Why Target Loves Wu

It was a big weekend for discount retailer Target (NYS: TGT) , with the chain launching its new collection from famous designer Jason Wu. Stores opened Sunday to throngs of shoppers eager to get their hands on one of 60 pieces by the fashion designer. The Jason Wu release, which featured merchandise priced from $19.99 to $59.99, sold out in a matter of hours.

Wu isn't the first world-renowned designer to make an exclusive line for the retailer. Last year, Target stores made headlines for its massive turnout at the Missoni launch, which was so popular that it managed to crash the Target website. This time around, the retailer's website remained up and running. However, by noon Sunday the entire Wu collection was out of stock on Target.com. Shoppers late out of the gate, however, could find items elsewhere online.

Within hours of the debut, many items appeared at marked-up prices on eBay. The auction website has become the go-to destination for sold-out designer items. A Jason Wu for Target sleeveless pleated shift dress that originally sold for $39.99 was selling on eBay on Sunday with six bids totaling $152.50 -- more than three times the retail price.  

Designer apparel to designer devices
Target is bringing a unique boutique experience to its big-box stores, not only with limited edition collections, but also with its new concept stores. Part of this strategy includes Target's recent partnership with Apple (NAS: AAPL) . The store-within-a-store format will sell Apple products and be staffed by Apple specialists at select Target stores. While Apple products won't be sold at a discount, customers shopping with their Target REDcard will enjoy 5% off every item purchased -- even iPads, iPhones, and other Apple merchandise.   

I'll say it again, if you're not yet long on Target, it's time to get on board. This is a bull's-eye investment that's already rewarding shareholders to the tune of a 2.30% dividend yield. That's just below Wal-Mart's (NYS: WMT) 2.35% dividend yield, and unlike Wal-Mart, Target has a lot more growth ahead of it. Target's stock looks reasonably priced with a current P/E of 12.18, slightly better than Wal-Mart's price-to-earnings of 13.97. Track and monitor these stocks by adding them to My Watchlist -- The Motley Fool's free tool for keeping up with your favorite companies. 

At the time this article was published Foolish contributor Tamara Rutter owns shares of Target and Apple. Follow her on Twitter for more Foolish insights using the Twitter handle @TamaraRutter. The Motley Fool owns shares of Wal-Mart Stores and Apple. Motley Fool newsletter services have recommended buying shares of eBay, Wal-Mart Stores, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended writing puts in eBay. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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