Target sells its office furniture business to Omni Workspace

Target Corp. is getting out of the office furniture business.

The retailer said Thursday it is selling one of its subsidiaries, Target Commercial Interiors, to Minneapolis-based Omni Workspace.

The move, which some analysts expected, comes as Target Chief Executive Brian Cornell has been refocusing the company and getting rid of side projects. Earlier this year, Target also killed off a video-on-demand service called Target Ticket.

"Target is continuing to drive our transformation by focusing on our core businesses and putting our guests at the center of everything we do," John Mulligan, Target's chief financial officer, said in a statement. "Target Commercial Interiors has a rich history and a great track record with clients, but its business model is tailored to commercial customers. The decision to exit a business is always difficult, but we are thrilled that TCI will remain in Minneapolis."

Omni, which is based in the North Loop, is the parent company of A&M Business Interior Services. According to its website, the 35-year-old company is a collection of businesses that together are one of the largest office and hospitality furniture services companies in North America. Company executives declined to comment on the acquisition.

Omni will keep Target Commercial Interior's leadership team in place and will continue operating its seven showrooms, including its flagship location on Nicollet Mall across from Target's corporate headquarters in downtown Minneapolis. The group's 175 employees, including 92 based in Minneapolis, will become Omni employees.

Target Commercial Interiors, which will be renamed after the sale is completed, also has locations in Arizona, Illinois and Wisconsin.

A Target spokeswoman would not disclose the sale amount, but said it was under $10 million.

Target Commercial Interiors is the progeny of Dayton's Commercial Interiors, which was founded in 1953 as a subsidiary of the Dayton Corp., formerly the parent of Target. At one point, it was the largest supplier of office furnishings in the Upper Midwest. In 2004, it changed its name to Target Commercial Interiors.

In 2005, Target Commercial Interiors opened its first showroom in Bloomington, which has since closed. Three years later, it opened an 11,000 square-foot spot on Nicollet Mall in a space formerly occupied by Crate & Barrel. The stores showcase various workstations, conference tables, chairs, lights, and floor coverings and also has interior designers on hand on to help with custom designs and colors. While they were once open to the general public, the showrooms have more recently required appointments and have been limited to corporate clients.

Target Commercial Interiors has done work furnishing a wide array of clients including Fortune 500 companies, casinos, sports stadiums, and hospitals. It has worked with UnitedHealth Group, General Mills and Starbucks. It also helped outfit the locker rooms and suites at Target Field and TCF Bank Stadium.

Leon Nicholas, a senior vice president for Kantar Retail, told suppliers last month that the subsidiary gave Target insight into how white collar America views interior design. But he said he couldn't figure out why Target was still holding onto it and expected it could soon be spun off. The business represented a small blip of Target's $73 billion in annual sales.

Target Commercial Interiors also outfits the retailer's corporate headquarters in Minneapolis and many of its stores around the country. That shouldn't change after the sale is completed. Target said it will remain a customer of the firm.

Kavita Kumar • 612-673-4113