Couture in Houston for $12.99 and up

Do you crave Mizrahi, Wang and Ralph Lauren? Retailers hope you'll think Target, Kohl's and J.C. Penney

By David Kaplan

Copyright 2007 Houston Chronicle

Published July 30, 2007

A working-class woman can't buy a River Oaks mansion or a 2007 Porsche. But you may see her in sleek new threads from a couture designer.

That's because mass-market retailers such as Target, Kohl's and J.C. Penney are offering an increasingly wide array of designer apparel.

Selling cheap chic apparel isn't just good public relations. It improves the bottom line, especially Target's, analysts say.

"There are a variety of reasons why Target's same-store sales have been so strong month after month, and the designer lines are certainly an element in the mix," said Ken Perkins, president of Retail Metrics, a research group focused on the retail industry.

The strategy has been just as effective for Kohl's and Penney, he added.

Two weeks ago, a fashion line designed by Cindy Greene and Johnson Hartig arrived in Target called Libertine for Target. Items in the line sell for between $12.99 and $39.99.

Kohl's announced a partnership with designer Vera Wang to create a Very Vera fashion line, which is to arrive in many of its stores this fall.

And in 2008, Polo Ralph Lauren will debut an American Living line for J.C. Penney. Chip and Pepper Foster just launched a denim and sportswear collection for the chain. Lines by Liz Claiborne, Michele Bohbot and Nicole Miller are already there.

"It's a very hot trend," said Love Goel, CEO of Growth Ventures Group and a former top executive at Federated. "Now, 100 million Americans have the option of buying better designed things they couldn't buy before."

Rotating strategy

Designer licensing for mass markets is "growing crazy," and shaking up the industry, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York.

And in the case of Target, the designer labels have helped lure some of Wal-Mart's shoppers, said James Goldstein, a retail analyst at Credit Sights.

In May, Target posted a same-store sales increase of 5.8 percent, compared with Wal-Mart's 1.3 percent. In June, Target had a 3.3 percent increase, compared with Wal-Mart's 2.4 percent, according to Retail Metrics. Since 2004, Target has generally been outperforming the sector.

A downside to selling big-name fashion lines is that retailers typically must share the profits with the designer, Goldstein said.

Target, a pioneer in the value-priced designer wear movement, launched its first campaign in 2000, bringing in Mossimo Giannulli and Isaac Mizrahi three years later.

A year ago, Target initiated its ongoing campaign Go International, which offers apparel from a cutting-edge designer, available for a few months, followed by another designer line.

"We work with them to bring a reflection of their design aesthetic to our store at an extremely affordable price point," Target spokesman Joshua Thomas said in reference to Go designers.

Fashion and value

The strategy isn't entirely new.

Levi Strauss, for example, sells lower-priced Signature by Levi's jeans to discount stores and a higher-quality Levi Strauss brand to mainstream department stores.

And for decades, Ralph Lauren has created one line for luxury retailers and another for mainstream department stores, noted Dan Skoda, managing partner of D&R Consulting and former president of Marshall Field's.

"But now designers are taking it further into an even broader base," Skoda said. "The volume they can do now is incredible."

Creating couture-inspired apparel for value-priced stores makes sense for both designer and retailer, Goel said:

"Couture designers can sell only so many $10,000 dresses, but there are billions of dollars to be made from the mass market."

A designer can license her or his name to a Target with little risk, Davidowitz said: "There is little investment, and you have this monster retail machine behind you."

For the discount retailer, the partnership creates cachet, credibility and fashion appeal, he said.

J.C. Penney's exclusive designer lines are a "key differentiator in our customers' eyes," Penney spokeswoman Kate Parkhouse said. They add credibility while combining fashion and value, she said.

Couture and T-shirts

Shoppers seem to like what Target and the others are doing with the designer lines.

"Most of my clothes are from Target. They stay pretty fashionable and it's really great for my budget," said Stephanie Seymour, a 28-year-old sign company sales coordinator.

"You can buy a blouse that is very fashionable, and you don't have to pay $200 for it," said Target shopper Mary Audiffred, 30, a senior sales manager for Broadway Across America.

Audiffred is a fan of Target's Go International program, although she noted: "Sometimes I wish we could see a little more from these designers, but I guess that why they do it: to give us a little taste."

According to Goel, actress Sharon Stone's 1995 appearance at the Oscars was a seminal moment in popular culture and may have helped spark the low-cost designer trend. Stone, a screen siren then, wore a silk-crepe trumpet skirt by Valentino with a black stretch-cotton Gap T-shirt.

Wal-Mart has also been offering cutting-edge merchandise, with less success, Goel said. Wal-Mart is less likely to partner with big-name designers and more likely to sell private label cutting-edge apparel, he noted.

david.kaplan@chron.com

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