Here’s how Target’s design lab in Minneapolis has created six billion-dollar brands, and has more on the way

One room is full of sequins and kids’ clothes. Another has lamps and tables, and yet another houses beakers of various dishwashing detergents. This is Target’s Minneapolis-based design lab, where Julie Guggemos, the company’s senior VP of product design, leads the creation of hundreds of thousands of items for the company’s in-house brands. Over the past three years, she has launched more than 20 private-label lines, including midcentury-modern furnishings (Project 62), bright and quirky kids’ clothes (Cat & Jack), electronics (Heyday), and personal care and home goods (Smartly). Six of Target’s owned lines now do more than $1 billion in annual sales. Women’s fashion label A New Day, created in 2017, reached $1 billion in its inaugural year; Cat & Jack became a $2 billion business just as quickly. The Goodfellow & Co men’s line, another 2017 debut, sold 3 million pairs of pants in its first 12 months—twice the number of men’s chinos and dungarees Target sold across all brands the previous year. “[These lines] build loyalty,” says Guggemos. Nearly one-third of Target’s revenue in 2017 was related to its owned and exclusive brands, and comparable sales and store traffic were both up 5% year-over-year this past November.