Target takes Manhattan

NEW YORK

Along the gritty streets of Spanish Harlem, shoppers comb through racks of clothes on sidewalks, stop into places like El Aguila for overstuffed burritos and pick up freshly sliced melons from sidewalk vendors.

In recent days, the iconic red and white Target bullseye has arrived in the neighborhood, too.

A woman with two small dogs swished by with a graphical Target tote bag on her shoulder last week. Christian Nava, 7, carried a plastic Target shopping bag full of towels, toys and back-to-school items.

"I got a notebook!" he boasted as he stood with his mother along E. 116th St.

After more than a decade of flirting with New York City, Target has finally opened a store here, on the eastern edge of Harlem and a stone's throw from the tonier Upper East Side.

"Manhattan is like the Holy Grail for discounters," said Eric Beder, an analyst with Brean Murray Carret & Co. in New York. "They can't figure out how to get here. The fact that Target found a way to get to Manhattan is a big coup."

Ever since Target turned a floating barge into a temporary store on the Hudson River in 2002, the Minneapolis-based retailer has been wooing Manhattanites without a permanent retail presence. It has plastered ads over huge billboards in Times Square, had its models scale a skyscraper near Rockefeller Center and even sold air conditioners out of a truck during one sweltering summer.

"Everything that's exciting about culture and design happens in New York," said Shawn Gensch, Target's vice president of brand marketing. "We've always used it as an advertising platform to build excitement for the brand. So, coming in with brick-and-mortar to the island of Manhattan is a launch pad for us. It's an exciting time to finally enter with commerce every day of the week."

The Great Recession forced Target to downplay its sassy, affordable-design image as it lost sales to its more staid discount competitors, especially Wal-Mart. It's been focusing on low prices, not the cheap chic designs that once made it famous, particularly here. But the buzz and gimmicks associated with the opening of the East Harlem store have been a way for Target to get its groove back.

Bullseye, Target's canine mascot, rang the opening bell on Wall Street Wednesday morning, as floor traders bent down and snapped photos with their cell phones. Whimsical red-and-white illustrations evoking Harlem are splayed in multiple billboards around Times Square and at subway stops. Double-decker tourist buses are touting the new store, and the No. 6 subway train, which passes through the station closest to the store, will be wrapped in Target's motif for a six-week, $250,000 advertising blitz.

At an invitation-only event at the store Tuesday, celebrities mingled with store employees, neighborhood locals, nonprofit leaders, educators and business owners. Jessica Seinfeld, who launched a line of Baby Buggy infant items for Target, attended with her husband, comedian Jerry Seinfeld. Miss New York showed up, wearing her pageant sash.

Rapper Doug E. Fresh -- a.k.a. "the Human Beat Box" -- took to a stage made to look like the Apollo Theater and called out to the crowd in the Infant/Toddler section: "Target, we're going to show you how we do it in Harlem!"

"It's very exciting to be in this market," said fashion designer Stephen Burrows, one of three featured "Harlem Designer Collections" exclusive to the store. The collections will roll out to New York area stores and target.com Aug. 1.

Burrows smiled for photos and signed one of his signature pieces, a multicolored knit dress, for a shopper. "Anything that lifts Harlem up is good for me."

Single biggest investment

It took 13 years for Target to open its doors in the East River Plaza, a 3 1/2-acre retail development on the site of a former industrial plant. Costco, Best Buy, GameStop and Verizon are also located here, and PetSmart, Marshall's and Old Navy are on their way. A parking ramp connects the stores for those outside the area who don't want to ride the bus or lug their items to the subway stop a half-mile away.

Given the price of real estate, the store represents the largest investment in a single project in the history of the company, said John Griffith, Target's senior vice president of property development, who quickly added: "And we're expecting the best return, over time."

Sales the first year are projected to be "north of $90 million," he said, putting it among the top five performers of the 1,740-store chain.

Across Manhattan, many who have shopped Target stores in New Jersey or one of the eight other New York stores said they welcomed the urban location.

"My husband and I are serious Target fans," said Lisa Haney, who used to live 30 blocks south of the new store and now works out of her Brooklyn home. "We rent a car on weekends just to go to the suburbs and go to Target. It's great there's finally one in the city."

She'd already made two trips to the Harlem Target before its official grand opening today, buying sponges, pajama bottoms and running shorts.

While big-box retailers such as IKEA, Best Buy, Home Depot, and Bed Bath and Beyond began making inroads into Manhattan in the early 2000s, discounters have taken their time. When Costco arrived in November one executive told Bloomberg News, "We've been trying to get in forever."

Kmart has stores at Penn Station and in Astor Place near New York University. But analysts say the sweep of Target's assortment -- which includes toothpaste, fresh groceries, flat screen televisions, video game consoles, furniture, dishes and kitchen gadgets -- makes it a unique discount outlet for a city that craves easy access to household basics.

"It'll be the de facto price leader in this area," Beder said. "And, let's face it. New Yorkers are snooty. There's more cachet to Target than Kmart."

With more than 100,000 people living within a mile of the new store, Target executives say they can coexist with neighborhood mom-and-pops that don't have nearly the sway over suppliers to keep costs down.

"This is more about your weekend stock-up," said Griffith. "Your butcher, your baker, your deli, you'll still go there. They add the flavor, excitement, fun and convenience to Harlem. We don't see that changing at all."

A sales clerk at Regines Originals worried that Target's arrival could hurt business. The store sells women's clothes as well as items for infants and children.

But Kim Brown, who was shopping at Regines with her 2-year-old foster son, Bryce, predicts that people will be loyal to favored merchants and still seek out Target's low prices.

"They don't have a lot of children's clothing stores around here," she said, noting she often treks to the Bronx or downtown for kids gear.

"I love Target," she added. "I usually go to the one in Queens. I'm so happy they're opening one right here, close to home, that I don't have to take the R train to."

The wheels seemed to be turning for Caroline Vasquez, who owns the only nail salon in the area just around the corner from Target. She's expecting a baby in January, and said she can't wait to make lunchtime runs to Target, because she's often too exhausted when she's done working at 8 p.m. to go to her neighborhood Kmart in the Bronx. With the right promotion, she mused, her own store traffic could pick up.

There's nothing strikingly different about the single-level store in Manhattan. At 174,000 square feet, it's bigger than the typical 136,000-square-foot suburban footprint. Cash registers are arranged three-deep, an innovation inspired by the high cost of real estate.

The store carries products tailored to neighborhood demographics -- Ebony greeting cards, Spanish-language books, religious candles and multicultural dolls. It also has the largest assortment of Sylvia's canned goods of any Target, a nod to Harlem's famous soul-food landmark.

With a flag now planted in Manhattan, Target officials say they'll look for opportunities for small-format stores, those in the 60,000 to 80,000 square foot range, though it likely won't happen in the next three to five years.

What was true for Frank Sinatra may also be true for Target.

Said Beder, the analyst, "If you can succeed in New York, you can succeed anywhere."

Jackie Crosby • 612-673-7335