As shoppers get ready for spring, Walmart is debuting new fashion-forward apparel to try to reel in consumers seeking style on a budget.
The retailer is unveiling the spring collections for Free Assembly and Scoop, two of Walmart’s exclusive apparel brands. The brands are the first from Brandon Maxwell, a fashion designer and judge on Bravo’s “Project Runway.” Maxwell has his own luxury brand and a history of dressing famous women from Michelle Obama to Lady Gaga. Walmart tapped him as the brands’ creative director last spring.
The new collections include clothing and accessories and are rolling out to its website and select stores in the coming weeks. It’s part of Walmart’s ambitious effort to become known as a destination for affordable fashion — not just the purveyor of socks, T-shirts and other basics. Nearly 60% of Walmart’s annual revenue comes from grocery, but apparel, home decor and other general merchandise drive higher profits and can boost the number of items in shoppers’ baskets.
Maxwell said customers will notice elevated details of tops, dresses and other items, such as metal studs, certified vegan leather and unique denim washes. Items in the spring collections range in price from $8 to $75.
“I hope people will feel the quality, which is something we’re really proud of,” he said. “Clothing is an intimate experience, and it’s about how it makes you feel.”
Denise Incandela, executive vice president of apparel and private brands for Walmart U.S., said Maxwell’s unique, colorful pieces will help Walmart take a larger share of customers’ closets.
Along with Free Assembly and Scoop, Walmart has two other exclusive, elevated brands: Sofia Jeans, a line developed with actress Sofia Vergara; and Eloquii Elements, a plus-sized women’s line inspired by acquired brand Eloquii. It has added more national brands to its website and stores, too, including athleticwear from Champion and girl’s apparel and accessories from Justice.
Walmart declined to share growth or revenue figures for apparel sales — but there are some signs its strategy is paying off. On last week’s earnings call, CEO Doug McMillon called out apparel as one of the strongest categories in the holiday quarter.
Playing up apparel in stores, online
As the spring collections roll out, Walmart is using its stores and website to promote the private brands.
Free Assembly’s spring collection has nearly 500 pieces across men’s, women’s and kids apparel. The collection will be carried by 1,000 stores — roughly 20% of the retailer’s more than 4,700 U.S. stores. That’s twice as many stores as last spring.
“That’s frankly one of the biggest ways to get exposure to the brands — by increasing the store count — because people see it in the stores and then they buy it online and in stores,” Incandela said.
Scoop’s collection for women will be carried by 500 stores and on Walmart’s website. It includes 56 pieces, ranging from denim and skirts to shoes.
The company’s push into fashion inspired Walmart to acquire Zeekit, a virtual fitting room start-up with technology that can be incorporated into the website.
Walmart is experimenting with how merchandise looks in stores, too. It revamped a store near its Bentonville, Arkansas, headquarters to showcase Walmart’s owned and national brands. It widened aisles, added lighting and mannequins and put branded shops toward the front.
That design will be used in more stores, according to Incandela.
“We wanted to make product the hero and take away the clutter so that the customer could see the quality and the style of the product — and it’s working,” Incandela said. “The customer is looking for an inspiring shopping experience where they can browse and discover.”
‘A basket enhancer’
Last year, industry-wide apparel sales in the U.S. topped pre-pandemic levels both in dollars and units. Sales in the category rose to a record $246.2 billion last year, a 9% increase from 2019 and a 33% increase from 2020, according to The NPD Group, a market research firm.
The comparisons this spring will be tough as apparel retailers go up against months when Americans spent freely to refresh their wardrobe after getting vaccines and looking forward to more social activity, said Kristen Classi-Zummo, a fashion apparel industry analyst for NPD.
She expects apparel sales to be softer in 2022, with some shoppers splurging on luxury pieces and others hunting for deals.
Incandela said shoppers want vibrant pieces as the weather warms and they crave some sense of normalcy. She said value is important, too, as prices of food and more rise.
“Both collections will position people to be happy and joyful and express themselves in a modern, new way and at exceptional price point as people are mindful of inflation,” she said.
Michael Baker, a retail analyst for D.A. Davidson, said Walmart’s stylish offerings can help “a more moderate income customer trade up a little bit.” While shopping for groceries or running to the store for a lightbulb, she may see a blouse to buy, too, he said.
“I don’t necessarily see it as a traffic driver,” he said. “I see it more as a basket enhancer.”
The fashion push is also a competitive move, after Amazon unseated Walmart to become the country’s top apparel retailer during the pandemic, according to research by Wells Fargo.
Customers may be more likely to turn to Walmart for outfits, as conflicting dynamics of inflation and a reopening economy tug at their wallets and the peak of omicron recedes, Baker said.
“Those headwinds and tailwinds can combine to be a positive for Walmart,” he said. “You have demand — perhaps, those people want to go out and refresh their wardrobe — and then you have the market share potential for Walmart because the consumer is going to feel a little pinched in other places.”
Baker said Walmart is turning to the playbook of Target, a big-box retailer that’s launched successful private fashion brands, made the brands a focal point of its stores and earned a reputation for cheap chic.
Walmart, the nation’s largest grocer, is still developing its muscle for fashion and learning how to present apparel in stores, he said. Yet, he continued, selling groceries and trend-forward apparel have a commonality: A short lifespan.
“The big risk for fashion is markdowns,” he said. “Fashion is a perishable.”
Disclosure: NBCUniversal is the parent company of Bravo and CNBC.
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