Target will spend $10 million to renovate Nicollet Mall store

Finally, some good news for Nicollet Mall.

Target Corp. CEO Brian Cornell told Twin Cities business and civic leaders Thursday the company will invest $10 million in a major renovation of its downtown Minneapolis store located next to the retailer's corporate headquarters.

"I know — and you know — how important retail is in the development of any great downtown," he said to about 1,200 people at the annual meeting of the Minneapolis Downtown Council. While some retailers have been leaving, "we're doubling down on downtown Minneapolis."

In the last several weeks, there have been a string of setbacks for Nicollet Mall's other retail offerings. Macy's is pulling the plug on its massive downtown store at 7th Street and is slated to close in early March. The two-story Barnes & Noble store down the street also is closing this spring.

The downtown council recently formed a committee charged with figuring out how to lure more shops to the area to add to a Saks Off 5th store that opened last year in City Center and a Nordstrom Rack slated to open in the fall at IDS Center.

Target's downtown renovation is part of a larger strategy that includes complete redos for stores in St. Paul's Midway neighborhood and St. Louis Park near Hwy. 100. Another 22 Twin Cities-area Target stores will receive smaller updates, including the addition of more self-checkout lanes.

Cornell said the top-to-bottom remodel of the Nicollet Mall store will be shaped to the needs of the downtown community, whose resident population has swelled since the store first opened more than 15 years ago. The enhancements will include a revamped grocery area by the street entrance, with prominent displays of "grab-and-go" meals and other fresh food. It will include newer layouts and fixtures in its apparel departments, an overhauled Starbucks, stenciled concrete floors, wood plank walls, LED lighting, more self-checkout lanes and a dedicated counter to pick up online orders.

Construction will begin next month and should be completed by early September. The store will remain open during the renovation.

Cornell said having a vibrant downtown is an important factor in recruiting and retaining top talent to work at the company.

Target is still the largest employer downtown with 8,150 employees, up 650 from the year before, according to an annual survey by the downtown council released at the luncheon.

The bigger workforce is a result of Target hiring more IT workers to reduce its reliance on contractors. But Target's downtown workforce is still smaller than the 10,000 employees it had two years ago before several rounds of layoffs.

The two-story Target store on Nicollet Mall, one of its top-performing stores in the state, first opened in October 2001 and initially wowed downtown shoppers with its separate escalators for shopping carts. But in recent years, Target has been opening much more impressive looking stores in cities such as Boston, Chicago, Seattle and New York. The remodeling will bring it more up to speed with those counterparts.

Among those who were beaming Thursday was Murray Williams, manager of the Nicollet Mall store since it first opened. He said the store hasn't had many other updates other than an expanded grocery assortment in 2008 that was later rolled out chain wide.

"I've been begging for it," he said. "It's going to be significantly more modern and have an industrial feel."

Williams said that the grocery section will get prime billing because it's one of the most frequently shopped areas of the downtown store with peak traffic from noon to 2 p.m. and from 4 to 6:30 p.m.

Last year, Target completed renovations of 39 stores across its chain of 1,800 stores, including locations in Roseville and Chaska. Target is expected to reveal more in the coming weeks about how many stores it plans to remodel nationwide this year.

Retailers often update their stores every few years. For Target, the remodeling with new displays, such as mannequins and lower tables in its home decor area, has been a key part of its strategy to keep stores looking fresh and to entice shoppers to come back at a time when online shopping continues to eat away at its business. The company is currently trying to get out of a nine-month slump in sales and traffic at its stores.

More than 90 percent of retail sales still take place in physical stores, Cornell reminded the audience on Thursday. While online sales may continue to grow, he said stores are still going to play a critical role for years to come.

"Physical stores will remain very important, and they're here to stay," he said. "You'll see us continue to invest in our fleet of stores around the country."

As part of its growth strategy, Target has been building new smaller-format stores in many big cities and near college campuses.

It has announced plans to open at least 30 new such stores this year, including one in Uptown in Minneapolis this October, similar to the stores it already has in Dinkytown and Highland Park.

Kavita Kumar • 612-673-4113