TOP STORY: INNOVATION & DESIGN September 8, 2008www.businessweek.com/innovation

Target’s Design ScoutCulture & Commerce brought Philippe Starck to Target. Now the firm is helping the retailer introduce young designers to the mass marketby Reena Jana

Target (TGT) is known for selling house-wares by forward-thinking designers like Philippe Starck. What’s less known is the Minneapolis retailer’s secret weapon for finding such talent. Along with in-house trend-watchers, Target works with Culture & Commerce, a small New York design agency, to scout for innovative designers with potential mass-market appeal.The firm is the reason Los Angeles designer Sami Hayek’s $20 bedspreads are stars of Target’s back-to-school cam-paign. “They give me access to compa-nies that I would have to take a lot of time to even get an appointment with,” says Hayek.Michele Caniato, a consultant on high-performance materials for companies such as Nokia (NOK) and Whirlpool (WHR), founded Culture & Commerce with entrepreneur George M. Beylerian in 2000. They applied the concept of Hollywood talent management to pro-duct design. “We’re a matchmaker and guardian angel,” says Caniato, adding that the firm has negotiated $65 million in designer contracts to date.

COACHING SESSIONSBefore introducing designers to com-panies like Target or other clients such as Microsoft (MSFT), Morgans Hotel Group (MHGC), and Puma, Caniato analyzes their mass-market potential and spends up to nine months coaching them

on how to work with large corporations. He also negotiates financial and legal details of a deal and acts as a liaison between the two parties, managing sche-duling, budgeting, and contracts.In return, the designers, who retain final say on the look of their products, pay 25% to 30% commissions under 4-to-10-year contracts with the agency. And they get to focus on coming up with unique products. “Before, I wasn’t designing a lot,” says Hayek. “After, I began desi-gning again.”Target’s relationship with Culture & Commerce dates from 2001, when Caniato introduced Starck to the retail giant. It was the agency’s first deal—and a risky move for Starck, then known for luxury goods sold at upscale boutiques such as New York’s Moss. Caniato convinced him that designing a line for Target, created with more hands-on involvement than a typical licensing deal might allow, would increase his visibility without dimini-shing his high-end reputation.

FOCUS ON VALUEStarck provided a high-profile test case for Target’s design-centric strategy. The company, which does not break out sales figures, has pursued this “open innova-tion” approach to design partnerships ever since.Target’s overall sales growth has hovered around zero for the past three quarters, but Chief Executive Gregg W. Steinhafel has said that the company will continue

with such collaborations, which have shifted from big design-world names toward breaking new talent, such as Ha-yek. This fits Target’s renewed empha-sis on low prices rather than on hip chic. “What Target has begun to do, albeit later than we would have liked, is to focus more on value and on price,” says JPMorgan Chase (JPM) retail analyst Charles Grom.Roger Martin, dean of the Joseph L. Rotman School of Management at the University of Toron to, who lectures on design as a corporate strategy, says Culture & Commerce’s approach is smart. The arrangement helps product designers, who otherwise tend to rely on their own promotional Web sites or licensing services to drum up new business. And it helps businesses source fresh talent. “The design world is frag-mented, so it can be hard for companies to know who’s out there,” Martin says.

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Microsoft’s elegant compu-ter mouse, from Starck

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Culture & Commerce Connects Business and Design

By Reena Jana

Major corporations from Microsoft (MSFT) to Target (TGT) enlist New York design agency Culture & Commerce to find inventive designers to work on products, hotels, and packaging. The boutique firm acts as an intermediary between corporation and designer and represents famous design world names such as Philippe Starck. Recently it has ad-ded up-and-coming designers such as Sami Hayek to its roster. Here, we look at a variety of the firm's clients and a range of their projects, from a computer mouse to luxury ho-tels.

Boutique Agency Culture & Commerce's Global Reach

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MICROSOFT’S ELEGANT COMPUTER MOUSE, FROM STARCK

Corporation: MicrosoftDesigner: Philippe StarckProject: Optical mouseYear: 2004

Microsoft worked with Culture & Commerce in hiring Starck to create a sleek computer mouse. The simple-looking device featured an elegant silhouette and a central, colorful stripe that lit up when the mouse was plugged in. Starck designed the scroll wheel to be hidden in the stripe.

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Well-known designer Philippe Starck created a line of 52 household items for the discount retailer, one of its first high-profile design collaborations. Objects included a sleek, rectangular tape dispenser (seen here) and a toddler’s plastic cup styled to look like a crystal goblet.

Corporation: TargetDesigner: Philippe StarckProject: HousewaresYear: 2001

PHILIPPE STARCK’S SLEEK TAPE DISPENSER FOR TARGET

Mexican-born designer Ha-yek is featured in the current back-to-school ads for Tar-get. He created affordable, dorm-friendly furniture such as a $130 desk and a $100 bookshelf. The cardboard packaging can be reused as folders for a student’s papers. The concept was to provide earth-friendly packaging that doesn’t have to be thrown away.

Corporation: TargetClient: Sami HayekProject: Housewares and stationeryYear: 2008

SAMI HAYEK’S ECO-PACKAGED BACK-TO-SCHOOL FURNITURE

WANDERS’ MONDRIAN HOTEL FOR MORGANS HOTEL GROUP

Culture & Commerce also hooked up Wanders with Morgans Hotel Group for his first hospitality project: the landscape and interior design for its new Mondrian hotel and residences in Miami. The fashionable property, opening in December 2008, will also feature furniture designed by Wanders.

Corporation: Morgans Hotel GroupClient: Marcel Wan-dersProject: Interiors and landscape for Mondrian hotelYear: 2008

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Hip Dutch designer Marcel Wanders teamed up with Puma to create a series of edgy black-and-white sporting accessories. Wanders’ goods also included chic versions of outdoor gear, such as this collapsible nylon tent and a matching inflatable black bed.

CHIC CAMPING GEAR FOR PUMA, FROM MARCEL WANDERS

Corporation: PumaDesigner: Marcel WandersProject: Outdoor gearYear: 2007

Several years ago, young Israeli-born designer Dror Benshetrit only made $20,000 a year. But since signing with Culture & Commerce in 2004, his project revenue has tripled each year. His biggest project to date, the architectural concept and interior design for a set of boxy, modern villas and bungalows on a natural island off the coast of Abu Dhabi, came through Culture & Commerce. This year, Benshetrit has already seen revenues of more than $1 million.

Corporation: ZayaDesigner: Studio DrorProject: Island resort in DubaiYear: 2010

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Corporation: SBE Entertainment GroupDesigner: Philippe StarckProject: SLS HotelsYear: From 2008

Starck is currently fulfilling a 15-year design contract with high-end hotelier SBE Entertainment Group, owned by developer Sam Nazarian. The first project in their collaboration is the top-to-bottom renovation of SLS Hotel in Beverly Hills, which opens this fall. The luxury property will be managed by Starwood Hotel - Resort Worldwide.

DROR BENSHETRIT’S BOXY ISLAND COMMUNITY FOR ZAYA

STARCK’S SLS HOTEL RENOVATION FOR SAM NAZARIAN