employment by The May Department Stores Company.
The transaction is subject to regulatory approval and is expected to be
completed shortly after approval is obtained. The sale is expected to result
in an estimated after-tax gain in the range of $1 billion, somewhat exceeding
$1.00 per share, in the second or third quarter.
Bob Ulrich, chairman and chief executive officer of Target Corporation,
said, "Our decision to sell Marshall Field's, though not easy, reflects our
long-term commitment to create substantial value for our shareholders over
time, combined with our responsibility to our team members, our guests and the
communities we serve. We believe that the sale of Marshall Field's to The May
Department Store Company as an ongoing business enhances the opportunity for
all of our stakeholders to enjoy continued success for many years."
Target Corporation also announced today its plans to repurchase $3 billion
of its common stock. The repurchase program was authorized by the company's
board of directors and replaces an existing share repurchase authorization.
The repurchase of the common stock is expected to be made primarily in open
market transactions, subject to market conditions, and is expected to be
completed within two to three years.
The review of strategic alternatives for Mervyn's is continuing in line
with its expected timetable, and additional information regarding this review
is expected to be available within 60 to 90 days. Mervyn's is a promotional,
middle-market department store, based in the San Francisco Bay area with 266
stores in 14 states, primarily in the west and south. In 2003, Mervyn's
generated $3.6 billion in revenue and $160 million in pretax segment profit.
Target Corporation announced in March that this review includes, but is not
limited to, the possible sale of Mervyn's as an ongoing business to an
existing retailer or other qualified buyer. As we reach important milestones
in this process, the company will broadly disseminate updates.
A pre-recorded message describing all information that is currently
available will be accessible later this evening by calling 612-761-1005. A
transcript of this pre-recorded message is also available on our web site at
http://www.targetcorp.com (Click on "investor information," then select
"presentations").
Forward-looking statements in this release should be read in conjunction
with the cautionary statements in Exhibit (99)C to the company's 2003
Form 10-K.
In addition to Mervyn's and Marshall Field's, Target Corporation operates
Target Stores, a large-store, general-merchandise, discount format consisting
of 1,249 stores in 47 states, as well as an on-line business called
target.direct.
Additional information about the sale of Mervyn's Twin Cities store
locations is contained in a separate release.
Target Corporation news releases are available at http://www.target.com or
http://www.prnewswire.com .
SOURCE Target Corporation
-0- 06/09/2004
/CONTACT: investor, Susan Kahn, +1-612-761-6735, or financial media,
Cathy Wright, +1-612-761-6627 or +1-312-781-2979, or media, Carolyn Brookter,
+1-612-696-6557, all of Target Corporation/
/Web site: http://www.target.com /
(TGT)
