Make no mistake, Wal-Mart Stores Inc. is serious about fashion.

Norma Kamali will create an exclusive collection for the world’s largest retailer in an agreement brokered by Cherokee Inc. The licensing deal is long term, and the designer will establish a lifestyle brand under her own name that will encompass categories such as women’s wear, children’s clothing, accessories, footwear and home — all at Wal-Mart’s mass prices.

At a time when some retail chains are reconsidering the merits of long-term fashion lines by marquee designer names, Wal-Mart appears to be moving full-steam ahead with the concept. More deals are in the pipeline, sources said.

Kamali told WWD on Wednesday that she first met Wal-Mart executives two years ago, but nothing came of it until talks picked up again recently. She was intrigued by Wal-Mart’s reach, which may enable her to have an impact in households across America.

“I saw this as an opportunity for me to put together a lot of the things I am personally interested in,” said Kamali, who has been a proponent of wellness concepts and has incorporated them in her collections and at retail. “I feel that, at this point in my life, I have an opportunity to take all of the things that I like to do, and help women not just feel good, but also with their image and self-esteem. You have an environment where you can reach a lot of people.”

Kamali said she always wanted to do a line at the mass level because “the balance is fantastic. There are always things you want to do at a great price and can’t, because you don’t have the volume.”

The designer didn’t disclose details about the collection, but said it will be centered around fashion essentials. “It’s commodities that are appropriate for everybody’s wardrobe,” she said of the collection, which she chose to call Norma Kamali.

“It was my idea because it’s my name,” she said. “I am doing this, and I feel that it’s something people should know I am doing. I will also carry it in my store, because I am proud of it.”

Wal-Mart is “a very interesting situation and a new kind of venture for them and for me, and I like this new experience,” Kamali said. “We are starting with women’s and focusing on setting up an agenda for women’s and take it from there. If it’s something that fits the store and works, I have the opportunity to present whatever ideas I have.”

This story first appeared in the February 28, 2008 issue of WWD.  Subscribe Today.

Dana Telsey of the Telsey Advisory Group said, “Wal-Mart is getting quite fashion savvy, so it could be a good move for them. It will be really interesting to see how they price the line.”

Telsey added that she also will be interested to see how mass customers react to the Kamali name. “I’m not sure the customer will know the name,” she said. “They are going to have to build a lot of marketing around it.”

Wal-Mart’s fashion profile is rising as rival Target Corp. has lost Isaac Mizrahi, who is departing to take over the Liz Claiborne brand. In the next few months, the Bentonville, Ark.-based retailer will introduce Ocean Pacific and L.E.I. fashions, and it also is preparing investment in athletic apparel and shoes and licensed goods.

Wal-Mart said this month that early spring sales of its private label apparel, where key items cost $10, were “very promising as a leading indicator,” while Citigroup downgraded Target’s stock after finding fault with the firm’s women’s apparel offerings.

Kamali is an industry icon who burst onto the scene some four decades ago. She made a splash in 1980 when she introduced a sportswear collection using gray sweatshirt fleece. It was an instant hit and won her a Coty Award in 1981. She also is known for her parachute dresses and sleeping bag coats and, in the Nineties, launched the OMO Gym activewear collection.

More recently, Kamali has devoted much time to wellness concepts, and last year opened a Wellness Cafe in the rear lower area of her multistory boutique on West 56th Street in Manhattan. She also has devoted much time to teaching and mentoring children in the New York City public school system.

In recent years, Kamali has been involved in several projects that have been phased out. She designed a special collection for the Spiegel Catalog called Norma Kamali Timeless, and created a contemporary collection for Moret Group’s Everlast division, which was doing about $15 million annually. This month, Kamali split from Moret Group’s Everlast division after three years at retail.

“Norma was great. She did some great work for us, but she started going in a new direction so we both agreed to terminate our relationship,” said Gary Herwitz, chief operating officer of The Moret Group.

Robert Margolis, chairman and chief executive officer of licensor and brand management company Cherokee, said, “This landmark deal combines the talent and expertise of Norma Kamali with Wal-Mart’s reach and vision. We believe this partnership will deliver extraordinary results and will far surpass any third-party partnerships we have facilitated to date.”

Wal-Mart’s efforts with designer and trendier fashions have had mixed results. Its Metro 7 line launched in 500 doors, and expanded to 1,500 doors too quickly, which proved to be a mistake. It scaled back the line to 500 doors, and Metro 7 is said to be doing much better. The discounter’s tailored George ME by Mark Eisen collection, meanwhile, flopped at retail and was discontinued last year.

Wal-Mart was unavailable for comment.