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Target Returns to Canada With Private Label Kids Line
Target has agreed to distribute its Cat & Jack private label children’s apparel brand inside Hudson’s Bay, marking its return to Canada retailing.
Cat & Jack will get a dedicated space inside Hudson’s Bay locations. Prices in Canadian dollars range from $7 to $35, with an average price of $15.
In 2011, Target entered Canada with its acquisition of a portion of the Zellers chain to mark its first international expansion. By 2015, Target announced it was closing all 133 Canadian locations after losing $2 billion on the venture. The failure was blamed on a poor expansion plan, the aggressive timeline, constant understocks, and high pricing.
Target’s entry into Canada had been strongly hyped, as Target’s own research showed that 70% of Canada’s population was already familiar with the “cheap chic” brand, with 10% having shopped online or crossed the border to shop at Target’s U.S. stores.
Hudson Bay is betting Target’s reputation up north hasn’t taken too much of a hit.
“We’re listening to customers, and are very focused on delivering an assortment that is relevant and reflects what Canadian families are looking for,” said Liz Rodbell, president and CEO of Hudson’s Bay, in a press release. “Cat & Jack will be key in our kids assortment, and we know our customers will be excited that they can now get this loved brand in Canada.”
Cat & Jack, which launched in 2016, already is a $3-billion-a-year business for Target. On its fourth-quarter analyst call, Jill Sando, Target’s chief merchandising officer of apparel and accessories, said the company sells more than 300 million units of the product line annually, “which comes out to about eight Cat & Jack items for every child in America under the age of 12.”
Overall, Target has 11 brands, also including Threshold and Good & Gather, that generate at least $1 billion or more in annual sales.
Bill Foudy, president of owned brand sourcing and development for Target, said in Hudson’s Bay’s release, “Target has an industry-leading portfolio of dozens of owned brands that deliver amazing design at an incredible value to millions of consumers.”
A popular trend recently has been retailers opening in-store shops inside other stores, with Target housing Apple, Ulta Beauty, and Disney Clubhouse shops. Gap in 2021 introduced its first-ever Gap-branded home collection in Walmart, and in 2023 it introduced an exclusive collection of Gap-branded sleepwear, underwear, and intimates at Macy’s. However, the Cat & Jack collaboration with Hudson Bay is a rare instance of a private label selling at another store.
Discussion Questions
Does Cat & Jack stand a good chance of succeeding at Hudson’s Bay despite Target’s missteps in Canada?
Do Target and other U.S. retailers have an untapped opportunity to expand private labels to other stores, whether in foreign countries or the U.S.?
Poll
Loading …BrainTrust
Allison McCabe
Director Retail Technology, enVista
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
The fact Target can wholesale one of its brands to another retailer underscores how good it is at developing private labels. Cat & Jack is one of Target’s biggest success stories thanks to the effort made to produce good quality, well designed products. This new arrangement with Hudson’s Bay is a win for Target as it generates incremental revenue with minimal risk and no cannibalization of sales. It could also be the first of many such arrangements. Hudson’s Bay will benefit from having a solid value-for-money range, but really it should be developing its own private label collections in the same way Target has done.
Hudson’s Bay is a challenged Canadian department store brand that is suffering many of the same challenges as US departments stores. Their stores are in desperate need of an update. Adding Cat & Jack to their assortment won’t hurt their cause, and there is absolutely no downside to Target selling this line to Hudson’s Bay. However, given Hudson’s Bay performance, I doubt that this will translate into a big win for Target. Notwithstanding Hudson’s Bay challenges, there may indeed be an opportunity for Target and other US retailers to generate incremental revenue from making their private brands available to other ‘non-competitive’ retailers in other markets.
Rather than a “win-win”, it sounds like a “meh!-eh?” 🙂
Agree with you here. No real downside to doing this for Target as it is just incremental sales.
Honestly I’ve never really thought about the strength of a store brand outside its native environment – for the obvious reason we seldon see them elsewhere – so my guess would be Canadians won’t really associate it much – or at all – with Target, and it will have to survive on its own merits…just like any other “new” brand that a retailer might introduce. I’m more curious what this says about The Bay: it’s a poorly kept secret, even among those who don’t venture north of the 49th Parallel, that it has become Canada’s version of macy*s – the sole survivor, but not doing very well – so is this an early indicator they’re looking for a buyer ? (And for those who make tha valid point that Target is unlikely to re-enter the department store field, let’s broaden our scope to extended partnerships, rather than outright sale.)
Reminds me of Craftsman- Sears old house brand. Not exactly the same as Craftsman had a better reputation than the mothership, and ironically, lives on today at Ace Hardware, long after Sears has evaporated. There are some great store brands out there that have strong cross-nameplate potential. Kirkland comes to mind.
Great examples…!!!
And on a smaller scale, Marks & Spencer Christmas treats stocked by Target itself!
My experience is that the average consumer doesn’t spend much time caring whether merch is private label or not. They like it or they don’t. So congrats to Target for developing a brand with “wings”. Also speaks to the cost structure that they can accept the lower margins of selling merch as wholesale.
Yep. This certainly isn’t a “Wow! We have a Target brand in Hudson’s.”
The view from Canada on this.
Target’s failure in Canada is a case study on what NOT to do.
HBC has a foot in the grave. Another real estate company masquerading as a retailer. Target would be advised to get paid in advance.
Likelihood of mid to long term success rating: 35%
This is a no-brainer. No brainer because for Target and The Bay, there’s no risk, nothing to worry about, and, I expect, nothing to be excited about either. File this one in the SubReddit “Mildly Interesting.”
To be clear, this isn’t Target “returning to Canadian retailing.” It is simply a wee bit of cross-selling of a popular brand in new markets. Can this grow into something bigger? Target is excellent at developing private-label brands, no question. They may also try other brands in the future. That said, I’m pretty sure the Bay, which is struggling like US department stores, will not be the fuel Tarzay needs to conquer the Canadian market.
Further proof that Target does not just develop private labels, they launch full fledged brands. I’m not sure how much it actually moves the needle for either company, but it’s one hell of a salute to Target’s brand development.
I agree. I am interested to see if Target starts pushing this further. More brands in more retailers outside of the US. Incremental sales plus improved economies of scale from higher volumes. What’s not to like?
Cat & Jack’s vibrance, quality and affordability will make Canadian parents visit Hudson’s Bay more often. During Target’s 2013-2015 run in Canada, its children’s apparel was outstanding. Now Cat & Jack gives Canadian kids stylish wardrobes and good value. This retail partnership with Hudson’s Bay is a safe way for Target to test the market and rebuild brand loyalty.
Private labels are in demand right now, so more retailers may consider partnering with each other to boost reach and sales. Target, Trader Joe’s, Kroger, Ulta and Dick’s Sporting Goods, please keep your northern neighbors in mind for your private label growth strategies.
This really isn’t a “private label”. It is just another brand.
True. Private labels have evolved into brands in their own right, especially at savvy retailers like Target.
The success of Cat and Jack depends entirely on Hudson’s. The fact that it is associated with Target does not bring equity across the border.