By  on February 9, 2006

BOSTON — By this point, Wal-Mart's trendy new Metro 7 label should have been selling in a thousand stores, but it has reached only 860 doors. Why? Because the retailer can't keep up with the demand.

"We're now trying to catch up with the merchandise flow," Lucy Cindric, senior vice president of ladies apparel, accessories and intimate apparel for Wal-Mart Stores U.S., said in an exclusive interview. "We have had tremendous success turning through merchandise."

The designers on the runways of Bryant Park and elsewhere in New York this week — many of whom few people have heard of beyond the tents — represent a sliver of the fashion world. Wal-Mart's success with Metro 7 is its mega side. The retailer declined to give sales figures for Metro 7, but vendor sources estimate the brand could do $200 million, even with limited distribution, in its first 12 months. The bulk of Metro 7 sportswear retails between $12 and $25, with the highest-priced item being a trenchcoat for $32.94

At times, sales of Metro 7 have exceeded three times initial projections for an item. In April, the Bentonville, Ark., retailer will launch shoes, accessories and costume jewelry under the Metro 7 label. By September, it plans to have Metro 7 in 1,500 stores, or roughly half of all domestic Wal-Marts.

If everything continues to click, the retailer aims to turn Metro 7 into a lifestyle brand à la George, its U.K. import, with lingerie, home and then possibly men's and children's apparel.

Metro 7 marks a big moment for the $285 billion retailer. Put in company lingo, "Gracie" is "crossing the aisle" to buy the collection.

"Gracie" is the retailer's internal name for an important 25- to 45-year-old female customer, who is finally wheeling her grocery cart over to shop for apparel. That long-sought development is potentially very good news for Wal-Mart's future profits and growth.

"All of our data signals we got who we were after, and we are finally serving that customer who has been in our stores all along," said Karen Stuckey, senior vice president and general merchandise manager of Wal-Mart product development for apparel, home, hardlines and specialty. "Metro 7 is validation to move on.…There are exciting things to come in apparel."

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