Target (NYSE:TGT) is ending its partnership with supplier Cherokee after two decades. The big-box retailer is planning on filling the void with a newer children's label.
The severing of ties will hit Cherokee hard, as 43 percent of the company's total revenue was from Target last year, reported The Wall Street Journal. And for Target, the brand brought in more than $1 billion in annual sales last year.
Brands under the Cherokee name include Liz Lange and Tony Hawk. The company will continue to sell Liz Lange maternity wear for the time being and does not expect to take a big financial hit in 2016 due to the loss of the partnership.
The change in children's wear is one of many initiatives under the new leadership of CEO Brian Cornell. When Cornell joined Target last year, one of his goals was to refocus the retailer's style and fashion categories—along with baby and wellness—to appeal to a younger and more diverse customer. It seems Cornell's changes are having an impact, as the company reported a 52 percent increase in profits to $635 million in the first quarter.
"As Target prioritizes signature categories, including kids and baby, we are looking at our business in new ways," Stacia Andersen, Target's senior VP of apparel and accessories told The Wall Street Journal. "We look forward to building on an already strong foundation, and are excited to introduce several new brands in the future."
-See The Wall Street Journal article
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