Is Paul Frank Monkeying Around With Target – Or Using Retail Leverage?
- Aug
- 12
- Posted by Ben Smith
- Posted in Blog, By Ben Smith, Examples of Leverage, Pent-Up Demand
By Ben Smith
If you recognize the Paul Frank kids brand you probably associate it with monkey faces and dollar signs. The only places I ever recall seeing Paul Frank clothing were kids boutiques, ads in modern magazines such as DWELL, and in pictures of celebrities kids in US WEEKLY. So I was shocked and delighted to see Paul Frank kids pop up in Target recently (as featured on a back cover ad in US WEEKLY, shown below).
So what does Paul Frank have to do with Retail Leverage? This is a classic example of Rule #4 of How To Get Retail Leverage:
“Bring Pent-Up Demand” to Stores.
My guess is that Paul Frank decided that venturing outside of premium retail / boutiques was a necessary risk in our current economic environment, as consumers have backed off from purchases in that class of trade. Paul Frank is going where the customers are, at the most palatable place they could have gone in mass market – Target.
I am willing to bet that that there is high awareness of Paul Frank by Target’s core customer – the stylish mom – many of which at Target are also cost conscious. So they probably haven’t bought their kids Paul Frank clothes before – but they will jump at the opportunity once they stumble across the endcap or ads.
It seems like a great match – Target has a strong track record with clothing brands that were perceived to be premium-chic such as Isaac Mizrahi and Mossimo. I’m not sure of Paul Frank’s brand awareness with the general population, but I’m willing to bet that it skews significantly higher with Target’s core customer.
Short term this feels like a home run. Paul Frank gets distribution in 1500+ stores and expands the reach of its brand without completely selling out. I would expect a large percentage of the same moms who bought Paul Frank from boutiques also shop at Target. Target gets an advantage in kids clothing over its competitors and potentially expands its customer base with the appeal of the Paul Frank brand. I don’t know what the limit is for sales from Paul Frank at Target, but Target was doing approximately $300 Million a year on its Isaac Mizrahi line.
Long term I’m not so sure – it depends on how successful Paul Frank is at Target, and where Paul Frank wants to go with the brand. One thing for sure is that if Paul Frank is successful they will have Retail Leverage with Target. Brands like Paul Frank, Isaac Mizrahi, and Mossimo are key differentiators vs Walmart. Target was dealt a huge blow when they lost Isaac Mizrahi to a higher bidder. I don’t think Target would let Paul Frank get away as easily if they are a huge success.
The lesson here: the Retail Leverage concept extends beyond Consumer Electronics and Consumer Package Goods. You have to give something to get something and partnering with a major retailer such as Target has the potential to be beneficial for both brands. Sure there is probably more risk on the side of Paul Frank – but if they are successful the balance of power will shift to them, and they will get paid when it is time to re-negotiate.

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Although I have never worked for a boutique, premium brand, I am sure every one out there, both in consumer goods, packaged goods or electronics struggles with how “mass market” to take their plans. Volume vs. margin %. Where is the optimum profit made? Going from 75% margin to 50% or even to 25% margin levels might make a lot of sense (cents), or might not, depending on the volume trade-off. Risky yes, but to a sales guy at heart like myself….I say…make it up in volume! Go Mass, Go Big or Go Home!
Scary to “sell out” to mass when you’ve worked so hard to bring in premium retail prices for your silly monkey face logo… but only Target has the cred to bring it mass without cheapening it totally. They have created a whole new “fine line”. And kudos to them. Walmart would kill for that.