Where Target Is Always 'Tar-zhay'

The strategy has driven sales growth at stores open at least one year, a key measure in retail, that consistently outpaces that of its chief rival, Wal-Mart Stores Inc. Last month, Target posted a 5.7 percent increase in sales at those stores, while sales at Wal-Mart stores rose just 2 percent.

Misher said he pitched the idea for Target Couture to the company two years ago. Target agreed to the deal, though it declined to disclose details. Brand Central oversees production and distribution.

Jaye Hersh, owner of Intuition, is heading up the creative side of the project. She wanted the line to convey a cheeky and fun attitude but still be wearable. Some designers were reluctant to participate in the project at first. After all, Target is a discount store.

"It's kind of that fine line," she said. Designers think: "I sell to Neiman Marcus. Is that going to affect my business?"

Hersh signed J & Company for denim, Lizzie Scheck Jewelry, Madeline Beth for accessories, Mighty Fine for T-shirts and Raw 7 for cashmere. The launch party last month at the exclusive Los Angeles club Social Hollywood drew actresses Anne Heche and Gabrielle Union wearing the line.

Hersh said the campy T-shirts are the most popular. Designs include a crown over the bull's-eye logo and the embroidered word "couture" for women and one with a skull for men. Other items include a $150 Swarovski-crystal-encrusted bull's-eye pillbox and a $250 hobo purse with embossed bull's-eye.

Target is not the only big-box store trying to upgrade its image. Wal-Mart launched clothing lines Metro 7 for women and Exsto, urban apparel for men, in its stores. It has advertised in Vogue and recently held a fashion show in Miami's South Beach.

But Cohen said Wal-Mart's cool quotient -- not to mention sales growth -- still lags Target's.

Target "continues to look at Wal-Mart in the rearview mirror and say: 'Ha! Catch us again,' " he said.