In 1962, the Dayton Company, using a concept developed by John F. Geisse, entered discount merchandising by opening its first Target discount store in Roseville, Minnesota, a suburb north of Saint Paul. The name "Target" originated from Dayton's publicity director, Stewart K. Widdess, and was intended to prevent consumers from associating the new discount store chain with the department store. The new subsidiary, Target Stores, ended its first year with four units, all in Minnesota. Target Stores lost money in its initial years, but in 1965 it reported its first gain with sales reaching $39 million, allowing a fifth store to open in Minneapolis. In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain, which became the largest hardcover bookseller in the United States.[3] The bookseller chain was named after the founder, but with the y in Dayton replaced with an l. Target Stores expanded outside of Minneapolis by opening two stores in Denver, Colorado, and sales exceeded $60 million. In 1967, the Dayton Corporation was established and it went public with its first offering of common stock, and it opened two more Target stores in Minnesota resulting in a total of nine units.[6]
In 1968, Target changed its bullseye logo to a more modern look, and expanded into St. Louis, Missouri, with two new units. That year, Target Stores experienced a transition phase: Target's president and co-founder, Douglas J. Dayton, went back to the parent Dayton Corporation and was succeeded by William A. Hodder, and senior vice president and cofounder John Geisse left the company. He was later hired by St. Louis-based May Department Stores, where he founded the Venture Stores chain.[6] Target Stores ended the year with 11 units and $130 million in sales. In 1969, it acquired the Lechmere electronics and appliances chain that operated in New England, and expanded Target Stores into Texas and Oklahoma with six new units and its first distribution center in Fridley, Minnesota.[7] The Dayton Company also merged with the Detroit-based J.L. Hudson company that year, to become the Dayton-Hudson Corporation consisting of Target and five major department store chains: Dayton's, Diamond's of Phoenix, Arizona, Hudson's, John A. Brown of Oklahoma City, Oklahoma, and Lipmans. In 1970, Target Stores added seven new units, including two units in Wisconsin, and the 24-unit chain reached $200 million in sales.[6] That year, Dayton-Hudson also acquired the Team Electronics specialty chain that was headed by Stephen L. Pistner.[8]
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