Katrina Markoff made Fortune's list of 40 under 40 this year (just announced this week). Markoff is the founder of Vosges Haut-Chocolat. Markoff creates exotic truffles using fine ingrediennts which she personally from around the world. She developed her skills at Le Cordon Bleu in Paris, where she began to create her unique chocolates, which involve infusions of rare spices and flowers combined with premium chocolate.
Her growth exploded when she began selling her chocolates at Neiman Marcus. She also has grown her catalog business substantially and operates eight boutique retail locations of her own.
According to Fortune, Markoff now has agreed to develop a lower-priced line of chocolates for Target and Wal-Mart. Naturally, she follows a long list of designers who have gone this route, creating popular lines at affordable prices ("affordable luxury" if you will). The move always comes with some risk though. How does one manage the brand so as not to dilute it? Beyond that, though, "designers" such as Markoff have to think about how they manage their retailer relationships. How does one continue to please Neiman Marcus and maintain that strong relationship, while selling lower-priced items at Target and Wal-Mart? To thrive, designers have to create products of clearly different quality and positioning for the different retailers. They must really understand the differences in the consumer at each retailer to do that effectively. Some cannibalization always will occur, but a designer can avoid that if they continue to innovate and first bring exciting new products to their high-end luxury retailers. Without that "reward", they risk damaging the relationships with those retailers who first helped them build their brand. They also have to think carefully about WHICH mass merchandisers with which to partner. Some would question whether it makes sense, for instance, to sell to both Wal-Mart and Target, given Vosques' positioning.