Missoni Launch: Success or Missed Opportunity for Target?
By Jessica Golden, CNBC.com
Target shoppers went mad for Missoni this week, and the fallout from the frenzy is still being felt days later.
Shoppers rushed in to buy items from the 400-piece collection from the Italian fashion house, which went on sale Tuesday. The limited-edition piece sold out in many stores in a matter of minutes and so many customers rushed to the company's website that it crashed several times.
Now, more then 30,000 Missoni for Target items are being resold on eBay at a steep mark-up. Other items have found their way to other secondary markets such as Craig's List.
"They should probably be calling it Missoni for Target for eBay," says one observer on Twitter.
Designer Margherita Maccapani Missoni urged shoppers today to avoid the items on eBay.
"You guys! very silly to buy #missonifortarget on eBay for 3 times the price!! For that money go out and get M Missoni and you'll avoid looking all the same," she tweeted to her more than 14,000 followers.
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The items in the collection range from colorful dresses to shoes to kitchen items, and the mark-ups have been significant. Even the Missoni bike, which was originally being sold for $399, is now being sold for as much as $1,000. "This is a collector's item!" reads some of the listings on eBay.
But even with the markup, the prices for the resold items still are often less than what Missoni products list for in high-end department stores.
Target spokeswoman Courtney Foster says the retailer's site is now running at full capacity after the "unprecedented launch" of the Missoni line, which increased demand to levels greater than a typical Black Friday for the discount retailer. Black Friday, the day after Thanksgiving, is known for big sales and promotions and often can be the busiest day in a retailer's calendar.
"Clearly this is a great success. It drove a ton of traffic into their stores, and significant online demand. I would say mission accomplished," says Jeffrey Klinefelter, a retail analyst for Piper Jaffray who covers Target.
Fashion experts say they are not surprised by the buzz and popularity of this collaboration.
"This incredible iconic brand is now available to the masses and it's a collectors item. You no longer have to go to Milan to buy it - you can go to Target," says fashion reporter Jayne Chase. "It's win-win," she says.
The Missoni family say they were first approached by Target for the collaboration more than a year ago.
"Target has always had a very special eye for design compared to the competitors. We have been fans of the past collaborations so when we were approached by them we were enthusiastic," Missoni says.
Although some have criticized Target for the short supply, saying it was a missed business opportunity, others believe the move may have been intentional.
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Brian Sozzi, senior research analyst at Wall Street Strategies, says the limited supply may be intentional scarcity marketing conducted by Target.
"Their marketing guys are smart and have been around these power launches before. I wouldn't be surprised if they planned for this and have inventory in back rooms" he says.
Planned or not, what kind of impact is this collection going to have on Target's bottom line?
Experts say it will not likely change Target's financial trajectory but it has certainly drawn attention to the store.
"People who may not have shopped in Target were brought in by this event, maybe bought something besides Missoni and will hopefully come back," says Klinefelter. He also adds that Target was able to leverage their brand with a higher income demographic, something they haven't been able to acoomplish in years.
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As for the Missonis, right now they are just overwhelmed. They attended theopening of the a temporary store that was opened up in Bryant Park during New York City's Fashion Week celebration last Thursday. When they arrived at the store, hundreds of people were waiting in line to get their hands on their collection. Merchandise at the store sold out in a few hours.
"We have been copied or inspired by so many designers over the years, we really want people to know that it is us" says Angela Missoni, Margherita's mother and creative director for the Missoni brand.
