As Clothing Retailers Struggle, Walmart Sees an Opportunity

At a time when apparel brands such as Lucky, J. Crew and John Varvados are sliding into bankruptcy and analysts are forecasting the final chapter of the department-store era, Walmart has made yet another decisive grab for a share of the apparel segment. Earlier today, the big-box retailer announced the debut of a private-label brand called Free Assembly, available online and in 250 of the retailer’s brick-and-mortar locations. The autumn collection kicks off with 30 items for women and 25 for men, ranging from men’s carpenter jeans for $27 to the dressier Boyfriend Blazer for women, priced at $45, which is also the top of the price range. In a statement, Walmart Fashion Group svp Denise Incandela described Free Assembly as a “modern fashion brand… born from thoughtful, simple design, quality fabrics, modern silhouettes and styles updated for today.” Free Assembly joins an arsenal of private label brands already hanging from Walmart’s racks, including Time and Tru, George, Terra & Sky and Wonder Nation. Private label collections are nothing new. Macy’s sold its own branded clothing lines as early as the 1890s. In the 1920s, JCPenney grew to 1,000 stores in large part through sales of private-label clothing brands including Pay Day and Nation-Wide. In its heyday, Sears was a private-label colossus, and still sells house brands including Covington, Canyon River Blues and Apostrophe. But while private labels historically suffered from something of a geeky stigma, Target—Walmart’s nearest big-box competitor—helped change that perception with its own “cheap chic” brands including 2016’s Cat & Jack kids’ collection and Universal Thread, a brand of women’s jeans launched in 2018. Today, private labels enjoy mainstream respect and, according to data from NPD, make up a third of overall dollar sales in the apparel segment. Walmart’s Incandela said the chain is “serious about establishing Walmart as a fashion destination,” and the addition of Free Assembly is only the latest move in that effort. Aside from its extensive private-label offerings, Walmart also has Bonobos, the menswear brand it purchased for $310 million in 2017. The retailer also offers a variety of “elevated” brands via big-name partnerships, including Ellen DeGeneres’ EV1 and Sofia Jeans by Sofia Vergara. And in May, Walmart made a foray into the increasingly popular clothing resale space by partnering with ThredUp, adding a feature to its site that let shoppers browse 750,000 preowned items from labels ranging from Nike to Coach and Calvin Klein. That Walmart has chosen the pandemic era to beef up its apparel offerings—especially with a private label clearly meant to appeal to younger shoppers—is probably not a coincidence. A new line priced between $9 and $45 is more likely to appeal to shoppers at a time when many of them are especially price sensitive, notes Bruce Winder, author of the new book Retail Before, During & After Covid-19. “This brand has a decent chance of resonating with younger millennials and Gen Z,” Winder said, “and seems to take on a minimalist feel and offers good value, which is back in style—especially as these customers are hit hard by the pandemic from an employment perspective.” And while Walmart is making a grab for customers at a time when many competing apparel retailers are vulnerable, Winder added that it’s also clearly responding to pressure from the 800 lb. gorilla of retail, Amazon. Last week, Amazon announced the debut of a new section on its mobile app called Luxury Stores, an invitation-only “store within a store” that will give shoppers access to high-end designer fashion, starting with Oscar de la Renta’s pre-fall and pre-winter collections for 2020. Amazon said last week that customers have already bought 1 billion pieces of apparel via its mobile app alone. Walmart, Winder said “sees the writing on the wall as competitors like Amazon invest in this category and have recently announced the launch of an upscale line,” he said, referring to the Luxury Stores. "This is a big bet for Walmart as fashion contributes huge margins for the retailer and is under fire from online players and hip new digitally native brands.”

Fashion News

As Apparel Retailers Struggle, Walmart Grabs for More Market Share With New Private Label Brand

Free Assembly is only the latest move in Walmart's bid to be a major fashion player

Robert Klara

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Robert Klara