Early this week, Minneapolis based big box retailer Target held its Q4 2018 Target Corp Earnings Call and 2019 Financial Community Meeting in New York City. We had the opportunity to run the “A Bullseye View” interview with Brian Cornell, Target Corporation, Chairman & CEO yesterday, but I wanted to take a deeper dive into the meeting and really see what was said about Private Brand. With more than 1,100 words dedicated to private brand, the meeting is the perfect example of Target’s commitment to private brand.
For retailers and their private brand managers, this should stand as the gold standard for commitment to Private Brand. Every retail executive team must be committed to telling Wall Street about the strategic importance of their private brands and unashamedly bragging about their “own brands.”
Cornell opened with an enthusiastic and optimistic candor that extended throughout the meeting.
“This morning, we announced our most successful year-over-year performance in well over a decade. Our comp sales surged this holiday season, fueled by unprecedented traffic gains, especially in our stores. We closed out Q4 with a 5.3% comp, our strongest finish since 2004, putting Target right in the center of the winner’s circle.”
He went on later in his presentation to glowingly discuss private brand:
“We said we’d deliver more than a dozen new brands in 18 months, and true to form, our team over-delivered by a mile. We’ve introduced more than 20 new brands, and our teams are still growing strong.”
Cornell continued, “we unveiled 3 new brands as part of our full reinvention of our sleepwear and intimates business,” and to reveal the strategic focus for the Target Private Brand portfolio:
- Grow market share
- Attract new guest segments
- Find whitespace
As well as commit to:
- a steady stream of newness and exclusivity
- New brand launches
- new partnerships
- a sharper focus on developing best-in-class brand management
Cornell closed the formal presentation with the same hope an optimism with which he began
“As we carry into 2019, you can expect Target will continue to deliver. We’ll continue to adapt, evolve, innovate, invent. We’ll continue to inspire, and we’ll continue to succeed so that Target will continue to lead this industry for many years to come.”
Which led the questions from the dozen assembled analysts and of course a discussion of private brand. Robert Scott Drbul Guggenheim Securities, LLC, Research Division – Senior MD asked Cornell and team about the rate of new private brand launches going forward and whether they could be comped.
In a more than 700-word answer Cornell and Mark Tritton spelled it out: “We’ve made a major commitment to making sure that we use our own brands as a point of differentiation, that we bring great style and quality to our guests at a great value.” Cornell continued, We’ll be focused much more around making sure we’re managing those brands and building brand management expertise into our teams. But we’ll continue to look for whitespace opportunities and the strength in our portfolio with great own brands.”
Mark J. Tritton, Target Corporation, Executive VP & Chief Merchandising Officer elaborated, “Yes. Change will be a constant, but the velocity will change.” Triton continued, “And so you’ll see a velocity change as we move to stabilize and optimize that assortment.”