December 7, 2023


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The Supply Side: Analysts applaud Walmart’s effort to raise fashion credibility

Walmart is not a fashion destination, but high-profile fashion designer Brandon Maxwell hopes to change that as the creative director for the retailer’s exclusive, higher-end Free Assembly and Scoop fashion brands, including various men’s and women’s clothes.

The announcement came just as Wells Fargo analysts reported Amazon had unseated Walmart as the leading U.S. apparel seller. The report said Amazon’s fashion platforms, including third-party, grew apparel and footwear sales by 15{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} during 2020, exceeding $41 billion in business.

Wells Fargo said that is 20{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 25{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} higher than Walmart’s apparel business as the No. 2 player. Amazon’s fashion and footwear sales represent about 12{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of all apparel sold in the U.S. and 35{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of all clothing sold online.

The report found Amazon’s overall wallet share for apparel and footwear increased 2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} during the pandemic to 18{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. The report also found one in three survey respondents will return to pre-pandemic clothing and footwear shopping habits, signaling the category is ripe for normalization trends. That includes more trips to brick-and-mortar stores for fashion purchases.

Walmart said the partnership with Maxwell has been in the works for months. Maxwell is a fashion designer with roots in east Texas, which he says grounded him in the belief that everyone deserves to have access to well-designed clothing at prices they can afford.

The collaboration is a first for Walmart’s private brand apparel business. Maxwell will be responsible for the collection design for Free Assembly and Scoop brands, including providing input into material costs sourcing, production, and brand marketing initiatives.

“Working with Walmart has long been a dream of mine,” Maxwell said. “Like many people across the country who live in a small town, Walmart was the destination for everything where I grew up in Texas, including clothing. This partnership allows me to bring the experience and joy of fashion to countless people who live in small towns across the country.”

He will oversee four seasonal collections each year for Free Assembly and Scoop brands. Walmart said Maxwell’s designs will show up for the Christmas holidays later this year, and the complete collections will drop next spring.

“Brandon is a powerhouse in the fashion industry,” said Denise Incandela, executive vice president, apparel and private brands at Walmart. “His designs are beautiful, youthful, timeless and expertly tailored. Our shared fashion values of accessibility and commitment to incredible design and quality make him an ideal partner for Walmart. Bringing his distinctive design talent to our elevated brand collections of Free Assembly and Scoop allows Walmart to offer customers stylish, high-quality fashion at an extraordinary value.”

Walmart has made many attempts at revamping and growing its apparel business. The retailer has maintained an enormous apparel business through the decades as a mass retailer that sells socks and underwear. However, Walmart has not been able to become a fashion destination online or in its stores. Analysts have said there are plenty of reasons for Walmart to want to expand its apparel business, including higher-margins associated with fashion and pent-up demand from consumers who have spent much of the last year in sweatpants or comfy lounge clothes amid the pandemic.

Jan Kniffen, an international retail consultant with J. Rogers Kniffen Worldwide, said Walmart has had several unsuccessful apparel efforts. He mentioned the George brand launch a decade ago, the enormous private brand launch five years ago for women, men and kids, and more recently, signing celebrities like Ellen DeGeneres and Sofia Vergara as apparel brands. For extensions into more elite fashion, Walmart acquired Bonobos and had Lord & Taylor as a seller on the online marketplace.

Kniffen said Walmart has the right leadership with Incandela overseeing apparel.

“I have known Denise for a long time, and I can’t imagine a better choice to put Walmart on track to be competitive in fashion with Target and Amazon,” Kniffen told the Northwest Arkansas Business Journal. “Walmart has proven that it can compete with anyone, including Amazon. Now that they have gotten serious about fashion, there is no reason that they cannot succeed.”

He said Incandela is positioned well to use a 4,700-store footprint, a successful website and a fast-growing third-party business to be serious in fashion, apparel and accessories. He said adding Maxwell is just the next step. He said Walmart might have been the largest apparel retailer in sales, but it has never been the nation’s leading fashion retailer. He credits Walmart with being a leader in “mass fashion” and said the company would only improve with the new fashion partnerships and Maxwell.

Carol Spieckerman, CEO of Spieckerman Retail, said Walmart’s alleged fashion failures were overhyped in the media. Even so, Walmart’s fashion position is overdue for an overhaul. She said comparing Target’s designer partnerships with Walmart’s deal with Maxwell is apples and oranges. She said Maxwell would serve in more of a multibrand advisory role.

“He isn’t designing a one-off capsule collection then leaving,” she said. “Walmart is positioning itself to make up for lost time and margin in discretionary categories like apparel. In addition to its recent brand partnerships, Walmart’s hookup with BigCommerce promises to onboard many new brands to Walmart’s online marketplace. When combined, all of these partnerships and Walmart’s clicks and bricks organizational shifts will support apparel growth online and add much-needed interest in-store.”

Spieckerman said the two-pronged approach is necessary if Walmart is to battle Amazon for apparel dollars while taking advantage of pent-up demand for brick-and-mortar shopping. Amazon has played a significant role in diluting brand impact for the entire industry by creating many private brands and onboarding hoards of no-name Chinese brands on its marketplace.

“Walmart has little choice but to play the owned-brand game in response,” Spieckerman said. “It is the only way to drive differentiation and maximize Walmart’s ongoing brick-and-mortar scale advantage. Walmart is giving shoppers a reason to cross the aisle from grocery as the pandemic winds down and before the holiday shopping season ramps up.”

Outsiders have wondered what Maxwell, who is Lady Gaga’s fashion go-to, could get from working with Walmart. Kniffen said this lets Maxwell do a mass line for people like those he grew up with.

“Don’t all the designers want a mass line once they are famous? And it has to be very lucrative as well,” Kniffen added.

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