Listen to the article
Dive Brief:
Target is partnering with Kate Spade on a limited-edition collaboration spanning women’s and children’s apparel, handbags and home accessories, launching April 12.
With more than 300 items, Kate Spade New York x Target will be one of the mass merchant’s largest limited collections. More than half of the products are being priced at $15 or less.
The announcement comes about a month after Target announced a $4 billion to $5 billion investment in stores, supply chain and technology, part of an effort to top $15 billion in sales growth by 2030.
Dive Insight:
This partnership with Tapestry-owned Kate Spade includes elements Target has become known for, including not only affordability on big-name items, but also extended sizing and adaptive styles.
The collection has been in the works for two years, according to a statement from Target chief merchant Jill Sando.
“With versatile pieces that work for every occasion and can’t-miss prices, this partnership brings together Kate Spade’s signature style with Target’s legacy of making the best design accessible to all,” she said.
Even if it’s successful, however, this collab is unlikely to move the needle — for either Target or Kate Spade, according to Jane Hali, CEO of investment research firm Jane Hali & Associates.
Target itself kept expectations low, with analysts last month noting that the company doesn’t necessarily anticipate share gains from its overhaul effort.
“I have no doubt it will be joyful, because Kate Spade is known for her color and known for her prints,” Hali said by phone. “It should be good, but it’s not enough to change the course of Target’s business.”
That’s because, while the effort adds to their discretionary offer, consumer spending power is mostly dedicated to essentials, she said.
“In Q4 all of the earnings were pretty good for holiday, but that’s totally forgotten because the guidance has been brought down for most retailers and brands for Q1 and fiscal ‘25,” she said. “The reason Walmart is doing better is because of the grocery and the staples — that’s where the customer is going right now, and there’s no competition between Target and Walmart in that regard.”
It’s not clear that the tie-up benefits Kate Spade all that much, either, given the brand’s sales declines and recent efforts to avoid promotions, Hali said.
“It might be good for them, because they have a big outlet business in Kate Spade,” she said. “They’re having difficulty, so the more people who know about the brand, the better. However, this doesn’t seem to be building brand equity.”
