LONDON — Asda, Wal-Mart's U.K. arm, plans to shutter its 11 stand-alone George clothing stores and instead open units selling a variety of nonfood items.
The George stores first opened in September 2003 and were meant to compete with other mass market clothing brands on the British high street, including Marks & Spencer.
"The George high street format has performed well for us; however, ASDA Living is an even stronger format and produces a better investment return than the high street stores," said Anthony Thompson, managing director at George Global. Asda Living units will sell homeware, clothing and electrical items.
"As with any business like ours, you need to choose where to focus your attention and where to invest your time and money," he added. "While the George high street stores have always been a potential opportunity for growth, our strategy is firmly centered around maximizing our existing chain of superstores, including reformatting all of our George departments; driving sales through dotcom, with a new George Web site due to launch this summer, and rolling out ASDA Living stores to even more parts of the country."
The company has plans to open 10 ASDA Living stores within the year in towns including Bradford and Stratford-upon-Avon, England; Casnewydd in Wales, and East Kilbride in Scotland. These ASDA Living stores will have an average size of 29,000 square feet. ASDA Living shop-in-shop extensions are planned in 12 existing ASDA superstores.
A spokeswoman for the company ruled out plans for a similar rollout of ASDA Living stores in the U.S. There, the George clothing line sells directly through Wal-Mart stores.
The 10 George stores, including units in Leeds and Croydon, will be closed, while the 11th store, in Manchester, will be converted into an ASDA Living model.
Meanwhile, ASDA Direct, the company's online catalogue business, will be reinforced with a new distribution center, offering product deliveries to 95 percent of U.K. postal codes. The company estimates that its online business, which sells 700,000 nonfood products, will generate about $2 billion in sales by 2011.
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