Dive Brief:
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Target has expanded its nearly decade-long partnership with Levi's by offering the denim brand's Red Tab products for men and women online and in more than 50 stores nationwide.
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Since 2011, Target has sold Levi's Denizen line, a lower-priced offering developed for the Asian market the previous year. Red Tab products have been available in select stores "near college campuses and highly-trafficked urban locations" and online since Sunday, according to a Target corporate blog post.
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Levi's began using the red tab in 1936 as a sign of authenticity and has assiduously defended it as a trademark ever since, according to the Levi's website. Target's Red Tab assortment includes jeans, tops and jackets, according to the blog post.
Dive Insight:
Target is capitalizing on Levi's endurance as well as its current popularity by offering the denim brand's signature Red Tab line. The discounter in a corporate blog post said that Levi's is one of the most searched denim brands on its website.
Levi's, which went public this year, saw second quarter net sales rise 5% year over year to $1.3 billion, with revenue up in all major regions. Operating income was down 19% as planned advertising and promotion costs offset windfalls from increased sales. Net income fell 63% year over year to $28.5 million, mostly due to expenses related to its IPO.
The move also demonstrates Target's ability to attract customers who are interested in spending a bit more for higher quality, a sign of confidence in a retail environment that continues to see consumers focused on value. The retailer is expanding its number of small-format stores, with plans to open 30 or so each year for the next few years, focusing on cities and college campuses.
In May, Target reported first-quarter sales rose 5.1% year over year to $17.4 billion as comparable sales grew 4.8% and digital comps grew 42%, accounting for 2.1% growth in overall comps. Target's same-day fulfillment services drove "well over half" of that digital sales growth, according to the company. Operating income for the quarter rose 9% to $1.1 billion, and net income was $795 million, an increase of 10.8%. The mass merchant said savings in technology and cost controls helped it reduce expenses by offsetting wage increases.
"This partnership is a great example of how Target continues to offer a curated assortment of highly relevant and premier national brands like Levi's®, while also differentiating ourselves by offering only-at-Target brands that we create just for our guests," Target Executive Vice President and Chief Merchandising Officer Mark Tritton said in a statement.