Target To Test Apple 'Store Within Store'

Target gathered press in New York City Thursday to reveal a new retail concept in an effort to re-invigorate the "cheap chic" concept it has done so well in years past.

However, news of another kind stole some of the impact.

Target Store
Target Store

During the question and answer period, we asked about the rumored Apple store-within-a-store concept at Target .

Target executives said the retailer it is looking at a test with Apple in 25 stores offering a unique display and different assortment.

Target's job is to delight and surprise customers and it's hoping its "Shops at Target," the main focus of Thursday's announcement, will do just that.

Target reported a weaker-than-expected 1.6 percent increase in same-store sales for December as the retailer continues to fight for consumer dollars in a highly competitive retail landscape.

Target said Thursday it is collaborating with owners of five specialty shops from around the country, from California to Connecticut — The Candy Store, Cos Bar, Polka Dot Dog Bakery, Privet House and The Webster — to create a limited collection of unique products.

Consumers can find these products in Target stores and online starting May 6, for six weeks. The products range in price from a dollar to nearly $160 and vary from baked goods for dogs to decor for your home.

Target says the specialty shops will resemble store-within-a-store concepts and will be located in different locations about its "racetrack" (which is what the retailer calls its circular main aisle throughout stores).

Executive said this is just the first incarnation of collaborations with specialty shop owners from around the country in Target's quest to bring unique products to the mass market, making the inaccessible more accessible, everyday.

Analysts will carefully watch sales and consumer response for the initial five partnerships to set the pace for further rollout.

MKK Partners Patrick McKeever tells CNBC he thinks the collaborations are a real win for Target.

“I think it's another real coup for Target in its ongoing effort to differentiate itself versus Wal-Mart and some other retailers…I think it will have a nice positive impact on sales,” he says.

McKeever believes sales will improve in the 4 percent to 5 percent range in January and February for Target, and maintains his $61 price target. He also cited the announcement from Target that it will buy back $5 billion worth of stock once its current $10 billion stock buyback program ends this year.

When Italian fashion house Missoni created a limited collection for Target, the retailers' website crashed with the unprecedented volume.

Target tells us many lessons were learned from that experience. It hopes the demand is as strong for the "Shops at Target" products as it was for Missoni for Target, and that fixes made will maintain the website's performance this time around.

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