Walmart Seen as Finding Its Stride in Apparel

Walmart appears to be finding its groove in its apparel and merchandise offerings, as it builds large private label brands and plans for more e-commerce growth in the coming years, competing with the likes of Target and Amazon.  

The retailer’s promotion this month of Denise Incandela to executive vice president of apparel and private brands at Walmart Inc. marks a significant moment in the evolution of its apparel offerings, observers said. 

Incandela, who has helped steer Walmart’s apparel evolution in recent years and brings longtime fashion industry experience to the role, will oversee not just apparel, but also private brands for general merchandising in all categories, the retailer has said. 

Through a combination of acquisitions, high-profile collaborations and its own creative push, Walmart has in recent years built up a roster of private label brands and elevated lines, including Time and Tru, Eloquii Elements, Jeans by Sofia Vergara and the Free Assembly line it launched in September. 

Retail watchers have taken note that as the retailer courts a shifting demographic of shoppers online, Walmart has sought to refine its apparel mix in recent years, seeking to strike a balance between basics and more fashion-forward styles. 

“I think this just fits a part of a longer continuum of what Walmart is attempting to do, to really leverage and elevate its overall brand proposition,” said Stephanie Wissink of Jefferies. “Walmart has some of the largest brands already in apparel.”

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“There is going to be a savviness around what the Walmart consumer expects,” she said. “Walmart has always been viewed as much more of a mechanically driven organization — supply chain, scale, grocery, and general merch had fallen a bit to the side.”

She continues, “I think Denise now is being given charge to say, ‘Our general merchandise needs to not necessarily be mechanical, it needs to be merchandise driven, it needs to be visually appealing, it needs to be on-trend.’ 

“I heard someone in the trade recently say Walmart’s going to talk to its consumer as a modern consumer, design-savvy, with access to influence from content and trends, and so you’re not speaking to [them] as a basics customer in apparel anymore,” Wissink added. 

Walmart has cultivated its shifting fashion image by adding hundreds of brands to its offerings, including Levi’s, Champion and Jordache, as well as the private lines. Walmart has said it now has 13 general merchandise private brands that it said qualify as billion-dollar brands, and that three of its apparel lines are $2 billion brands.

Competition from Amazon, and the receding importance of once prevalent fashion staple brands including Old Navy, may have pushed retailers like Walmart and Target to try to capture some of that market and boost their e-commerce infrastructure, said Jessica Ramírez of Jane Hali & Associates. 

“The way that Walmart and the way that Target have restrategized and reshaped what apparel looks like within their own private sectors has been pulling in the customer,” said Ramírez.  

“There’s been shifts within the retail industry — we had Old Navy, for a long time, be very strong, and we’ve seen some weaknesses in recent quarters. And I think some of these companies can pick up the share.” 

“When it comes to apparel, I do think Walmart and Target have an advantage over Amazon,” she added. “You don’t hear much about those Amazon private labels…private labels can be strong for any retailer, but has to be done well. 

“Even just in the way you merchandise, and the way that you brand those brands themselves — Walmart is headed that way with the brands that they are handling,” she said. 

In its fourth-quarter earnings call this month, Walmart executives indicated the retailer expects its global e-commerce sales to surpass $100 billion in the next couple of years, an ambitious goal that observers see as within reach for the retailer. 

“We’re seeing underlying rates of growth in e-commerce that would suggest that that’s achievable and support that number,” said Wissink of Jefferies. 

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