Just a week after Amazon debuted its Luxury Store within its app for the couture crowd, Walmart is following with its own private label bid for the fashion category.
Walmart is positioning its new line, called Free Assembly, as “a modern fashion brand with elevated style,” featuring casual looks with layered approaches that will make it marketable during any season. The Monday (Sept. 21) announcement also gave the retail industry a look at how Walmart is now categorizing its executive team and online structure, stemming from a recent reorg. Denise Incandela, who was once SVP Women’s Group, has now added “elevated and online brands” to her title.
In a statement, Incandela pointed out that the company’s fashion portfolio has expanded over the past few years and noted that Walmart has more than 1,000 brands online.
“Through our ongoing strategy of expanding our assortment for our customers, we’ve shown that we’re serious about establishing Walmart as a fashion destination,” she said. “And, now we’re doubling-down to offer customers something they couldn’t find at Walmart before — a fashion essentials-inspired brand for both men and women created by our in-house design team.”
Like Amazon, Walmart has been active in the clothing and apparel space, as Incandela indicated, including a joint venture with thredUP. Today’s move is most likely a reaction to the need for Walmart to get a private label brand in its online store to compete with department stores, which will be under pressure to sell at full-price this holiday season to keep revenue numbers as high as possible. Walmart also owns Sofia Jeans by Sofia Vergara as well as Scoop — a brand that Walmart revived last year. But it has had issues in the category.
“For example, three years ago, it snapped up Shoebuy (now Shoes.com) for about $70 million, purchased ModCloth for $50 million and acquired Bonobos in a $310 million deal,” says Yahoo Finance. “But in late August, it was revealed that the chain planned to divest Shoes.com to affiliates of private equity firm CriticalPoint Capital. Last fall, it agreed to hand over ModCloth to brand investment firm Go Global Retail, while some reports have suggested that Bonobos is still not profitable for the retailer.”
It could also be a move to stem its loss of market share in the category to Amazon over the past few years. According to the PYMNTS Whole Paycheck Tracker, Amazon logged $20.5 billion in the apparel category and $48.3 billion in 2019 for a 9.5 percent share of total consumer spending. In Q2 2020 it took and $16.2 billion for a share of consumer spend of 17.8 percent. Walmart went from $26.6 billion in the category in 2016 to $34.9 billion in 2019 for a 6.9 percent share of total spending. In Q2 Walmart fell behind substantially with $9.5 billion and a 10.5 percent share of spend.