• Women’s Wear Daily, Thursday, January 31, 2008 12 PM

As the economic downturn squeezes its aspirational low- and moderate-income customers, Target faces the task of replacing a major revenue generator for its clothing business: designer Isaac Mizrahi, who is becoming creative director for the Liz Claiborne brand. Mizrahi's line did about $300 million at Target and analysts estimate the retailer will have to replace $400 million to $500 million of lost revenue upon his departure, given that shoppers buying Mizrahi clothes also bought other products while there.

Meanwhile, Wal-Mart has tweaked its George collection to give it more currency and is selectively expanding its fast-fashion line, Metro 7. The company is also zeroing in on the under $10 price point for apparel. And this week it confirmed that it was fortifying the areas of brand merchandising and buying with a goal, as a spokeswoman put it, "to strengthen the relevance of apparel for our customer and the speed of product to market."

The refocusing at Wal-Mart comes as retail experts say Target lost traffic over the holiday season, a trend that may continue, given its strong focus on soft goods and home decor. "Wal-Mart has a much greater commitment to grocery than Target, and grocery does better when times are lousy," says consultant Mark Lilien.

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