Target is taking its popular in-house apparel brand abroad

Target Corp. doesn’t just want to sell its private-label brands to its shoppers. The company is going after customers at other stores, too. 

The Minneapolis-based retailer said it’s expanding sales of the in-house Cat & Jack children’s brand at department-store chain Hudson’s Bay Co. in Canada to include swim, outerwear and shoes, going beyond the apparel products it’s been offering since March. 

Target is broadening the partnership after positive feedback, Christina Hennington, the company’s chief growth officer, said in an interview. The merchandise is driving an increase in the value and volume of purchases in the kids apparel section at Hudson’s Bay, she said. The deal marks Target’s first foray into the wholesale arena, and the new products will be available starting next year. 

The company has received interest from other retailers around the world and is in the early stages of exploring opportunities to sell its products to retailers in Europe and the Americas, she said. Hennington added Target’s US customers remain its first priority, and that the retailer is initially developing its wholesale strategy outside of its home country.

Target’s merchandising is particularly crucial as the company tries to get back to growth following three consecutive quarters of declining sales. Consumers purchased fewer discretionary products due to higher inflation and interest rates. Controversy around Target’s LGBTQ-themed products further weighed on the business. Executives said earlier this year that they expect comparable sales to turn positive in the second quarter. 

The strategy to sell store brands at other wholesalers is uncommon in the retail sector. Private-label products, which are typically cheaper than branded items, bring in higher margins and boost loyalty among shoppers. That has prompted retailers including Walmart Inc. and Kroger Co. to expand their private-label offerings in recent years. 

Target says customers buy more than 300 million Cat & Jack items every year, generating about $3 billion in sales. All together, Target’s in-house names represent more than $30 billion in annual sales — nearly a third of the company’s total revenue.

Target has been expanding its existing store brands, while starting new lines. At the same time, it’s leaning into exclusive products with national names, such as an exclusive Diane von Furstenberg collection and Stanley brand tumblers, to drive traffic and sales. 

Longer term, it’s hoping that a wider network of stores and a revamped loyalty program will also help boost performance. The retailer plans to open more than 300 new stores over the next decade and renovate most of its existing locations. It launched a paid membership program called Target Circle 360 in April to compete against those at larger rivals Amazon.com Inc. and Walmart. 

The Hudson’s Bay deal marks a return to Canada for Target, which exited the market less than two years after opening its first stores due to ballooning losses. The company declined to disclose sales figures for the wholesale deal so far.