Wal-Mart Stores Inc. on Thursday said it will open 110 new stores in China, even as growth in the country slows.
The plan calls for further developing stores in second-, third- and fourth-tier cities in China. According to retail experts, Western companies are now starting to realize that they expanded too quickly into far-flung areas where residents are unfamiliar with or uninterested in overseas brands.
The expansion will center on opening Supercenters and Sam’s Clubs, as well as remodeling existing stores and investing in the logistics network. Wal-Mart opened Sam’s Clubs in Hangzhou and Suzhou this past year, bringing the total number of Sam’s Clubs in China to 10. The retailer said it expects to open several more in the next three years. Greg Foran, Wal-Mart China president and chief executive officer, said the retailer plans to remodel about 45 stores this year, 55 next year and 65 the following year. The company will also invest further in its logistics and distribution network. It opened a distribution center in Wuhan in August. Next month, Wal-Mart will unveil a new distribution center in Shenyang, and the company plans to open more distribution centers over the next year.
At Wal-Mart’s annual meeting for the financial community on Oct. 14, Doug McMillon, president of Wal-Mart International, said, “Our new store performance is improving. I’m encouraged in particular by what we’re seeing in China with our recent openings.”
In markets such as China and Brazil, Wal-Mart is facing headwinds from wage inflation in the high single digits and in some cases, double digits. “We’ve made great progress at driving our units-per-labor-hour up,” McMillon said. “In the years I’ve been involved in international, I haven’t seen a circumstance like we have in some of our markets, where wage inflation is in the high single digits and in some cases, double digits.”
China is third among international markets in terms of return on investment, “but we can see a path to dramatically improving our return on investment in China over time,” McMillon said. “So there’s upside in China.”
“China is a key strategic market for Wal-Mart and we are very well positioned to serve the country’s emerging middle class with great products they can trust,” said Wal-Mart Stores ceo Mike Duke. “Our management team is committed to continued growth in large and smaller cities across China, and doing it in the right way. Our investments in new stores, innovation and retail supply chain will create jobs and support China’s plans for growth.”
The openings will create nearly 19,000 new retail jobs, according to Wal-Mart.
McMillon said the company is also closing stores in China “that for location reasons or layout reasons are never going to generate the return that we need them to generate.” The closures represent up to 9 percent of the total store portfolio, but only 2 to 3 percent of total sales volume through next year.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews