By  on July 23, 2007

With back-to-school shopping about to kick off, the resignation of Wal-Mart's top apparel executive suggests continued turbulence in the retailer's ailing clothing business.

Claire Watts, who was among the $345 billion retailer's top women executives, will leave the company this week, a Wal-Mart Stores Inc. spokeswoman said. The move comes as the retailer struggles in apparel and home decor, categories Watts ran.

As part of a company reorganization in January in which John Fleming was named chief merchant, Watts was relieved of her responsibility for home decor. Watts was not available for comment.

Dottie Mattison, a 12-year Gap Inc. veteran who joined as chief merchant last year, will become senior vice president and general merchandise manager over women's apparel for Wal-Mart U.S. Mattison, who will report to Fleming, will be responsible for apparel product development, jewelry, shoes and accessories. She left Gap as vice president of adult accessories and local merchandising strategy.

Mark Larsen, the executive responsible for men's, kids' and infant apparel, also will report to Fleming.

Karen Stuckey, a former Sara Lee executive and one of Watts' deputies on apparel, is taking a new role as senior vice president, product development, sourcing, quality and compliance for home.

Watts is credited with reducing clutter in apparel by weeding out dated brands, improving the visibility of other private labels such as NoBo, building up the company's product development division and opening a Manhattan trend office. She joined Wal-Mart in 1997 after stints at Limited Stores, Lands' End and May Department Stores Co. In 2003, she was given responsibility for all of soft goods merchandising after being named Sam M. Walton Entrepreneur of the Year, a prestigious internal company honor.

One of her mantras was: "At Wal-Mart, we must have the courage to be contemporary." But her plan to bring in trendier and pricier home decor and fashion hit a sour note with core customers. Skinny jeans and a higher-priced George collection designed by Mark Eisen with a more body-conscious fit languished on racks last year. The retailer took heavy markdowns to clear goods and blamed apparel for denting comp-store sales.

And Wal-Mart had to pull its trendy Metro 7 line, developed with Watts' oversight, from about 500 stores after an overly ambitious expansion.In May, during a media presentation organized by Wal-Mart, Watts articulated a reversed course. She said the retailer would minimize true fashion to less than 10 percent of the assortment. Instead, Wal-Mart would focus on deals such as two-for-one buys, and would display broad assortments of updated items with mass appeal such as ruched polo shirts for summer. She said recent prices of $20 to $30 a garment were too high and that the retailer aimed to be "sensitive to how much money [customers] have in their wallet."

"I can't say I see this as surprising," Bob Buchanan, retail analyst with AG Edwards, said of Watts' resignation. "Wal-Mart clearly continues to struggle in apparel and they need a change for the better."

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