Introduction:
In 2000, Target Corporation purchased Mossimo clothing line to distribute in its retail outlets. This investment proved extremely successful by increasing men and women's apparel sales. For the fiscal year of 1999, before the acquisition, Target reported $2.6 billion in sales, $78 million or 3% of that was clothing sales. By 2001, they reported their fiscal year sales to be $3.3 billion, $231 million or 7% was in clothing sales. Over that two year span, their clothing sales increased by 297%, and represented 4% more of the corporation's total sales.
In addition to helping spike sales, the designer products have been crucial to Target's image, which has evolved into something quite different from its competitors, Wal-Mart and Kmart (the No. 1 and 2 discounters). When asked of his opinion regarding Target's strategy, Marshal Cohen, president of NPD Fashion world, a market research company specializing in fashion retail said, "Even if designers do not sell a lot of product, they're able to escalate the image of Target to attract customers who wouldn't normally shop at a place like that." According to Cohen's expertise, "If you can have 25% of your collection sell well, that's a great season."
With this transition, Target created a new category of retailer by offering upscale designer products to regular people at reasonable prices. So far, the strategy has spelled success. Marian Salzman, chief strategic officer for the marketing communications firm Euro RSCG Worldwide has commented, "What Target is doing is translating high design for the real world. They have made a designer of world-class stature really accessible to the average Joe or Jane; it's very c ...