Starbucks netted a record $13.3 billion in 2012. But it isn't immune to competition, so the global coffee seller has updated interiors, offered more products and even tapped into couture fashion.
It recently sold several items designed by the small fashion house Rodarte, including a to-go tumbler for $12.95.
Founded in 2005 by Kate and Laura Mulleavy, Rodarte made a name for itself in the 2010 film Black Swan. Actress Natalie Portman's award-winning portrayal of a ballerina was made even more memorable by her edgy, artsy costumes — designed by Rodarte. Neither Rodarte nor Starbucks would comment for this story.
Starbucks is just the latest mass retailer to jump on this designer trend. Joshua Thomas, a spokesperson for Target, says his company has now worked with more than 100 designers.
"It always starts with the customer at Target," Thomas says. "What have they been receptive to in the past? Where are they at currently?"
The retailer started offering lower-priced versions of designer fashions called Go International in 2006. Suddenly, everyday shoppers could buy clothes by names they had read about on fashion blogs and in magazines. Many of the clothes would sell out on the first day. Target's Thomas says it's about staying current.
"We try to one-up ourselves — try to make it new, try to make it fresh," Thomas says.
One partnership that didn't work out as well as others was Target's holiday pairing with upscale retailer Neiman Marcus.
Britt Beemer, who studies consumer behavior at America's Research Group, says a high-end name isn't a sure thing.
"When you bring in an outside designer to do something, it's not their name, it's the product, the look, the design and the merchandising," he says.
Target regulars, Beemer says, didn't think the products warranted the higher prices.
Some Starbucks drinkers are also price conscious. Last year, Beemer says, a lot of people said they cut out trips to Starbucks to save money.
"I'm sure they've lost some volume because of consumers cutting back, so they say, 'OK, how can I sell more to my customers I currently have?' " Beemer says.
But what's in it for designers? They get money and an introduction to a larger buying public.
But Rodarte clothes aren't easy to find, and industry watchers say the company has yet to find a sustainable market for its artful line. Still, the name has cachet with a certain type of customer.
Target employee Grace Brace, 26, of Minneapolis says the collection didn't make her go to Starbucks any more than usual. But while there, she contemplated buying a mug.
"I almost did yesterday but I didn't, and the store is out of them so I can't today," Brace says.
Unfortunately for Brace, the entire collection has sold out at the Minneapolis Starbucks she patronizes.
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Transcript
STEVE INSKEEP, HOST:
Starbucks is not just an iconic brand. It's an iconic business model. You start with something mundane - like a cup of coffee - and you take that product, as well as the price, upscale. Then, you keep adding more and more features at the high end. The company reported $13.3 billion in sales in 2012. And as it keeps trying to expand its market, it's tapping into the work of high-end designers. Here's Kaomi Goetz, of member station WSHU.
KAOMI GOETZ, BYLINE: You might remember Natalie Portman in "Black Swan."
(SOUNDBITE OF MOVIE, "BLACK SWAN")
NATALIE PORTMAN: (as Nina) I had the craziest dream last night - about a girl who was turned into a swan.
GOETZ: The actress played a ballerina in the 2010 film. Her portrayal was even more memorable by her edgy, artsy costumes. They were designed by an upstart, small fashion house called Rodarte. Never heard of it, you say? You're not alone.
Do you know Rodarte?
SCOTT TATE: What - Rodarte? No.
GOETZ: Do you know what Rodarte is?
TOM LINDBERGH: I do not.
GOETZ: Granted, Minnesotans Scott Tate and Tom Lindbergh are not the typical Rodarte clients, but the men are Starbucks drinkers. And Starbucks recently sold several items designed by Rodarte, including a to-go tumbler for $12.95. Neither Rodarte nor Starbucks would comment for this story, but the coffee seller is the latest mass retailer to jump on this designer trend. Target pioneered the concept in 1999, with housewares by architect Michael Graves. Joshua Thomas is a spokesperson for Target.
JOSHUA THOMAS: It always starts with the customer at Target. What have they been receptive to, in the past? Where are they at, currently?
GOETZ: Like offering lower-priced versions of designer fashions - called Go International - that began in 2006. Suddenly, everyday shoppers could buy clothes by names they read about on fashion blogs, and in magazines. Many of the clothes would sell out on the first day. Target's Thomas says it's about staying current.
THOMAS: We try to one-up ourselves - try to make it new, try to make it fresh.
GOETZ: Britt Beemer studies consumer behavior at America's Research Group. He says a high-end name isn't a sure thing.
BRITT BEEMER: When you bring in someone like an outside designer to do something, it's not their name. It's the product and the look and the design, and the merchandising.
GOETZ: He says Target regulars didn't think the products warranted the higher prices. Some Starbucks drinkers are also price-conscious. Last year, Beemer says a lot of people said they cut out Starbucks coffees, to save money.
BEEMER: I'm sure they've lost some volume because of consumers cutting back. So I'm sure they're trying now to look at some things and say, OK, how could I sell more to my - to customers I currently have?
GOETZ: But what's in it for designers? Clearly, money and introduction to a larger buying public. But Rodarte clothes aren't exactly easy to find, and industry watchers say Rodarte has yet to find a sustainable market for its artful clothes. Still, the name has cache with a certain type of customer, like Grace Brace of Minneapolis. The 26-year-old Target employee says the collection didn't make her go to Starbucks any more than usual. But while there, she contemplated buying a mug.
GRACE BRACE: I almost did yesterday, but I didn't. And the store's out of them, so I can't today.
GOETZ: Staff at the Minneapolis Starbucks Brace goes to, says the collection has since sold out.
For NPR News, I'm Kaomi Goetz. Transcript provided by NPR, Copyright NPR.
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