NEW YORK — Wal-Mart is gunning for a bigger slice of apparel.
Having successfully introduced Metro 7, a trend-driven contemporary women’s brand, and returned George to its modern, classic roots, the retail giant has big plans to build on those initiatives. They include:
The possibility of other new apparel brands, which could involve celebrity spokesmen or an established designer.
A repositioned No Boundaries brand in the junior category, which will hit Wal-Mart stores for back-to-school.
An evaluation of other apparel brands that might be in need of a fix.
The launch of an urban-inspired brand for men in July.
“You’ll see new concepts on a regular basis from us,” promised Karen Stuckey, senior vice president and general merchandise manager of Wal-Mart product development for apparel, home, hardlines and specialty.
Asked whether Wal-Mart would go the celebrity route or work with an established designer, Stuckey replied: “It’s a very big trend [celebrities with fashion collections]. We’ve watched that evolve carefully. If and when we play in that arena, we’ll do it in a way that’s relevant to our customers. In terms of a designer, spokesperson or celebrity, we’re more apt to go the designer route because it’s more relevant. Stay tuned.”
Wall Street analysts have complained for years about Wal-Mart’s fashion offerings and the opportunity being missed. According to retail analysts, the softlines and domestics categories at Wal-Mart discount stores accounted for about $50 billion, or 17.5 percent, of the company’s total sales of $285 billion last year.
Wal-Mart clearly is trying to correct its fashion lapses. Stuckey said that Metro 7 has given Wal-Mart the validation it needs to move on in the fashion arena.
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. At a Merrill Lynch Retailing Leaders Conference here last week, Eduardo Castro-Wright, president and ceo of Wal-Mart Stores USA, said Metro 7 was so successful the company had to slow down its distribution. The plan now is to have it in 1,000 stores by April 1 and 1,500 this fall.“There are exciting things to come in apparel,” Stuckey said.
No Boundaries represents an opportunity for Wal-Mart to take trends to a new level. The redesigned No Boundaries allows Wal-Mart to attract teens who may be in the store buying video games or music, but were turned off by its apparel, much the same way a certain segment of female shoppers were buying consumables, but were overlooking clothing until Metro 7 came along.
The No Boundaries collection for b-t-s touches on all of the key buzzwords for fall: military, utility and varsity prep. The brand has jumped on the Victorian bandwagon with cropped velvet jackets, lacy camis and British-influenced knickers. Camouflage is big, appearing on skirts and cropped pants. There are T-shirts screened with menacing-looking skulls and the names of Seventies rock bands such as Lynyrd Skynyrd.
“We’ll have a big presence in straight-leg jeans and black and gray jeans,” Stuckey said, pointing out a variety of embellished pockets. “Denim will be an important story for back-to-school.”
Like George, No Boundaries suffered from Wal-Mart’s recurring mistake of appealing to too wide of an audience made up of different customer segments.
Before Metro 7 was introduced, George tried to fulfill the needs of both classic and trendy shoppers. When market research showed that a segment of 25- to 45-year-old shoppers were rejecting George, Wal-Mart developed Metro 7 for the consumer who wanted fashion-forward, body-conscious clothes.
Wal-Mart failed juniors in much the same way by allowing No Boundaries to target two different age groups, Stuckey said.
“No Boundaries was previously positioned to kids and teens,” said Stuckey, adding that teens found the brand too juvenile. “This audience was in our stores, but we weren’t serving their needs. This allows us to focus on true teens.”
The trends are translated to kids’ clothing with a gentler hand. For example, romantic sweaters for girls are embellished with corsages and brooches, and denim duster coats have embroidered appliqués.
“We’ve tightened, focused and positioned No Boundaries to the teen,” Stuckey said. “We want to tell the right trend stories.”Wal-Mart’s New York trend office, “the folks who brought us the latest-looking George and collaborated on Metro 7, men’s, home and kids’, is working with our product development team in Bentonville, Ark.,” on No Boundaries, Stuckey said.
Wal-Mart also is upgrading the quality of its basic apparel to make it attractive to a wider audience. In June, the company will roll out organic cotton baby clothes by George, the first step in its organic clothing stable, Stephen Quinn, senior vice president of marketing, said earlier this month.
The retail giant’s customers are getting more sophisticated. Quinn said shoppers asked for organic food, and Wal-Mart will have 400 stockkeeping units on shelves by the summer. (Sushi, $557 bottles of French burgundy and organic food products are for sale at a new Wal-Mart store in Plano, Tex. See story below.)
Meanwhile, Exsto, an urban hip-hop brand for young men, will be launched in July.
“Urban hip-hop needed a separate designation,” Stuckey said. “Only after we’ve researched an area do we carve it out. We’re taking a determined, comprehensive and very disciplined approach to understanding our customers.”
In an effort to better understand its shoppers, Wal-Mart has, through extensive market research, identified several customer profiles. It’s been most excited about Gracie, the fictional shopper gleaned from Metro 7 research, who’s responding to the brand. The company said she was buying groceries and other products, but was leaving the store without apparel. Now, the retailer is trying to identify the junior counterpart to Gracie.
“We’re in the midst of research to actually name them,” Stuckey said. “This falls into a younger Gracie. We have to be a solution and recognize that this is a life stage. Over time, we’ll start to carve out different segments within the young-adult world.”
Along with b-t-s, Wal-Mart introduced a new look in back-to-campus. The retailer showed it off in “dorm rooms,” replete with handsome young coeds listening to iPods and reclining on beds made up with sheets and comforters from the Get It Together collection.
“The prints don’t exactly match,” said Stuckey. “They coordinate.”Bead curtains, funky mirrors and a bright red sofa and chair were merchandised with beds covered in op art-patterned sheets in red, black, gold and white. Stuckey made it clear that Wal-Mart is appealing to consumers who appreciate design. It’s a big change from the recent past, when Wal-Mart’s products appealed mainly to people who simply wanted to save money. The tactic also is how Target has carved out its niche against the world’s largest retailer.
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