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The Honolulu Advertiser
Posted on: Tuesday, January 17, 2006

Retailer Target seeking Hawai'i store sites

By Andrew Gomes
Advertiser Staff Writer

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Target, the nation's No. 2 discount retailer, said it is interested in expanding the chain to O'ahu and the Neighbor Islands if it can find suitable real estate.

"Target is exploring the possibility of opening new stores in Hawai'i," the company said in a written response to a query from The Advertiser. Target said the move is a natural progression of its expansion plans, but added that potential opening dates and locations would be premature to discuss.

The addition of Target to the retail mix in Hawai'i would please many residents, especially well-traveled kama'aina and Mainland transplants, who have long desired for Target to open stores here. In an Advertiser reader poll in 2001, Target was the most-cited retailer that Islanders wanted to see open in Hawai'i, topping votes for Trader Joe's, Crate & Barrel, IKEA and others.

"They're looking for land," said Councilwoman Ann Kobayashi, who represents Kaka'ako and Ala Moana area neighborhoods and recently met with Target representatives at their request.

Kobayashi said regional Target real estate manager Brian Treber told her the company is seeking as many as six store sites statewide, although Target officials did not confirm that.

Target representatives also have met with local real estate industry executives who said likely potential locations include Honolulu, Central O'ahu, Kapolei, Maui and the Big Island.

If Target establishes one or more stores in Hawai'i, it would reverse its previously expressed hesitation to enter the market, and join a growing cadre of popular national retail chains expanding here.

Several retailers and restaurants listed in the 2001 reader poll have since opened or are planning to open in Hawai'i, including Best Buy, Macy's, Ruby Tuesday, Krispy Kreme, Wolfgang Puck's, Nordstrom, L'Occitane and P.F. Chang's.


Target stores in Hawai'i also would satisfy dreams for scores of shoppers who affectionately refer to the upscale discounter as "Tar-jhay," and ratchet up competition for main rivals Wal-Mart and Kmart as well as smaller retailers selling everything from clothing and furniture to toys and electronics.

"We want Target here," said Lora Han, a Honolulu law clerk who briefly lived near a Target store in Orange County, Calif., that she said she visited just about every day.

Han said she likes Target for quality merchandise and some design trend items such as home furnishings by Michael Graves, apparel by Isaac Mizrahi and maternity wear by Liz Lange.

"They have nice things that are a little better quality and still affordable," she said. "We desperately need a Target here."


In 2001, a Target spokeswoman said Target had little interest in expanding to Hawai'i because distribution would be difficult compared with opening new stores in Mainland markets.

Target in recent years has aggressively increased expansion efforts with a goal to operate more than 2,000 stores by 2010, according to the company.

Today, Target operates about 1,400 stores in 47 states, up from about 1,000 stores five years ago. Hawai'i, Alaska and Vermont do not have Target stores.

The average Target store is about 126,000 square feet, about 25,000 square feet smaller than most Wal-Mart and Costco stores in Hawai'i. About 160 of Target's stores are SuperTargets that are significantly bigger because they sell groceries.

It isn't certain that Target will open its first Hawai'i store in the next few years or ever, given that suitable real estate may prove to be elusive or expansion plans could change.

"It's all about the location," said local retail analyst Stephany Sofos, who noted that Nordstrom took a decade to find the right site for its first Hawai'i store, which is scheduled to rise on the mauka side of Ala Moana Center this year.

Limited real estate and high construction and land costs can deter Mainland retailers from opening stores here, Sofos said. But an estimated 40 percent higher sales per square foot of store space can make Hawai'i stores lucrative for retailers who do come.

"When (sales) are that much higher, and you have a captive audience in your resident market and a churning market with the tourists, it's a good opportunity," she said.

Sofos said that a lot of competition already exists among discount retailers including Wal-Mart, Kmart, Costco and Sam's Club, but that there's always room for another strong nationally known brand that will put pressure on rivals and try to deliver the best value to consumers.

"Every time you bring a discounter in, your cost of living is going to get better," Sofos said. "It's good for the consumer."


Ka'inoa Ka'uluku'ku'i, a Hawai'i native who moved home last year after spending 20 years with the military on the Mainland, said she always felt like she got a good deal when shopping at Target.

"There was always a sale on something," she said, adding that the retailer would almost certainly do well in Hawai'i.

"It's like a grade up from Wal-Mart," added Andrew Ayala, a bartender assistant at Mai Tai Bar who moved to Hawai'i two years ago from Rancho Cucamonga, Calif. "Target is better."

Ayala's girlfriend from Hawai'i, Nina Pacarro, said she's not into big-box discount stores, but after visiting a Target during a Mainland snowboarding trip, she'd go back if one opened locally.

Lori Shimabukuro, a local flight attendant who flies to the Mainland frequently, said she'd rather have Trader Joe's open in Hawai'i, but Target would be good, too.

"I like it," she said, adding that if Target doesn't open Hawai'i stores she can continue her once-a-month shopping visits to the store as long as she keeps flying.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.