Target revamps Indianapolis distribution center

Target Corp. is remodeling a portion of its west-side Indianapolis fulfillment center as part of a larger revamp of the retailer’s distribution network to accommodate online orders.

“Target is updating its Indianapolis regional distribution center to fulfill online orders in addition to its primary role of supplying Midwest stores,” Target spokesman Eddie Baeb told IBJ. “We’ve done this at a couple of facilities already.”

The 1.4-million-square-foot Indianapolis facility, which employs about 600 people, is located at 7551 W. Morris St., west of Girls School Road and north of the Indianapolis International Airport. 

A portion of the Indianapolis facility—about 254,000 square feet—is being transformed into space that can handle online orders. Online orders are shipped in much smaller quantities to a greater number of destinations than are store shipments, Baeb said. Work at the Indianapolis facility has already begun and should be complete by late summer or early fall.

Until now, Target’s 41 distribution centers have supplied either physical stores or online orders, but not both.

The Indianapolis fulfillment center updates are part of Target’s ongoing and multipronged strategy for responding to online shopping trends. Other parts of that effort include:

-An ongoing rollout of same-day delivery services and store pickup of online orders in select markets.

-Target Restock, which allows customers to order household essentials online and for next-day delivery. The service launched in 2017 and went nationwide this month. 

-Remodeling of physical stores. In the first quarter, Target completed remodeling projects at 53 stores and began work at another 113.  

Baeb said Target is not disclosing how much it is investing in its distribution center remodeling efforts.

But the retailer has given an overview of its capital spending in financial filings. The company says it made $2.5 billion in capital expenditures last year. That included a $1.6 billion investment in existing stores, a $282 million investment in new stores and a $620 million investment in information technology, supply chain and other investments. 

Those investments will ramp up this year. “We expect capital expenditures in 2018 to increase to approximately $3.5 billion as we accelerate the rate of store remodels, continue our current rate of small-format store openings, and continue to make supply chain investments,” Target said in a public filing. 

The efforts appear to be paying off. In its first-quarter earnings report this week, Target reported quarterly revenue of $16.8 billion, up 3.4 percent from the same period a year earlier. Comparable online sales—sales from online channels that Target has owned for at least 13 months—rose 28 percent during the quarter.

In 2017, 5.5 percent of Target’s total sales originated online. That’s up from 4.4 percent in 2016 and 3.4 percent in 2015.

In other news:

— The California-based styling salon chain known as Drybar officially opens its first Indiana store Friday at Keystone at the Crossing, 8691 River Crossing Blvd. The salon’s local operator is Sasha Higgins. Drybar was founded in 2010 and now has 100 U.S. locations. The salons don’t offer haircuts or coloring—they offer a short list of styling services, with a focus on blowouts. A blowout is a salon technique that involves using a blow dryer and heat tools to style and straighten the hair.  

— Indianapolis-based Cunningham Restaurant Group opened its newest restaurant, Tavern at the Point, on Monday at 401 Massachusetts Ave. The long-standing establishment was previously owned by Chip and Patti Perrin under the name Old Point Tavern. The Perrins stepped away from the business in December, and it had been closed for the past several months while Cunningham renovated the space.

— Russell Provisions, a menswear shop at 918 Broad Ripple Ave., opened for business May 19. The store made some adjustments to its name and ownership as it was preparing to open, owner Brian Kelly told IBJ. Originally, Kelly had two partners in the venture and the shop was to be called Anthony Leigh. Kelly, who is now the sole owner, said that even though the name has changed the store's merchandise focus remains the same: Affordable and small-label jeans, T-shirts, button-down shirts, polos and other menswear. Boys’ clothing will be added in the future, Kelly said. Russell Provisions is in the space formerly occupied by the womenswear shop Fira Boutique. Fira closed earlier this year.

— Craig Huse, president and co-owner of Indianapolis-based Huse Culinary Inc., has earned a Silver Plate Award from the International Foodservice Manufacturers Association. Huse Culinary is the owner of St. Elmo Steak House, Harry & Izzy’s and Burger Study restaurants. The silver plate award recognizes U.S. restaurant operators in nine different food service categories. Huse won in the independent restaurant/multi-concept category.