Target will soon have another brand to dangle as the discounter tries to convince more shoppers to buy clothing and other discretionary merchandise — Champion.
On Wednesday, the cheap chic retailer announced that it’s struck a multi-year deal with the sportswear brand long associated with hoodies and sweatpants. Authentic Brands Group bought Champion from HanesBrands last year.
Starting in August, Target will carry an exclusive line of more than500 items from Champion in most stores and online, including apparel for adults and kids, sporting goods, accessories and bags. It will also have a limited-time collection of varsity-inspired apparel for women and men from Champion in September. Most items will cost less than $40, the company said.
Target’s deal with Champion comes as the Minneapolis-based retailer tries to rev up its stock performance and its sales, particularly in more profitable categories like apparel and home goods. The company raised its sales forecast for the fiscal fourth quarter, but not its profit outlook, as deals drew holiday shoppers in November and December.
The big-box retailer said in January that it expected comparable sales in the holiday quarter to grow by about 1.5%. The metric includes sales on Target’s website and stores open at least 13 months.
For Target, apparel trends turned positive year-over-year in the fiscal second quarter. The category’s sales decelerated by about 4 percentage points sequentially in the fiscal third quarter, but company leaders blamed challenging weather and called out strength in its women’s apparel business.
Momentum with apparel sales contributed to the company hiking its holiday-quarter sales forecast in January, Chief Commercial Officer Rick Gomez said.
Target will report its full holiday-quarter results on Tuesday.
The results will come as shares of the retailer have fallen about 16% over the past year compared to the S&P 500’s roughly 17% gains during the same period.
In an interview with CNBC, Gomez said shoppers have remained selective after years of feeling pinched by inflation. Yet he said Target has attracted customers’ attention and dollars with fresh items.
For example, he said, customers responded in November when Target started selling leggings from All in Motion, which came in bright colors and glittery patterns, for $25. Shoppers also responded to the redesign of bras for Auden, its intimates and sleepwear line, he said.
“When we have newness with style, on trend, at affordable prices, the consumer is willing to shop,” he said.
Target has long used brand collaborations as a competitive differentiator. It has long-term partnerships with Levi‘s, Ulta Beauty and Kendra Scott, and hadlimited-time collections with other brands, such as Diane Von Furstenberg.
It’s not the first time that Target has carried Champion. The big-box retailer sold C9 by Champion for about 15 years, but replaced it with All in Motion, Target’s own brand of workout clothing, in 2020.
Gomez said the new Champion line will have a more fashion-forward feel, premium fabrics and unique details, like the Champion logo in Target’s signature red. It’s made up of sportswear that’s designed to lounge or live in, rather than performance wear meant for the gym, he said.
Items will cover a wide range, including baseball caps, sweatshirts, skorts and duffel bags. And the limited-time collection will include merchandise like a varsity-themed cardigan sold with patches that customers can add to customize their look.
Target draws about 15% of its annual sales from apparel and accessories, according to the company’s fiscal 2023 filing, which is the most recent available.
For the past two years, the apparel category has been on a bumpy ride, said Kristen Classi-Zummo, industry analyst at market research firm Circana who specializes in fashion and apparel. Consumers pulled back on purchases because they had refreshed their wardrobes at the end of the Covid pandemic. Then, she said, spending took a hit in 2023 as households looked for ways to trim the budget because of higher prices of necessities like groceries and housing.
Apparel sales totaled $240.6 billion in 2024, down 2% year over year, according to Circana data. That’s up about 6% compared to pre-pandemic 2019. Yet it’s a sharp contrast from 2021, when sales jumped 32% year over year.
Classi-Zummo said U.S. consumers have tended to look for ways to save on basics, such as new pajamas and underwear, and splurge on trendier statement pieces. For example, she said, men’s underwear packs under $20and women’s denim over $150 have both driven sales growth, according to Circana’s analysis.
“They’re being very strategic about where they’re spending,” she said. “It’s really about what they find value in and some may find value in investing in things people notice.”