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Target overhauling its kids apparel lines

Target Corp. is replacing longtime kids’ labels Cherokee and Circo with a new store brand called Cat & Jack, in a major bet on the lucrative children's apparel market.

Bloomberg Businessweek has an in-depth look at the new line— one of the biggest product introductions since CEO Brian Cornell took over two years ago — and what it could mean for Target (NYSE: TGT), which is seeking to reinvigorate its sales and recapture its old fashion buzz. The products sit in a Venn-diagram sweet spot for Target, which considers both fashion and children's products two of its key focus areas.

Target's making several gambles with the new launch, particularly since Circo (Target's in-house brand) and Cherokee (which is licenses and designs) were already successful lines, with about $1 billion in annual sales. "The kids’ business wasn’t broken. It was strong," said Julie Guggemos, head of product design and development.

The company is also letting kids help design and even market the new lines in advertising and social-media spots, though Chief Marketing Officer Jeff Jones' chief worry in that regard is that the results will look so good that people won't believe kids did them.

To help keep the new lines — which have to cost the same as Circo and Cherokee — profitable, Bloomberg says Target has lined up new long-term deals with Asian suppliers.


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