Midwest retail giant spreads high-end design across the U.S.

Everyone who is anyone knows it’s terribly stylish to shop for a $10 T-shirt to wear with a $2,000 suit. Fashion insiders have christened the look “high-low.” Today the epicenter of the luxe look for less can be found in a decidedly less glamorous locale: Minneapolis, Minn. — the corporate headquarters of mass retailing giant Target.

While Target didn’t invent the concept, it did make a conscious business decision in the mid-1990s to differentiate itself from other discounters like Wal-Mart and Kmart by adopting a mass-with-class mentality in everything from dinnerware to dresses. And that has earned the store the moniker that all retailers companies covet: it’s cool.

“What Target did was make low look as good as high,” says David Wolfe, creative director of the Doneger Group and a longtime consultant to the company. “They brought their design up to a whole new level of sophistication. In the early days, the product wasn’t nearly as good as their marketing. Now, they’ve raised the bar in every way. You should be paying more for everything at Target. That’s the secret of their success — champagne design for beer product.”

(Why doesn’t Target say so itself? Its execs are legendary for rarely deigning to speak to the press and declined to be interviewed for this report.)

The mass retailer’s inhouse design team gets many of its ideas for their the company’s 1,444 stores by scouring the same hot spots that inspire high-end retailers and big-name designers, says Robyn Waters, president of RW Trend and Target’s former vice president of trend, design and product development.

“We knew London as well as anybody,” says Waters who, during her 10-year tenure at the store, traveled with her staff several times a year to the U.K., Paris, Amsterdam (“a hotbed for cool children’s clothes”) and St. Tropez. “Trend tracking is in their veins — they eat, sleep and breathe it.”

In 1999, when the stores introduced their first “designer” brand — a line of housewares from respected architect Michael Graves –they were tapping into a major trend but did it in their own unique way.

“The emphasis was on the product, not the personality,” Waters says. The strategy worked. The $34.99 version of Graves’ signature Italian-made $150 teakettle was an instant hit. The line remains a bestseller today.

When the retailer decided to expand its idea of aspirational but accessible chic to clothing, it inked deals with a slew of Seventh Avenue favorites — Mossimo, Cynthia Rowley and Isaac Mizrahi — and struck marketing — and retailing — gold.

Michael Francis, Target’s executive vice president of marketing, told retail analysts in 1999: “We believe great design gives Target a sustainable advantage. ‘Design for all’ is our declaration of independence.”

Press-savvy Mizrahi has proved to be the breakout star of the pack.

“He’s a wonderful spokesperson,” Waters observes. “His philosophy was in line with the Target brand.”

It doesn’t hurt that he’s also a media darling who has hosted shows on cablers Oxygen and Style. His regular appearances on Oprah have helped boost sales of his Target collections, which range from business suits to dog beds.

Says Mizrahi: “I shopped there, and I already loved the stuff. It was a good fit for me. I’ve always believed high style and mass culture could cross over, and it has in a big way. You see the ‘Tar-zhay’ effect everywhere.”

The company’s latest foray into fashion is decidedly less mainstream — or is it? Earlier this year, Target introduced Go International, a group of capsule collections available in stores for a limited time from Europe-based designers Luella Bartley, Tara Jarmon and Sophie Albou of Paul & Joe.

Behnaz Sarafpour, a New York-based designer favored by socialites and actresses like Selma Blair, is slated to debut this holiday season.

The blink-and-you-miss them lines from culty labels seem targeted primarily at generating a new round of hype for the “Target” brand. Francis has admitted as much, saying: “We use public relations buzz to level the playing field with competitors who outspend us.”

“It’s a way for Target to figure out how far they can push the needle, and it gains them credibility in the fashion world,” Waters says. “They can do a wacky little skirt from Tara Jarmon. If it becomes a bestseller, you can bet it will wind up in the Mossimo line — and if it doesn’t work, it’s gone.”

There’s also a method to the fashion madness, Waters adds: “Because none of these collections are available for very long, it trains the consumer — if you like it, you better get it now. That’s very smart, and it’s got to help the sales figures.”

Recently, though, Target went uncharacteristically pricey with a Hollywood hookup at Intuition in Los Angeles. The boutique featured an exclusive line of clothing and accessories that played with the retailer’s iconic bull’s-eye logo.

The boutique’s owner, Jaye Hersh, together with Ross Misher, president of Brand Central, a Redondo Beach-based promotions company, approached Target’s marketing gurus with the idea. Target greenlighted the project — marking the first time the company has allowed anyone to use its trademark outside its stores.

Hersh enlisted a group of L.A.-based designers to put together an eclectic line of pricey products dubbed “Target Couture” that includes $140 skinny jeans, $300 cashmere sweaters and a $3,185 gold-and-diamond bull’s-eye necklace by Lizzie Scheck.

“The idea was never to put it in their stores,” Hersh explains. “It was to keep it upscale and have a Hollywood connection.”

Since the line launched in May, Hersh reports most items have been consistently selling out and are popular with Hollywood fashionistas including Lindsay Lohan, Hilary Duff and Carmen Electra.

There’s another aspect to this unlikely partnership. Hersh says her arrangement with the company is not a formal licensing agreement, explaining: “This is not about any kind of remuneration for them. This is about brand identification and having fun with it.”

Waters is not surprised by the unusual deal: “I’ve seen the magic they work with their relationships. They weigh very carefully who they align themselves with. This says Target is hip, cool and fun in an unexpected way.”

The retailing strategy has forced its competitors to pay attention to how their stuff looks. Wal-Mart pushed its Metro 7 fashion line in Vogue, while Martha Stewart at Kmart has expanded her range of products. .

Still, says Wolfe, Target’s strategy of staying popular with hipsters is just a means to a profitable end.

“The hip quotient is the icing, and underneath it’s not even cake — it’s bread and butter,” he says. “They offer the best of both worlds. The person that goes in there to buy diapers still feels like they’re buying into this wonderfully chic place. That’s their genius.”

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