• , Friday, February 22, 2008 11:30 AM

Two days after Wal-Mart said early spring sales of its private label apparel--where key items cost $10--were "very promising," Target's stock fell yesterday after a Citigroup analyst found fault with its women's offerings. Deborah Weinswig points to a lack of focus in the firm's women's fashions, risk in its credit card portfolio and the perception that Wal-Mart is the discount price leader.

Wal-Mart has a number of changes in the pipeline that should keep up the pressure on its smaller discount rival. Over the next several months, it will introduce Ocean Pacific and L.E.I. fashions to its stores, and it is also gearing up investment in "growth businesses," including athletic apparel and shoes and licensed goods. And sources say there are more deals in the works to bring major brands in as proprietary labels.

There is a growing sense Target's women's apparel business--which accounts for 11% of total sales--is in need of a makeover. Weinswig says key brands, such as Mossimo, Merona and Cherokee, are duplicating each other's offerings and that management has put more emphasis on brand panache than quality. The firm's successful collaboration with Isaac Mizrahi also is wrapping up this year.

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