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BOSTON — By George, Wal-Mart has ambitious plans for the apparel brand created by its U.K.-based subsidiary, Asda.
The label, which ranks second in apparel sales in Britain, will get its own digs and its name over the door this September, when Asda will open two branded boutiques outside London. Wal-Mart also is taking George into wholesaling, reportedly preparing it for distribution to Seiyu, the Japanese retailer in which Wal-Mart has a minority stake.
Asda will open a 12,000-square-foot George store in Leeds, a midsize city in northern Britain where it is headquartered, and an 8,000-square-foot space in Croydon, a suburb about 16 miles south of London. Both stores are part of a yearlong concept test. In terms of scale, the stores are large for the U.K., ranking close in size to those of such brands as French Connection, Zara, H&M and Top Shop.
An Asda spokeswoman declined to speculate on how far and fast George stores might be rolled out. “It’s a case of wait-and-see,” she said.
Both stores will carry misses’, juniors’, men’s wear and children’s apparel and footwear.
The company is aiming for trend-savvy customers who live in densely populated areas. That demographic can significantly broaden Asda’s traditional suburban customer base, according to a source within the firm.
“We’re looking for customers who can’t easily get out to Asda, as well as to reach our existing customers when they’re in different shopping moods,” the source said. “When they’re out on the High Street [main shopping street], they may be looking for something special to go out in. When they’re in Asda picking up their groceries, they may be looking for something more essential, like a T-shirt.”
George, introduced 12 years ago at Asda, is the U.K.’s second-biggest apparel brand by volume, behind Marks & Spencer, according to an Asda spokeswoman. As of May 4, the brand captured 6.5 percent of the British apparel market, pulling in roughly $1.6 billion annually.
George is the only apparel line sold at Asda and is carried in 235 of Asda’s 260 stores, in dedicated departments ranging from 2,500 square feet to 20,000 square feet. The label offers basics and fast-fashion styles developed and produced in fewer than eight weeks. New merchandise hits floors every four weeks, the source said. It recently has expanded into plus sizes, petites, tweens, teens and maternitywear and also is the number one children’s wear retailer in the U.K.
To court trend-minded High Street customers, George stores will stock the more forward, “fast-fashion” parts of the label’s range, the company source said. Prices will be consistent with Asda, as will methods of merchandise display, including brushed-chrome fixtures and items clustered as mix-and-match outfits rather than piles of basics.
Current plans do not include designing any exclusive pieces for the new stores, the Asda spokeswoman said.
Therese Byrne, editor and publisher of Retail Maxim, called the move a “penetration strategy” in line with Wal-Mart’s global goal of capturing urban customers. “Wal-Mart is going to eventually do a Mini-Me version of itself, selling only apparel and food,” Byrne predicted. “Convenience is the last mile everybody wants.”
Isolating apparel in its own concept gives Wal-Mart “better insight and more feedback into how the customer shops the category,” said Deborah Weinswig, analyst at Salmon Smith Barney.
George isn’t the first concept Asda has spun off and scaled down. It also operates a 17,500-square-foot, food-only store in Walthamstow, a London suburb. Asda’s average-size footprint is 50,000 square feet, although it operates some as large as 100,000 square feet.
About 60 percent of Asda’s floor space is devoted to food, with the remainder, general merchandise. George accounts for only about 15 percent of Asda’s square footage per store.
George is growing at a rapid clip globally, thanks to Wal-Mart’s reach. The brand is sold in Germany, South Korea, Canada and the U.S. Wal-Mart has been fairly aggressive with its American expansion of George — less than a year after testing men’s wear in 2001, the company expanded to footwear and women’s apparel and placed the label in 2,780 U.S. stores. Unlike in the U.K., though, George always will represent only a portion of Wal-Mart’s apparel offerings in the U.S., company officials have stressed.
Weinswig said taking George to Seiyu in Japan “once again provides an opportunity for them to learn. Japan, in particular, tends to be a demanding retail market.”
Indeed, John Menzer, president and chief executive officer of Wal-Mart’s international operations, made the company’s approval of George clear last week when he wore one of the label’s suits onstage at the company’s annual meeting in Bentonville, Ark., and touted it as a “best practice” for apparel.
The line, named for Next plc founder George Davis, is designed from offices in Lutterworth, England, and is led by managing director Andy Bond and design director Kate Bostock, who oversee more than 300 employees. Teams there coordinate with Wal-Mart’s domestic product development team, led by Claire Watts, although there are indications the U.S. George collection will ultimately become more casual than its U.K. counterpart. Corresponding with the casual-Friday culture, “weekender” styles will be designed and sold here.
In a presentation in November at the WWD/CEO Summit in New York, Bond said George represents “affordable fashion and a phenomenal combination of design, quality and price.”
And the opening of George’s first freestanding stores doesn’t mean Asda believes growth in its own stores has reached its full potential. Asda plans to open between 30 and 40 of its own stores over the next three years. And Bond’s aim is to have every Asda customer buy a George product; currently, only about 30 percent of Asda’s 11 million weekly customers buy a George item of clothing. “So you can imagine what a huge challenge I’ve got,” said Bond last year. “But what a huge opportunity, as well.”