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Target Alters Designer Strategy

Target Corp., the mass retailer that practically invented the long-term designer marriage, is now seeking only short-term affairs.

BOSTON — Target Corp., the mass retailer that practically invented the long-term designer marriage, is now seeking only short-term affairs.

This story first appeared in the April 8, 2008 issue of WWD.  Subscribe Today.

Stacia Andersen, president of Target Sourcing Services, said Sunday the retailer is unlikely to form another deal like the one due to expire at the end of this year with Isaac Mizrahi. Or, she said, in a shot at rival Kohl’s Corp., like the one that department store chain has with Vera Wang.

Noting that designer brands account for only 5 percent of Target’s apparel business, Andersen said, “We don’t want to be as long-term as others” in designer partnerships.

Andersen acknowledged the breakup with Mizrahi, who is taking over the design helm for Liz Claiborne, may hurt Target’s business when customers loyal to that brand can no longer find the products in Target stores, but “it was time for both of us to move on.”

With the departure of Mizrahi, the retailer will concentrate on “in-and-out” relationships with designers to “create more excitement” on the sales floor, she said.

Target will focus on its Go International initiative of tie-ups with young designers, who have included Proenza Schouler, Luella Bartley, Patrick Robinson, Behnaz Sarafpour, Erin Fetherston and, most recently, Jovovich-Hawk. But even that strategy is changing for the latest line, which Target will design in-house.

Prices on the private label collection will range from $16.99 for a tank top to $49.99 for a textured dobby Anorak jacket.

Andersen also revealed Target is seeking sourcing alternatives to China among Pacific Rim and Central American countries.

“We continue to look for opportunities to do business with other countries,” she said during a keynote speech at the fourth annual Retail and Luxury Goods Conference at Harvard Business School.

She cited potential apparel business in countries such as Vietnam, Thailand and Indonesia, while acknowledging that China, with its large labor pool and “relatively good” infrastructure, will always be a major Target supplier.

“We’ve always had a good business in Central America because of the lead time advantage,” Andersen said. “If they could increase their raw material strategy, that would be helpful.”

Addressing about 130 M.B.A. students, Andersen said that after recent recalls of Chinese-made goods, Target expanded its safety procedures to more products. The company requires multistage testing on raw materials, during production and on finished products. Target also insists factories meet its working conditions specifications.

“No one wants a $2 T-shirt if it’s made by children,” Andersen said.

She reiterated that Target has no plans to open stores outside the U.S. “We have a lot of growing to do in the U.S. before we need to open internationally,” Andersen said.

Another participant in the conference, Leslie Mueller Fletcher, director of international strategy for Wal-Mart Stores Inc., said the giant retailer will move into Russia in the near future but did not provide specifics.

Just returned from Moscow, Fletcher said Wal-Mart is working to develop a strong relationship with the Russian government, and that Russia is eager to have Wal-Mart stores as a sign of the country’s improving economy and stability.

Wal-Mart does about $9 billion a year in its international stores and opened its 3,000th overseas store last year. The chain’s international stores operate under 40 different names.