Will Target’s Exclusive Offerings Drive Its Top Line Higher?



Exclusive brands generate strong sales

One of the key catalysts behind Target’s (TGT) top line returning to growth is its focus on differentiated product offerings. These exclusive “only-at-target” brands generate strong growth, besides strengthening its product portfolio. For instance, the company’s kids-oriented brands including Cat & Jack and Pillowfort continue to witness strong demand. The company’s kids clothing brand, Cat & Jack, went on to generate more than $2 billion in sales in the first year of its launch.

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A look at new brand launches

Besides Cat & Jack and Pillowfort, the company’s other exclusive brands including Cloud Island, Isabelle, Goodfellow, A New Day, JoyLab, and Project 62 are also resonating well with shoppers and are expected to generate strong sales.

In January 2018, Target launched Universal Thread, a denim-based women-centric lifestyle brand within the price range of $5.00 to $39.99. Universal Thread is priced approximately 10% below the company’s current offerings. More recently, Target unveiled Opalhouse, its new “eclectic” home brand with a wide variety of furniture, bedding, and home décor items mostly under $30.

Alongside its own home brands, Target entered an exclusive partnership with Magnolia and launched Hearth & Hand, a home and lifestyle brand with items ranging from $0.99 to $129.99. Most of these products are priced under $29.99.

The company’s value pricing and wide varieties are expected to accelerate its sales in coming quarters. However, competitors aren’t sitting idle. Recently, Walmart (WMT) offered a glimpse of its redesigned home shopping page on Walmart.com and is focusing on exclusive brand launches and its revamped website aimed at driving its e-commerce sales higher. Meanwhile, Amazon (AMZN) has also ramped up its home furnishing offerings.


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