Target’s efforts to get back to being known as “cheap chic” are working. The retailer said the apparel category reaped the most “dramatic” market share gains in the latest quarter indicating that apparel sales were up more than 10%, which also helped strengthen Target’s profit margins.
Target’s efforts to get back to being known as “cheap chic” are working. The retailer said the apparel category reaped the most “dramatic” market share gains in the latest quarter indicating that apparel sales were up more than 10%, which also helped strengthen Target’s profit margins.
The retailerhas launched dozens of in-house apparel brands over the past three years, such as “A New Day” for women, “Auden” for lingerie and Goodfellow& Co. for men. They’re all reasonably priced, with guys’ winter sweaters selling for under $30 and a women’s party skirt for $27.99.Notably, Target is succeeding at a time when others are struggling to sell clothes.
“I think our commitment to our new store operating model, where we have dedicated business owners in that apparel category is really driving great results,” Target CEO Brian Cornell said. Cornell went on to call apparel, for Target, “one of the highlights of our quarter if not for the entire year.”
And the CFO Michael Fiddelke explained that apparel is “really healthy on the margin line” because it is selling more clothes at full prices, even at the end of the season.
During the latest quarter, Target generated some buzz with its “20th Anniversary Collection,” which celebrated all of the designers the company has partnered with in the past. Shoppers flocked to Target to scoop up Lilly Pulitzer dresses, Missoni sweaters, Phillip Lim tops and Hunter accessories.
Cornell said the anniversary collection’s drop has been driving footsteps to stores, but overall the collection’s contribution to Target’s apparel sales gains during the quarter was “really immaterial.”
Target shares by November 20th, 2019, up more than 14%, hitting an all-time intraday high of $127.20. The stock has rallied more than 90% this year. Target’s market cap is now roughly $64.6 billion.
