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Move over Fred! Barneys is Target’s new pal.

5/26/2008

NEW YORK —Somewhere between Prada and Marc Jacobs, Target has carved out a niche with its limited-time collection, Rogan for Target GO International line by American designer Rogan Gregory.

Target partnered with Barneys to give folks in New York and Los Angeles a glimpse of the new line before it gets devoured by the mass market. Barneys New York opened its doors to Target between May 9 and 11, followed by the L.A. store from May 16 through 19. Online, Target.com/go launched nationwide on May 18 and will be available through June 28.

Fashionistas nimbly scanned the racks to find ‘safari meets city’ merchandise. Rogan uses inspiration from zebra and leopard prints to kick up the tee, tank and dress designs that truly embrace earth tones. The modern city edge is seen in the striped vest, wide-leg trousers, jeans, trapeze tanks and plaid and wrap dresses. All merchandise is created from linen, bamboo, hemp and organic cotton and retails between $14.99 and $44.99.

The merchandise may look the part, but many wonder what a $40 pair of jeans from the Rogan for Target line is doing under the same roof as Rogan’s original $200 plus jeans. It makes sense for Target to lure luxury-loving consumers and, in turn, legitimize its quest for fashion. Perhaps the retailer even aims to lift lagging comp-store sales, which were “slightly below our planned range,” according to ceo Gregg Steinhafel. April comp-store sales increased 3.1%.

Jeff Klinefelter, senior research analyst at Piper Jaffray & Co., believes that the venture continues to differentiate Target’s fashion offering, not only from the rest of the discount retailers, but from traditional department stores. The strategy also aligns with Target’s “Expect More” slogan. “Customers would never expect [Target’s] apparel associated with the high-end department store,” he said. By placing itself on the map with the more affluent customer, Target highlights that innovation is critical to success, especially since softlines account for 20% of its business, Klinefelter added.

But, what is Barneys getting out of it? “It is all about traffic these days,” said Marshal Cohen, chief analyst at The NPD Group. “Getting consumers in stores and…at the top of [their] minds is critical.”

Mixing price points can also be useful to customers who shop both Target and Barneys. The luxe department store is showing that fashion has its place at value and high-end. “Someone might buy a $500 handbag at Barneys and accessorize it with a $39 pair of ‘designer’ jeans from Target,” Cohen said.

This high-low blending helps Barneys access a broader customer base. Although Rogan for Target won’t be a volume driver, it’s a business opportunity. “You never know…this could be one of the many business collaborations they have planned together,” said Klinefelter.

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