Target Forever Changing As It Moves Cat & Jack to Hudson's Bay
It's a solid idea to move their best own brand Cat & Jack, and perhaps inevitable given Target's position:
Target looks to resolve two problems in its portfolio at the same time:
* How to expand in Canada if it can't implement an ERP system properly (RIP Target Canada) 😂 , and
* How do we grow our revenues if traffic has flatlined at Target stores?
I knew there was a hint of this at the Earnings Call last week. The company spent a half an hour with the merchandising team talking about the size of its own brands, its design expertise. You would think you were hearing from a brand owner, but instead you were hearing from the owners of the various category lines about the skill and capabilities of their own brand portfolio. If only AllBirds had that same expertise with their recent issues.
Target own brands are famously great, and are a key reason people shop at Target in-store and online. So when Target has announced that Cat & Jack, its flagship own brand at $3B a year in sales is going mainstream, you sit up and take notice.
With its introduction into Canada, Target is doing two things. Testing in an important retailer, but not one of the top ones. Second, it is reintroducing a brand into a market that does not have access to the product today. Cat & Jack will have a dedicated display in the store, and also present online.
It seems that this charts a new path for both companies. Target is looking to access new customers and markets to grow its own brand sales off-Target. It's a smart avenue.
As far as the Bay is concerned, they have been troubled of late, and a new CEO returned to the helm at the end of last year, Liz Rodbell, a former President and former Chief Merchant. It's not hard to imagine that the former merchant wants to start with the most important aspect of retail to get right: the product.
I would expect more expansion from both companies along these lines.
Just don't expect Target to ever put up Cat & Jack on Amazon or Walmart ;-)
