They may make an odd couple, but discounter Target and luxury merchant Neiman Marcus are jointly offering a limited collection spanning from fashion to sporting goods for the winter holidays.
More than 50 products from 24 designers, including Oscar de la Renta and Diane von Furstenberg, as well as younger designers such as Derek Lam, will be available at both stores and on their websites starting Dec. 1 until they sell out. Items in the collection will cost from $7.99 to $499.99, but most will sell for less than $60.
"We definitely have our differences," Kathee Tesija, Target's executive vice president of merchandising, said of her company and Neiman Marcus. "They're high end, and we're mass appeal. But we both love design."
Target pioneered the idea of low-price chains teaming with designers to create limited-time, affordable versions. It made headlines last fall with the bungled launch of a lower-price collection from Missoni that was so intensely anticipated that Target's website crashed for almost an entire day, angering customers and leading to order cancellations.
But the partnership with Neiman Marcus is unprecedented. Target sells $25 dresses and generates almost half its revenue from staples like food and detergent, while Neiman Marcus has cultivated a reputation for expensive fashion, selling $1,000 shoes and $3,000 handbags.
Now, both want to grab a new segment of customers who are increasingly shopping around, checking out both higher- and lower-price stores. Target, whose sales growth has been uneven since the recession, is seeking new ways to boost its fashion image. And Neiman Marcus, whose affluent customers are back to splurging, needs to step outside its comfort zone to stay competitive. So it has to introduce itself to people who never considered shopping at the store where they can discover it also sells more affordable items for under $100, company executives said.
Both companies say they share a passion for design and cite one another's strengths. Target praises Neiman Marcus's long-standing relationships with designers, while Neiman lauds Target's ability to sell massive quantities of products of high quality.
Wanda Gierhart, senior vice president and chief marketing officer at The Neiman Marcus Group, described the partnership as a "modern approach" to cross-shopping.
"Customers love innovation, and they want a surprising shopping experience," she added.
Target, with more than 1,700 stores, and Neiman Marcus, which has 42, have been trying to work together for a couple years, but nothing gelled until Neiman Marcus suggested a holiday collection, Gierhart said. It took just about a week to get the 24 designers in tow.
A 50-member team of executives from both companies developed the collection, traveling from Target's Minneapolis headquarters to Neiman Marcus's in Dallas to the offices of designers in New York. The collection will have its own area in each store, though the shops at Neiman and Target won't be exactly the same.
Details of the shop design and location are still being worked out. And the collection itself will remain under wraps for shoppers until this fall, with a joint TV, print and social media campaign to start in November. But the companies said some of the items feature leather, hand-done beadwork and hand-blown glass.
Neiman Marcus and Target said their shoppers already overlap, with loyal Neiman Marcus customers going to Target not only for food but to pick up fashions, like affordable versions of Missoni and Jason Wu to add to their original designer versions.
"We feel it's such an incredible assortment that customers from both ends of the spectrum will want it," said Gierhart.
Alison Jatlow Levy, a retail strategist at consulting firm Kurt Salmon, applauded the strategy and said the collection should appeal to designer brand enthusiasts who are interested in collecting novelty products at varying prices.
"These designers have inspired a cult-like following," she said."
Executives declined to comment on how much each retailer invested in the project.
The collection is expected to be in high demand; some items could sell out anywhere in just a couple days, executives said. This time around, however, shoppers will be allowed to buy only a limited number of each item, though Target spokesman Joshua Thomas said the number hasn't been set.