Apple, more designer brands

NEW YORK (CNNMoney) -- Hoping to offset a disappointing holiday season, Target is relying on some tried and true designer partnerships to bring more of its core customers through the doors and testing the waters with cult favorite Apple, in an effort to attract new ones.
First up will be Jason Wu for Target, a limited collection of dresses, handbags and scarves by the young designer made famous by Michelle Obama -- he designed the gown she wore to the inauguration -- that will roll out Feb. 5. Then in May, the retailer will launch "The Shops at Target," a series of design partnerships with small boutique businesses, that will offer several more limited-edition collections.
But perhaps the most anticipated alliance is the trial sale of Apple's (AAPL, Fortune 500) iPhones, iPads and other products in Target stores. The rollout will initially occur in 25 stores, according to spokeswoman Dustee Jenkins, who refrained from providing additional details like when the products would be available.
Target (TGT, Fortune 500) has always been a "women-friendly store," said Britt Beemer, retail analyst and chairman of America's Research Group. That has helped boost sales of clothing and beauty products, but has significantly hindered sales of big-ticket items like electronics.
By adding Apple products to its offerings, the analyst believes it could help the retailer attract more male customers and give it a much-needed shot in the arm in the electronics category.
"Designer clothes won't fix [Target's] problems," Beemer said, but "[teaming up with Apple] is a smart strategy from the viewpoint of getting a new customer in the store."
The move couldn't come at a better time. Low margins coupled with slowing same-store sales have hurt the retailer, particularly over the key holiday shopping season.
"Target has had to discount more this year than they have in the past to get people back in the store," Beemer explained. "A top they might have sold a year ago for $10, this year they will sell for $8."
After the retail giant's holiday sales fell well short of analyst's expectations, the company lowered its earnings guidance for the fourth quarter, citing soft sales of electronics, music, movies and books.
Missoni for Target fetches big bucks on eBay, Craigslist
Target has been successful with its popular collaborations in the past, so much so that other big-box stores like Kohl's (KSS, Fortune 500) and JC Penney (JCP, Fortune 500) adapted their model. But Target's last designer collection, with Italian fashion house Missoni, was a publicity coup that became a logistical nightmare.
Spiking demand for the limited-edition clothing and house wares collection crashed the company's web site. Online orders were delayed and some orders were later cancelled, leaving many shoppers unsatisfied.
"That was an unprecedented event" said Stacia Andersen, Target's senior vice president of merchandising. To ensure the company is equipped to handle the spikes in demand that generally follow the launch of a limited-edition collection going forward, "our teams have been working around the clock," she said.

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ECB sees signs of thaw in credit freeze

NEW YORK (CNNMoney) -- The European Central Bank's latest effort to prevent a credit crunch in the European banking system appears to be showing signs of success, and some analysts say it could also be providing some relief for tensions in the government bond market.
ECB President Mario Draghi said Thursday that the first round of the central bank's Long Term Refinancing Operation, which pumped some €500 billion worth of 3-year loans into the banking system last month, has eased conditions for banks struggling to secure funding in the private market.
"We do think that at least this decision has prevented a credit contraction that would have been more serious, much, much more serious," Draghi said at a press conference in Frankfurt following the ECB's latest policy meeting.
In particular, Draghi said some markets for unsecured bank bonds have reopened since the lending program launched. That's encouraging, he added, because banks have more than €200 billion worth of bonds coming due this year.
Draghi also said there are indications that some of the loans are making their way into the real economy, despite a recent surge in overnight deposits at the ECB.
"We really see evident signs that this money doesn't simply stay in the deposit facility," said Draghi. "This money circulates in the economy."
Indeed, banks' overnight deposits at the ECB fell slightly Thursday to €470.6 billion from a record €485.8 billion Wednesday. But the amount of money parked at the ECB remains high, suggesting banks are still hunkering down.
The dip in overnight deposits at the ECB coincided with strong demand for Spanish and Italian debt at two auctions Thursday, raising speculation that some banks were using ECB funds to buy bonds issued by stressed euro area governments.
Draghi acknowledged that demand for shorter-term government bonds has been trending higher recently, but he downplayed any possible connection with the ECB's latest liquidity measures.

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eurozone crisis

Angela Merkel and David Cameron talked of the shared friendship between Germany and Great Britain, but made no progress on the question of a Financial Transaction Tax. Photograph: Odd Andersen/AFP/Getty Images
2.44pm: Shadow foreign secretary Douglas Alexander has claimed that Cameron achieved little in Germany today.

Alexander told BBC News that:


I fear that, for all the warm words at the end of today's meeting, David Cameron is actually leaving Berlin just as isolated as he was when he arrived.

That is a genuine concern for those of us who want Britain to be a strong, and indeed leading, voice in trying to find a way forward.

2.14pm: Reuters is focusing on the different ways that Cameron and Merkel are approaching the crisis:


The leaders of Germany and Britain sent out conflicting signals on Friday about how to solve the euro zone's debt crisis and admitted they had failed to narrow differences over the introduction of a financial transaction tax in Europe.

At a news conference in Berlin, British Prime Minister David Cameron and German Chancellor Angela Merkel tried to paper over divergent views on European policy that have sparked a war of words between politicians and media in both countries.

But they could not mask differences over how the single currency bloc's debt crisis should be handled, with Cameron calling for "decisive action" to stabilise the euro zone and Merkel making clear she favoured a "step-by-step" approach.


1.31pm: With the press conference now over, what have we learned?

Angela Merkel and David Cameron were both keen to present a united front, stressing that the two countries share a strong friendship, and agree about many crucial issues. The agreement that next year's EU budget should be pegged to the rate of inflation will cheer many.

It's not a surprised that the two leaders didn't make progress on a financial transaction tax - as there is such a gulf between their two positions.

The most important quote is probably Merkel's warning that Europe "mustn't pretend to have powers we don't have."

That suggests that Cameron's demands for Europe to throw everything it's got at the crisis -- the Big Bazooka -- may not be heeded. [it also reminds us of Jean-Claude Juncker's suggestion this morning that the UK should stop telling the eurozone what to do]

1.16pm: Merkel finished by modestly saying that her English is "limited" and that she needs to improve her Russian and French. But that's OK, because:

We all speak in the language of Europe.


Angela Merkel and David Cameron joint conference in Berlin Photograph: Sky news
1.15pm: Merkel stressed that "The UK and Germany need each other" and paid tribute to Britain's achievements.

Britain has always been an engine and driver of more competitiveness [through the Doha round.]

However, she did then question whether Cameron's call for everything possible to be done to address the crisis was completely credible:

Here's the key quote from Merkel (via Reuters):


The British demand that we use a large amount of firepower to win back credibility for the euro zone is right. But we have to take care that we don't pretend to have powers we don't have. Because the markets will figure out very quickly that this won't work.

1.13pm: Where is the Big Bazooka that the prime minister called for last month, asks Matt Frei of Channel 4 News. And what does Cameron think about some of the recent German media coverage?

Cameron starts by saying that his German isn't too hot, and promptly proves it by getting the German for Bazooka wrong* (they won't like that in the Eton Language department).

Unfazed, Cameron tells the conference that Britain remains firmly committed to the European Union -- after all, "Britain helped create it".

Another question -- what does he think EU should be doing to fix the crisis?

Cameron replies that the long-term solution must involve "proper rules on fiscal discipline", and that all the eurozone's institutions need to defend the euro.

* - he referred to a "Superwaffe" while a better term is "Panzerfaust", or even better would be "das große Geschütz"

1.12pm: Merkel and Cameron said they agreed that a global financial transaction tax would be a good thing.

Merkel added: "But just a European one - we did not make any progress on that one."

Cameron reiterates that UK position - that if an FTT isn't truly global, the government won't accept it.

1.07pm: The first question (from Sky News): How can Merkel and Cameron talk about strong friendship when there is such dispute over certain issues?

Cameron says that the two countries agree about a lot - starting with the need for a solid European economy, one that is "strong, efficient, that deals with its debts".

1.03pm: Now David Cameron speaks, saying that the talks have been positive. He also refers to the strong bonds of friendship between the two countries (after several days of tit-for-tat rowing over the financial transaction tax)

The prime minister says that "it is obvious that we don't agree on everything" but it's important that Germany and Britain "talk and reach agreements".

Cameron says that he and Merkel agreed that the EU budget for 2012 needs to be pegged to the EU inflation rate, rather than accepting the EU parliament's demand for an inflation-busting rise [Merkel also expressed support for this position].

Broadly speaking, he says, "Germany has her interests, and so does Britain....we have agreed to work together and achieve our joint interests".

Cameron also says that European leaders must deliver on the promises made in Brussels last month.


1.01pm: Merkel goes on to explain that Europe needs to stop breaking the growth and stability pact (having violated it "60 times"). She paints a picture of an amicable meeting with Cameron, saying:

We share a strong bond of friendship.

12.58pm: The press conference is just starting now.

Angela Merkel goes first, explaining that Europe must focus on "creating jobs", being "innovative and creative".

Europe must...takes its potential and uses it to find a strong position in the global economy.

Merkel said that there is a clear difference between Germany and Great Britain -- only one country is in the single currency -- but "we share a single market in Europe and we want it to be successful."

12.49pm: The press conference between Angela Merkel and David Cameron is about to start -- if you're near a TV in the UK you can watch it on Sky....

12.13pm: In the reader comments, ZenonP rails against the "utterly false and misleading" image at the top of the blog. And in the spirit of Crowd Sourcing/Open News/Web 2.0/'Anything you can do' he has kindly designed an alternative.

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