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Frugal fashion comes to discount stores

Big designers create fashions for regular people at reasonable prices
/ Source: Forbes

Behnaz Sarafpour is noted in the fashion world for her refined yet feminine frocks, and this fall she is feeding the frenzy for dresses. Her ready-to-wear collection includes a mod black mini accented with black lace and a lush, green velvet number that plays up the voluminous skirt style that has been so important these past few seasons.

Of course, Sarafpour’s covetable creations are available only to women willing and able to drop $2,000 for a dress — but not for long.

Enter Target. The mass-market discount store has scored with its GO International Collection, a series of designer collaborations that bring high fashion to the masses. It began with Brit Luella Bartley and most recently featured French designer Sophie Albou’s label Paul & Joe. Sarafpour is the next in line, and her capsule collection will debut this November, just in time for the holiday party season.

Each collection lives at Target for a buzz-inducing 90 days. Sarafpour’s collection is on the outrageous side of cheap — ranging from $7.99 for an embellished headband to $89.99 for a leopard print faux-fur coat.

Though the prices for customers are low, the payoff is potentially huge for the designers. With Target, Sarafpour will reach the broadest audience of her career, which up until now consisted of a well-received collection established in 2001 and a tremendous amount of support from the Council of Fashion Designers of America. Whether such partnerships are a big hit for the bottom lines of retailers is an open question.

“For the retailers, it’s about elevating the perception of their brand for the consumers,” says Marc Beckman, president and co-owner of New York-based Designer’s Management Agency. He has brokered many designer-retailer partnerships, including those between Jones Apparel Group-owned Nine West and Vivienne Westwood, Easy Spirit and edgy Imitation of Christ designer Tara Subkoff, and Laura Poretzky’s Abaeté and Payless.

Forbes.com

Sarafpour follows in the footsteps of now-well-knowns including Cynthia Rowley, who created Swell for Target, Todd Oldham, who now designs for La-Z-Boy, and Isaac Mizrahi, yet another Target favorite, all of whom went from designing small collections (even obscure) for high-end retailers to achieving national fame and fortune.

Therecipe — one part high fashion, one part low prices — has appeared to work for retailers like Target in the past, butAndrew Jassin, founder and managing director of the Jassin O’Rourke Group, a strategic consulting network based in New York City, believes there is always a risk in teaming up with an unknown: “Although Behnaz Sarafpour has achieved some level of success in the minds of certain customers and in certain stores like Barneys or perhaps Bergdorf, it’s not a national name and not well positioned as a trademark.”

However, it may have been Sarafpour’s below-the-radar profile that brought her to Target’s attention in the first place. Her former employer, Mizrahi, may be the best example of designer diffusion success at Target. His high-end label, featured in 1995’s documentary “Unzipped,” was shut down in the late ’90s, but after he emerged with a clothing and accessories collection for the mega-store in 2003, he became a household name. He has also returned to high fashion, creating a custom line for Bergdorf Goodman, making frequent appearances on cable’s Style channel and launching his own magazine, aptly titled “Isaac’s Style Book.”

“Who knew who Isaac Mizrahi was before he partnered up with Target?” observes fashion analyst Marshal Cohen of Port Washington, N.Y.-based NPD Group.

“Mossimo is another good example,” he says. “You had to be in the business or you really had to be a fashionista to even know those two names. Somehow, because of the exposure they get, it legitimizes [the concept] because they’re real designers who just happen to be designing for Target.”

In addition to its capsule collection with Westwood, Jones Apparel Group is working with Thakoon and Sophia Kokosalaki for Nine West. It has also penned a deal with bridal gown designer Vera Wang to develop a line for Kohl’s department stores called Very Vera. This is in addition to its 2-year-old Tara Subkoff line for Easy Spirit venture, which has brought name recognition to Subkoff’s Imitation of Christ couture line, as well as a bit of an edge to the borderline-matronly image of the Easy Spirit brand. Even Payless, a company known more for its cheap choices than fashion-forward sensibilities, recently introduced Abaeté for Payless, created by New York designer Laura Poretzky.

And let’s not forget Swedish megabrand Hennes & Mauritz, whose collections from Karl Lagerfeld, Stella McCartney and, coming this fall, Dutch eccentrics Victor & Rolf, are highly coveted by fashion insiders and trendy teens alike.

“It definitely makes these designer names more attainable and more realistic,” says Kathryn Deane, president of the Tobe Report, a consulting firm catering to global retailers. “These are designers that are pushing the fashion business forward.”

Cohen of NPD Group believes that the two front-runners in this market, H&M and Target, share very different motivations (the former desires prestige, the latter desires volume), yet the results are very similar. “What has changed is this: The consumer goes in, buys a $59 jacket, leaves the store, goes around the corner and buys a $300 pair of shoes,” he says.

But Jassin isn’t so sure bringing in a high-end designer will actually result in profit. “It remains to be seen. [Luella Bartley] hasn’t done very much as of yet,” he says.

According to Paula Thornton-Greear, a spokeswoman for Target, the company won’t share specific financial information related to either a specific design partnership or collection. However, their August sales figures do show a 9.2 percent increase, to $4.2 billion from $3.9 billion. Did the GO International Collection factor into this rise?

Mark Husson, retail analyst for HSBC, says that although Target’s reports do not break out into individual areas, “within the overall sales, apparel was not one of the leading categories — was probably at 9.2 percent, or slightly below.”

On the other hand, Mizrahi generated an estimated $500 million in three years by the end of 2005 for Target, and McCartney reportedly penned the deal with H&M in an effort to turn a profit on her then-$39 million business, which is owned by the Gucci Group. Definitive numbers, however, are hard to come by, as both sides (designers and retailers) are unwilling to place the total value of these partnerships on pure financial figures.

Profit aside, these marketing efforts have certainly created a shift in the way we look at fashion. In fact, Cohen believes that collections like Sarafpour’s for Target are the future of fashion.

“We’ve entered into a whole new phase of fashion — affordable fashion,” he says. “It has changed the dynamics tremendously. It’s changed the rules. It’s usually some kind of innovation that does this, but this is clearly by marketing. The consumer responded in an even bigger and better way than anyone ever expected.”