Yes, lots of designers collaborate but I think Target is a master at marketing them. Target is a 'happy' place for me....I can take the kids, grab a Starbucks and shop for an hour or so....hassle free and everyone normally leaves relaxed.
H&M is another collab master!
Kohls does designer collabs recently with Narcisco Rodriguez, Macy's does them, and I have seen smaller collections or just a few pieces done for the smaller stores & boutiques.....I remember Gap did a couple. Payless did Cristiano Siros(sp) and have done other up and coming designers.
I am sure there are many I am missing!