Dive Brief:
- Target has refreshed its SoHo store in New York City and its sports fan shop-in-shops in time for the holidays.
- When it unveiled the first phase of its SoHo store revamp nearly a year ago, the mass merchant said that the renovation would continue to evolve this year. Target last week said it has transformed the store’s lower level, completing the renovation.
- More than 1,600 fan shops featuring merchandise for sports team devotees have been remodeled or newly installed, the retailer said Monday. The shops feature local hometown team graphics and signs, with about double the space and assortment as before.
Dive Insight:
Less than a week after touting that this year customers will find thousands of gifts priced $5 or under, Target is once again stressing affordability, noting that nearly 90% of the items at its fan gear shops are less than $50.
This emphasis is already driving volumes at Target, according to research last month from Jefferies analysts led by Corey Tarlowe. Tariff refunds are providing the company with an opportunity “to further fund value initiatives,” creating a path “to stronger market share gains and upside to both sales and margins,” they said.
“Target's continued price investments reinforce our view that management is making the right decisions for the customer and the business,” Tarlowe said. “Lower prices help drive value perception and volume gains, consistent with our recent store checks, while enhanced newness provides additional traffic drivers.”
Both the fan shops and the SoHo store are also merchandised to suit local tastes and demand.
“The Fan Shops refresh puts two of Target's enterprise priorities into action: leading with merchandising authority and elevating the guest experience,” the company said in a press release.
In New York, many of the spaces are inspired by the city, including the “Bullseye Loft,” dedicated to home goods and featuring “inspiring, shoppable living spaces;” Balance Mart, featuring products for men's grooming, wellness and Korean beauty; and a snack bar that “brings New York streetscapes inside” inspired by neighborhood businesses and stocked with grab-and-go items from emerging brands like Wilde and Cadootz.
The retailer is in turnaround mode after losing much of its “cheap chic” cachet, and that will be tested in Q4. It’s on firmer ground compared to a year ago, when it headed into the holidays hampered by a series of quarterly declines, topped off with Q4 net sales down 1.5% and comps down nearly 4%.
Changes this year under newly installed CEO Michael Fiddelke have included the rehiring of fashion designer Isaac Mizrahi, a new Beauty Studio store experience after its breakup with Ulta and the expansion of its online marketplace.
The retailer’s seasonal prospects appear to be much improved, with Telsey Advisory Group analysts led by Dana Telsey estimating that holiday comps there will grow 3% year on year.
“Target should be among the winners this holiday season ... as it continues its transformation and stays trendy by offering new products,” Telsey said in a Monday client note.
