NEW YORK — The new face of retailing has a Wal-Mart complexion.
This story first appeared in the October 17, 2003 issue of WWD. Subscribe Today.
“So what do you think, are you prepared for us?” asked Helena Gadison, Wal-Mart Stores Inc.’s vice president of global sourcing at the 14th Annual Key Issues Seminar held here at the Fashion Institute of Technology.
The seminar, entitled “The New Face of Retailing: Its Impact,” drew a diverse group of industry executives who approached the broad topic from economic, vendor and retailing perspectives.
One of the most striking revelations came from Gadison, who said Wal-Mart’s employee base would grow to 4.6 million associates by fiscal 2007 from its current level of 1.4 million.
The $245 billion firm continues to focus on apparel, offering much business and much competition to many of the more than 350 attendees of the seminar, most of whom were vendors.
As if it were possible to do otherwise, Gadison said, “Keep your eyes on Wal-Mart,” noting more news of deals between the retailer and major national brands, à la July’s Levi Strauss Signature venture, could be on the way.
“The element that Levi’s can bring to the floor…it brings credibility,” she said. While declining to get into specifics about the retail giant’s mix of private and national brands, Gadison said, “You’ll see a consistent message in private label, but it’s not necessarily going to dominate the floor.”
The growing influence of private brands is where the seminar kicked off, with comments from consultant Emanuel Weintraub, who is also honorary chairman and founder of the seminar.
“They’re good and they’re going for excellent,” he said of retailers producing their own brands, as they vie for greater margins and exclusivity.
Turning to the overall economy, J.P. Morgan Chase & Co. senior economist James Glassman put a positive spin on the rest of the year and beyond. Indicators put economic growth in the third quarter at 6 to 7 percent, he said, up from about half that earlier in the year. Increased productivity, though, has stunted hiring for now.
“You can’t get job growth until you get the U.S. economy to grow faster than 3 percent,” he said. If all that follows, job growth should be around the corner. It takes time to benefit from the technology we put in place years ago.”
Hal Upbin, chairman and chief executive of Kellwood Co. said as the face of retailing evolves, his firm is changing in what he dubbed “The Retail Marathon.”
The key is diversification. While women’s wear still makes up 60 percent of Kellwood’s business, Upbin said the firm is seeking to broaden its offerings.
Kellwood is expanding into the increasingly upscale better market with a licensed Calvin Klein line. While he said better would not become a major piece of Kellwood’s business, he noted, “We believe in licensing as a way to grow the business.”
To score the Calvin license from Phillips-Van Heusen Corp., Kellwood partnered with GAV, a group comprising industry veterans who will handle the creative side of the business. Upbin called it “an example of the kind of guerrilla warfare you have to do.”
Still, he joked, “I don’t think Liz and Jones are quaking yet.”
Macy’s West president and ceo Robert Mettler was the final featured speaker of the seminar, and brought with him the department store view.
“The changing faces of our customers requires us to be different, too,” said Mettler. One example of this is the expanding American waistline. But retailers, he noted, “have to know not just how our customers are changing, but what those changes mean to them.”