Photo: Target
Target launches $1 billion kids line
Target last week introduced Cat & Jack, a comprehensive kids and baby collection that the retailer expects will generate $1 billion in sales in its first year.
The line, to launch this back-to-school season, will replace Circo, its long-term in-house brand, and Cherokee, a licensed brand. The two labels were successful and did about $1 billion in combined annual sales. Baby, kids and women’s ready-to-wear drove the discounter’s apparel gains in the first quarter.
Covering 2,000 pieces of wardrobe staples and seasonal items for kids, toddlers and infants, Cat & Jack stands out because it was developed based on feedback from “hundreds of kids” along with their parents. Target noted on its blog that over 95 percent of the parents it surveyed talk to their kids and bring them into the decision-making process. “Real kids” will also be featured in advertising and social media spots supporting the launch.
A front-page article in Bloomberg BusinessWeek described Cat & Jack as “optimistic, modern, wholesome, inclusive, fun” and an integral part of Target’s ongoing effort to recapture its “cheap chic” reputation after trading down during the recession. The goal is to expand its children’s lines at twice the rate of the same categories at competitors, such as Walmart, Kohl’s, Children’s Place and Old Navy.
The overall children’s category at retail is seeing modest growth. However, Brian Cornell, soon after taking over as Target’s CEO in 2014, cited four signature categories — Style, Baby, Kids and Wellness — as priorities for investments to support the company’s stature in the marketplace.
Mr. Cornell said on Target’s first-quarter conference call, “We feel very good about the progress we’re making on signature categories where we continue to build market share and drive differentiation.”
- Designed With Kids, For Kids: Introducing Cat & Jack – Target
- Target overhauling its kids apparel lines – Minneapolis/St. Paul Business Journal
- Target’s Future Will Be Decided by Kids – Bloomberg
- Target’s (TGT) CEO Brian Cornell on Q1 2016 Results – Earnings Call Transcript – Seeking Alpha
- Target Shares Roadmap to Transform Business – Target
Discussion Questions
DISCUSSION QUESTIONS: Can children’s apparel work as a differentiator for Target in the same way as style and home? When are such major overhauls necessary?
Poll
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Ian Percy
President, The Ian Percy Corporation
Smart move by the Target team, and totally consistent with the points of differentiation that Mr. Cornell spelled out when he started. Without prejudging the quality or sales potential of the actual product, this reaches the customer visiting Target with something to buy beyond commodities.
The Cat & Jack line can be a significant differentiator for Target, provided that it offers products that consumers perceive to be better than the competition and if it is priced right. Target has been trying to regain its cheap-chic mojo. Cat & Jack could help drive new business.
Amazing things happen when you ask kids what they’d like to wear instead of having adults telling them. I love this development, starting with the name. Was “Circo” the brand name for a kids’ clothing line? Good grief. Look at the energy of “Cat & Jack!” And using real kids in the marketing is key. If consumer kids become the energy driving this brand, it’s a winner.
With me recently becoming a grandpa this is a good move — especially if fully supported online in real-time. My daughters and Grandma Redd spend hoards on these dang grandkids. I get cards on a birthday and they get cool clothes. Grandpas are neglected. It’s unfair — we are still cool guys …
You get cards?
It’s a great move to actually ask consumers — even when they are kids — what they want. Target needs to rediscover its stylish value proposition.
This is Target going back to what made Target great. My prediction last week was to watch for a surge in babies named Cat and Jack. This week I’ll predict Brian Cornell will soon author a book on being brave in retail. He gets it and is not afraid to make the hard calls. Kudos.
A couple of things:
Net/net good for Target to continue to evolve its brand experience. Relevance has yet to be determined; preference follows that.
As we like to say, “retail ain’t for sissies!”
“We’re not in the self-esteem business, but we are in the self-expression business,” says Amanda Nusz, Target’s head merchant for kids’ clothes (from the Bloomberg article).
While Cat & Jack is “just replacing” the existing kids apparel business, it sounds like it is a much stronger foundation to grow with growing families. Strategically, it makes sense to appeal from infant to middle school all under one brand roof.
As Millennials age into having children in the coming years, they will want products that reflect their attitudes, not just their aesthetics. Target can graft the core tenants of this line — optimistic, modern, wholesome, inclusive, fun — onto other categories as their relationships with young households grow.
This feels like a major differentiator that is at once fresh and aggressive, while still being very Target.