Frugal fashion comes to discount stores

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.”

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