Starbucks netted a record $13.3 billion in 2012. But it isn't immune to competition, so the global coffee seller has updated interiors, offered more products and even tapped into couture fashion.
It recently sold several items designed by the small fashion house Rodarte, including a to-go tumbler for $12.95.
Founded in 2005 by Kate and Laura Mulleavy, Rodarte made a name for itself in the 2010 film Black Swan. Actress Natalie Portman's award-winning portrayal of a ballerina was made even more memorable by her edgy, artsy costumes — designed by Rodarte. Neither Rodarte nor Starbucks would comment for this story.
Starbucks is just the latest mass retailer to jump on this designer trend. Joshua Thomas, a spokesperson for Target, says his company has now worked with more than 100 designers.
"It always starts with the customer at Target," Thomas says. "What have they been receptive to in the past? Where are they at currently?"
The retailer started offering lower-priced versions of designer fashions called Go International in 2006. Suddenly, everyday shoppers could buy clothes by names they had read about on fashion blogs and in magazines. Many of the clothes would sell out on the first day. Target's Thomas says it's about staying current.
"We try to one-up ourselves — try to make it new, try to make it fresh," Thomas says.
One partnership that didn't work out as well as others was Target's holiday pairing with upscale retailer Neiman Marcus.
Britt Beemer, who studies consumer behavior at America's Research Group, says a high-end name isn't a sure thing.
"When you bring in an outside designer to do something, it's not their name, it's the product, the look, the design and the merchandising," he says.
Target regulars, Beemer says, didn't think the products warranted the higher prices.
Some Starbucks drinkers are also price conscious. Last year, Beemer says, a lot of people said they cut out trips to Starbucks to save money.
"I'm sure they've lost some volume because of consumers cutting back, so they say, 'OK, how can I sell more to my customers I currently have?' " Beemer says.
But what's in it for designers? They get money and an introduction to a larger buying public.
But Rodarte clothes aren't easy to find, and industry watchers say the company has yet to find a sustainable market for its artful line. Still, the name has cachet with a certain type of customer.
Target employee Grace Brace, 26, of Minneapolis says the collection didn't make her go to Starbucks any more than usual. But while there, she contemplated buying a mug.
"I almost did yesterday but I didn't, and the store is out of them so I can't today," Brace says.
Unfortunately for Brace, the entire collection has sold out at the Minneapolis Starbucks she patronizes.
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