CLIPS November 2007

Page 1

From the President As you know, CLIPS comes to you regularly as a useful digest of information related to our mutual interests in commercial interiors issues and trends. This special issue of CLIPS is also intended to bring you news - only this time it’s about Target Commercial Interiors.

Corporate Headquarters 81 S. 9th St. Suite 350 Minneapolis, MN 55402 Ph 612-343-0868 Fx 612-332-5733 Toll Free 888-333-4664 TCI-1 (Retail Store) 2470 West 79th Street Bloomington, MN 55431 Ph 952-885-7600

Sales Office / Showroom 1365 North Road, Suite C Green Bay, WI 54313 Ph 920-884-0265

Sales Office / Showroom 2804 Rib Mountain Drive, Ste. E Wausau, WI 54401 Ph 715-849-3131

Sales Office / Showroom 1020 John Nolen Drive Madison, WI 53713 Ph 608-257-0521

Sales Office / Showroom 801 North Perryville Road Rockford, IL 61107 Ph 815-398-3300

targetcommercialinteriors.com © 2007 Target Commercial Interiors

The Wall Street Journal—upon hearing of a recent project we completed for the Arizona Diamondbacks—contacted us because they felt this was an unusual client for an organization like ours. At the same time two other stories appeared – one from Street & Smith’s Sports Business Journal and another about our recent work for The American Lung Association of Minnesota. In keeping with our tradition of collaboration, HGA was the lead architecture firm on both General Mills and Minnesota Public Radio, and Perkins & Will was the architectural partner for the law offices of Winthrop and Weinstine. We hope you will enjoy reading the articles. And as you consider your short and long-range plans for your important facility projects, please keep us in mind. We are delighted to continue our leadership in providing a broad spectrum of exciting clients with the best possible product and service solutions for transforming buildings into productive, appropriately branded business assets. Best regards,

Joe Perdew President, Target Commercial Interiors

Target gives back over $3 million a week to education, the arts and social services.


October 4, 2007

Designs on a New Market Niche Target’s Little-Known Unit for Commercial Interiors Aims to Expand Its Business

1

By ANN ZIMMERMAN

CLIPS

Phoenix

Corrections & Amplifications: Carl Bergauer is the past chairman of the Office Furniture Dealers Alliance, a division of the Independent Office Products and Furniture Dealers Association. A Marketplace article yesterday incorrectly called the division the Office Product Dealers Association. (WSJ Oct. 5, 2007) Reprinted by permission of The Wall Street Journal, Copyright © 2007 Dow Jones & Company, Inc. All Rights Reserved Worldwide. License number 1806530287282. Dow Jones & Company’s permission to reproduce this article does not constitute or imply that Dow Jones sponsors or endorses any product, service, company, organization, security or specific investment.

Target Commercial Interiors work includes the Arizona Diamondbacks.

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.

Target’s team found round, hot-pink lacquered minibars for a W hotel. 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 Please turn to next page

Continued from prior page 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 officefurniture 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 Dallasbased 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

Target Commercial Interiors work includes, from above, a library at Minnesota Public Radio; and a cafeteria at General Mills Headquarters. General Mills and Minnesota Public Radio’s interior architecture by HGA.

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 commercialsponsor signs next to concession stands with big black-and-white photos of fans, in frames that can be updated with new images. Noiseinducing 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.”

2

CLIPS

Photo credits: Arizona Diamondbacks- Al Payne Minnesota Public Radio- George Heinrich General Mills- Assassi

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

Target’s Designs on a New Market Niche


October 4, 2007

Designs on a New Market Niche Target’s Little-Known Unit for Commercial Interiors Aims to Expand Its Business

1

By ANN ZIMMERMAN

CLIPS

Phoenix

Corrections & Amplifications: Carl Bergauer is the past chairman of the Office Furniture Dealers Alliance, a division of the Independent Office Products and Furniture Dealers Association. A Marketplace article yesterday incorrectly called the division the Office Product Dealers Association. (WSJ Oct. 5, 2007) Reprinted by permission of The Wall Street Journal, Copyright © 2007 Dow Jones & Company, Inc. All Rights Reserved Worldwide. License number 1806530287282. Dow Jones & Company’s permission to reproduce this article does not constitute or imply that Dow Jones sponsors or endorses any product, service, company, organization, security or specific investment.

Target Commercial Interiors work includes the Arizona Diamondbacks.

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.

Target’s team found round, hot-pink lacquered minibars for a W hotel. 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 Please turn to next page

Continued from prior page 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 officefurniture 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 Dallasbased 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

Target Commercial Interiors work includes, from above, a library at Minnesota Public Radio; and a cafeteria at General Mills Headquarters. General Mills and Minnesota Public Radio’s interior architecture by HGA.

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 commercialsponsor signs next to concession stands with big black-and-white photos of fans, in frames that can be updated with new images. Noiseinducing 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.”

2

CLIPS

Photo credits: Arizona Diamondbacks- Al Payne Minnesota Public Radio- George Heinrich General Mills- Assassi

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

Target’s Designs on a New Market Niche


CLIPS

3

Target’s Chase Field rebranding hits mark

AFTER

Arizona Diamondbacks President Derrick Hall was flabbergasted when the club’s executive vice president of business operations, Tom Garfinkel, proposed hiring discount retailer Target to rebrand Chase Field, the team’s 10-year-old ballpark. “I was shocked,” Hall said. “My first question was, ‘Is the stadium going to look like their stores?’” Not quite. Garfinkel, a former Chip Ganassi Racing executive, knew the work Target Commercial Interiors, the company’s in-house designer, did to plan the group’s race shops in Concord, N.C., and Indianapolis. Target sponsors Ganassi’s three drivers. Target Commercial Interiors “demonstrated they clearly understand design that is smart and functional and aesthetically pleasing at the same time,” Garfinkel said. Still, tweaking a 10-year-old retractable roof stadium in downtown Phoenix was a different challenge. The task was a critical one for an MLB team aiming for brand consistency despite winning four division

titles (including this season) and one World Series championship in its short history. The Diamondbacks’ ultimate goal was to find a third party to design a cleaner, fresher look for their facility, reducing the marketing clutter while putting a focus on the team’s new predominant color, Sedona red. Gone are the team’s old teal and purple, except for a few mementos showcased from the team’s 2001 title run. The team spent its first nine seasons playing in a stadium that contained a mish-mash of colors on the concourses, where display cases featured jerseys and caps for the club’s coming opponents. Historical timeline graphics overhead showcased baseball’s tradition as a whole, but there was little if any emphasis on the Diamondbacks’ identity. “If you walked around the ballpark and took a picture and showed it to somebody, they wouldn’t know you were in the home of the Arizona Diamondbacks because of all the different colors that weren’t really symbolic to our brand,” said Shaun Rachau, vice president of communications.


“Everywhere you looked, you were bombarded by messages, most of which had nothing to do with baseball,” said Bill Lavidge, president of The Lavidge Co., a Scottsdale ad agency that has worked for the Diamondbacks since 2000 and participated in the rebranding. Instead of choosing a sports architect with interior design experts or a boutique firm for the renovations, Garfinkel convinced Hall that Minneapolis-based Target Commercial Interiors, a 50-year-old firm specializing in office design, was a perfect fit for the job. Then they had to present their case to Diamondbacks ownership. Hall said they asked the same tough questions: “‘Is it going to look cheap?’ and ‘Are we taking a shortcut?’” Notably, the team’s budget was a modest $6 million to $7 million for the first phase to make over Chase Field using its new colors

and logos, which made fiscal sense in light of Target’s “expectmore, pay less” company motto. Target’s lead designer, Lynn Munyon, “got it cut down to the extent that we were so far under budget, with a couple months to go, we were able to add things that we had not planned to do, such as redoing the bathrooms and replacing condiment carts,” Garfinkel said. The initial work, completed in the six-month period from September 2006 to April of this year, cost about $3.5 million for a job that could have easily topped $10 million based on what other teams have spent for similar projects, he said. Target Commercial Interiors will continue to rebrand the building in the next two offseasons by renovating the premium Strike Zone Lounge behind home plate, developing a new center-field museum and designing work space for the ticket sales department in what has been an employee weight room. Continued on page 5

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BEFORE


The Diamondbacks additionally wanted to spread a separate warm and fuzzy message throughout their ballpark, stamping black-and- white images on the stadium walls to reflect their view that Chase Field provides family entertainment in its purest form. “We wanted to focus on advertising the fan experience,” Garfinkel said. “In baseball, there are special moments to share together. There’s an emotional tie going to the first game with our dad. It was all about being genuine without manufacturing something.”

Target Commercial Interiors applied costeffective techniques such as rewrapping concourse signs and elevator panels with industrial contact paper, and installing stronger carpet to withstand wear and tear in the corners of the suite level hallways that experience the greatest foot traffic. “What happens to these stadiums [over time] is there starts to be a layering effect that is not very aesthetic,” said Munyon, the Target designer. “This is really kind of a housecleaning.”

CLIPS

5

The makeover extends to all parts of the 10-year-old ballpark.


Target Commercial Interiors recently teamed up with the American Lung Association of Minnesota to help the nonprofit complete a healthy design remodel of its St. Paul headquarters, a 17,000 square foot office building, which is home to 25 full-time employees and frequented by more than 1,000 volunteers and visitors each week. “Raising the standard for healthier indoor environments has been a mainstay of the Lung Association’s mission since 1992,” noted Penny Gottier Fena, executive director of the American Lung Association of Minnesota. “Thanks to corporate partners like Target Commercial Interiors, our headquarters will be healthier and use significantly less energy than before the remodel, cutting our utility bills in half, and leaving more core dollars to support programs and staff.” ALAMN’s remodel will be the first in Minnesota to qualify for the U. S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Gold ranking, and only the 10th in the nation to earn this status. All products used in this project were selected to be sustainable, minimize indoor air pollution and asthma/allergy triggers, and to be as energy-efficient as possible. In providing commercial interior design services and products to meet LEED gold certification, Target Commercial Interiors is helping ALAMN offer a healthier work environment for its many employees and volunteers. “This healthy design remodel helps the Lung Association live our values,” said Fena. “We now have a nicer looking and healthier venue for our trainings for tobacco control, asthma education, chronic obstructive pulmonary disease support groups and development activities.”

All major work on the project, which began in July 2007, was completed in early October. ALAMN is planning a Grand Reopening and Dedication on November 14, 2007

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Funded entirely by a $1.2 million federal grant from the Health Services and Resources Administration and by gifts-in-kind from corporate partners like Target Commercial Interiors, the project serves as an example and teaching tool for others considering a remodel of a commercial building.


From the President As you know, CLIPS comes to you regularly as a useful digest of information related to our mutual interests in commercial interiors issues and trends. This special issue of CLIPS is also intended to bring you news - only this time it’s about Target Commercial Interiors.

Corporate Headquarters 81 S. 9th St. Suite 350 Minneapolis, MN 55402 Ph 612-343-0868 Fx 612-332-5733 Toll Free 888-333-4664 TCI-1 (Retail Store) 2470 West 79th Street Bloomington, MN 55431 Ph 952-885-7600

Sales Office / Showroom 1365 North Road, Suite C Green Bay, WI 54313 Ph 920-884-0265

Sales Office / Showroom 2804 Rib Mountain Drive, Ste. E Wausau, WI 54401 Ph 715-849-3131

Sales Office / Showroom 1020 John Nolen Drive Madison, WI 53713 Ph 608-257-0521

Sales Office / Showroom 801 North Perryville Road Rockford, IL 61107 Ph 815-398-3300

targetcommercialinteriors.com © 2007 Target Commercial Interiors

The Wall Street Journal—upon hearing of a recent project we completed for the Arizona Diamondbacks—contacted us because they felt this was an unusual client for an organization like ours. At the same time two other stories appeared – one from Street & Smith’s Sports Business Journal and another about our recent work for The American Lung Association of Minnesota. In keeping with our tradition of collaboration, HGA was the lead architecture firm on both General Mills and Minnesota Public Radio, and Perkins & Will was the architectural partner for the law offices of Winthrop and Weinstine. We hope you will enjoy reading the articles. And as you consider your short and long-range plans for your important facility projects, please keep us in mind. We are delighted to continue our leadership in providing a broad spectrum of exciting clients with the best possible product and service solutions for transforming buildings into productive, appropriately branded business assets. Best regards,

Joe Perdew President, Target Commercial Interiors

Target gives back over $3 million a week to education, the arts and social services.


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