Target unveils small-format stores in Burbank and Koreatown

April 4, 2018

By Kevin Smith | San Gabriel Valley Tribune

Target held a ribbon cutting on Tuesday for two small-format stores in Burbank and Koreatown that officially opened to the public Wednesday, and two more downsized locations are planned for Anaheim and La Canada Flintridge.

The Burbank store at 1033 N. Hollywood Way is about 24,750 square feet and the Koreatown location at 620 S. Virgil Ave. is 22,000 square feet. Both are considerably smaller than the 145,000-square-foot average for a standard Target store. They will bring about 150 new jobs to the region.

The small-format store at East Lincoln Avenue and North State College Boulevard in Anaheim will open this summer, and the La Canada Flintridge location at 965 Town Center Dr. will open its doors in the fall. Each will employ about 75 workers.

Sometimes, smaller is better

The small-format stores offer men’s and women’s apparel and accessories, home decor, groceries, health and beauty items and tech accessories — but in a downsized format. The Minneapolis-based retailer opened 30 small-format stores last year as it looks to readjust its brick-and-mortar strategy and 30 more are planned for this year, according to company spokeswoman Jacqueline DeBuse.

“We’ve had the small-store concept for several years now,” she said. “This allows us to go into places where we couldn’t fit a typical-sized store, so we can bring that store experience to city centers, dense neighborhoods and even college campuses.”

The move also speaks to the growing number of retailers that have downsized their brick-and-mortar operations in the face of Amazon’s strong online sales. Target, Walmart and other big-box retailers have beefed up their online operations to capture more e-commerce business.

The Burbank store will also carry sporting goods, toys and a broader range of baby and kids products. The Koreatown store will have a Starbucks and will dedicate more space to grocery items. Both locations will have a CVS Pharmacy, a wide array of mobile devices for sale and order pickup services.

A revamped building

Jon Lamirault, who will manage the Burbank store, said the revamped building has an interesting history.

“It was originally a grocery store called Akron that went out of business in the early 1980s,” he said. “At that time it was one single building, but it was later split up into four separate buildings. They had a piano store and a real estate office … it went through a lot of changes. When Target got it we put those buildings all back together and gave it a new upgraded look. It’s very hip and cool.”

Target has a heavy Southern California presence with more than 100 stores in the greater Los Angeles area. Eleven of those locations are small-format stores in such communities as Mission Hills, Westwood, Long Beach, Irvine and Orange. The retailer also has a small-format store in USC village in Los Angeles.

Lots of community interest

“We’ve really built this store up from the ground floor, putting up the shelves and stocking the inventory to make sure everything is ready,” Lamirault said. “From the moment we took over the store we’ve had 50 to 60 people walk up on a daily basis to ask when we’ll be open. We’ve also had people come over from other shops to see what the store looks like.”

Target has more than 1,800 stores scattered throughout the U.S. that employ nearly 350,000 workers with additional marketing and technical operations in India.

Hyper-local distribution centers

“Most of our growth will be in these small-format stores, although you still might see a few more standard-sized stores crop up here and there,” DeBuse said. “We’re also opening a small-format store in New Jersey this week.”

Speaking late last year, Target CEO Brian Cornell said the company is “elevating every aspect” of how it serves its guests. That includes revamping existing stores, introducing more small-format locations and pursuing an aggressive digital strategy.

“As we open more small-format stores in new neighborhoods across the country we’ll be even closer to our guests,” Cornell said in a statement, adding that the downsized stores will serve as “hyper-local distribution centers to fulfill digital orders faster.”

Target’s distribution advantage

Burt P. Flickinger III, managing director for the retail consulting firm Strategic Resource Group, said Target’s strategy makes sense.

“They are trying to locate their stores strategically along bus lines for commuter mass transit as well as being accessible to consumers with cars,” he said. “It’s a checkmate move against Amazon to saturate poorer neighborhoods.”

Flickinger added that Target’s in-house fleet of truck drivers gives the company a definite leg-up against Amazon.

“Amazon uses third-party logistics companies and the federal government is starting to enforce a rule that allows truck drivers to drive for only 11 hours a day,” he said. “That is going to create an acute shortage of over-the-road drivers, so Amazon will be a facing a massive delivery crisis. Target will be able to use its own logistics and delivery network while Amazon is out there with searchlights looking for drivers.”