As Target Celebrates 25 Years of Designer Collaborations, Fashion Takes a Backseat

Target, a pioneer of cheap-but-chic fashion, will commemorate the 25th anniversary of its design partnerships with an upcoming collection with Diane von Furstenberg, the company announced Tuesday.

Von Furstenberg, or DVF as she’s affectionately known by both fans and fashion insiders, is famous for her colourful printed wrap dresses, an American fashion staple that she introduced to the masses in the early 1970s. The Target collection, which she designed alongside her granddaughter and co-chairman of the company, Talia von Furstenberg, will include the iconic silhouette as well as 200 other products in fashion, beauty and home, including made-to-order furniture.

DVF is perhaps the most recognisable name in Target’s recent slate of collaborators, which include preppy streetwear brand Rowing Blazers and New York-based indie labels Fe Noel, Victor Glemaud and Sandy Liang. But while the brand has legacy, it lacks heat — or hype, in the words of the young consumers and tastemakers that Target had successfully wooed for many years with its buzzy tie-ups. After reaching the brink of bankruptcy, DVF significantly scaled back production in recent years in a bid to regain profitability.

Target, too, has struggled to capture momentum in the apparel category, sales of which have shrunken for more than a year. Most recently, in the third quarter of 2023, in-store sales for apparel declined high single-digits. The trend is in line with the retail industry at large as price-conscious shoppers pull back from discretionary spending, and as some young consumers opt for ultra-fast fashion platforms like Shein and Temu.

As a result, Target has pivoted its focus from non-necessity segments including fashion and home towards groceries and household essentials, which includes beauty and wellness. Last month, the retailer announced a new lineup of wellness-focused products such as workout gear, supplements and skincare.

“If you look at Target’s strategy, they’ve been betting more on beauty and essentials, where they’re being more flexible on price points and where their customer is spending,” said Jessica Ramirez, an analyst at investment-research firm Jane Hali & Associates. “Their focus is not to fully drive apparel right now.”

Under Target’s resigned approach to apparel, a collaboration with an established label like Diane von Furstenberg could make more sense commercially, Ramirez added. Notable past design partnerships include Alexander McQueen, Proenza Schouler and Rodarte.

“The timing with the 25th anniversary seems so relevant just given her history,” said Target executive vice president and chief merchandising officer Jill Sando of the DVF partnership. “Twenty-five years ago, we really set out on this mission to make aspirational designs affordable, which is what we’re doing with Diane.”

Target may be seeing softness in apparel in recent quarters, but the business still generates 16 percent of its annual revenue — about $17 billion. Despite macroeconomic challenges, there are ways for the chain to improve its fashion offering, analysts said. Its biggest competitor, Walmart, has set out to revamp its apparel department in recent months through store renovations and brand expansion. So far, the results have been promising.

Target is working on providing newness to its consumers in the form of more frequent product drops, according to Sando. “We know that our guests [and] their wallets are pressured and we know that they’re looking for the newest trends,” she said. Target is now faster with its supply chain, and offers a wider breadth of product, Sando added.

The retailer has an opportunity to tie these drops to its areas of focus, namely with athleisure, which can be merchandised with wellness and beauty products, according to Oliver Chen, analyst at TD Cowen.

Ultimately, Target must reinvigorate its private labels with distinct branding and a product niche, said Chen.

“It’s hard for me to articulate what each of their labels stand for,” he added. “They need to stand for certain categories, like athletic apparel, denim and dresses, where there are opportunities.”