Minneapolis—“We think it’s going to be successful across the board,” Gregg Steinhafel, chief executive at Target told retail analysts in December about the special holiday gift collection, a collaboration with Neiman Marcus and some 50 fashion designers. “”It’s just a matter of how you want to gauge success, is it hours, or days, or possibly a week–which might be a stretch.”
But what promised to be the ultimate in “masstige” retailing apparently had less than spectacular results. Three weeks after the collection’s debut Target cut prices on the entire collection and then on Jan. 1 slashed the entire collection by 70%. Neiman Marcus also had the collection on its website at 70% off.
While Target hasn’t publicly commented on the Target + Neiman Marcus Holiday Collection, retail analysts for the most part called the latest “cheap chic” merchandise ploy a failure.
Most of the criticism centered on the fact the collection, which included merchandise ranging from a bicycle to cookie cutters, didn’t represent products, such as apparel and accessories that the participating designers are known for. Some consumers posted comments on Facebook saying the pricepoints were too high for Target merchandise. Calling the collection “under designed and/overpriced,” one said: “I never found that ‘gotta-have’ item.”
Martha White of Time agreed that there was a disconnection between the participating designers and the holiday gift merchandise.
“Some complained that designers like Tory Burch and Diane von Furstenberg, known for their distinctive clothes, turned out thermoses and yoga mats (respectively), instead. Oscar de la Renta—who outfits celebrities in red-carpet looks—offered pet accessories: dog bowls and rhinestone collars,” White said.
While the collection may have faired better at Neiman Marcus where the full retails are relatively inexpensive compared to that store’s prices, consumers complained about items were made in China.
Poor Merchandising in Stores and with Online Execution
Deborah Weinswig, retail analysts at Citi, also took Target to task in her report: “Don’t Believe the Hype: Target + Neiman Marcus Holiday Collection Disappoints.” She said Target may some tactical errors, too, originally stocking the collection at the back of its stores and doing a “sloppy job” with visual merchandising.
Last week, Daniel Binder, retail analyst at Jefferies & Co., downgraded Target shares, noting several holiday mishaps including the holiday gift collaboration, which he referred to as “a flop.”
“While we had high hopes for Target this season, we believe the company continued to struggle in a few areas, including poor online execution, soft December sales, poor results with the Neiman Marcus merchandising initiative, increased price competition (greater price matching) and more markdowns,” Binder said.
Target reported Jan. 3 that its December comparable store sales were flat (Total sales rose 0.8% to $10.1 billion).
Retail analyst Carol Spieckerman told Pioneer Press that launching its latest cheap chic collaboration during the highly competitive and promotional holiday season was a risky venture.
Nonetheless, Spieckerman said Target still benefitted from the collaboration. “It depends on how you define success,” she said. “Of course, you want to sell product, but it also creates impressions, driving traffic to the stores, creating more brand impressions … there’s a lot of things that you really can’t measure, but offers a nice halo effect going forward.”