July 3, 2004

Wal-Mart Attempts to Change its Ill-Fashioned Image Falls Short

It appears that Wal-Mart's attempt to change its ill-fashioned image is falling short, though some within WM would have us believe otherwise.

Wal-Mart's fashion dilemma

The Associated Press
7/2/04 9:12 AM



The Wall Street Journal

Two years ago, Wal-Mart Stores Inc. set out to do what was once unthinkable: get serious about fashion.

The world's largest retailer -- known for being cheap but never chic -- had bulked up its fledgling product-design team and dispatched buyers and designers to Europe for inspiration. Most importantly, Wal-Mart announced it would roll out the contemporary apparel line George, which already had enjoyed a decade of success in the United Kingdom.

Stateside, nervous fashion retailers bristled. With apparel sales already stalled, the industry worried it would be the next victim of the so-called Wal-Mart effect. The Bentonville, Ark., retailing chain is known for dominating nearly every consumer product category it sets its sights on -- from toilet paper to toys -- forcing down prices and flattening competition along the way. As the largest seller of clothing basics, such as jeans, sweats and underwear, Wal-Mart sales already accounted for roughly 25 percent of the U.S. apparel market.

Four seasons out, George, which is targeted to women 30 to 50 years old, is hardly the megahit industry denizens feared. Although Wal-Mart insists sales of the George are ahead of plan this year, apparel suppliers, analysts and observers say sales have been far below what the fashion world was expecting.

"(George) is not flying off the shelves," says Marshal Cohen, senior analyst with NPD Group, a Port Washington, N.Y., market-research firm that tracks apparel sales.


One problem seems to be the fact that:

Not that the merchandise is drab or costly. Sharply-priced George offers Chanel-inspired tweed jackets and flouncy floral skirts, with most items less than $20. The problem, rather, appears to be with Wal-Mart's execution. In-store displays are small and often hard to find. Some feel it has suffered from a lack of advertising in a heavily promotional industry. Others perceive George as less a fashion collection than a gaggle of basics in better colors and fabrics.

"When you launch a fashion brand you should do it with 360-degree support in terms of how it is merchandised and placed in stores and you need to talk about it -- difficult issues for Wal-Mart," says Mandy Putnam, an analyst with Retail Forward, a marketing research and consulting firm based in Columbus, Ohio.

George's wobbly start raises the larger question of whether Wal-Mart's low-price, commodity approach is too restricting for a fashion brand. "Wal-Mart is really known for price," says Todd Slater, an analyst with Lazard, a New York investment bank. "But that is not the primary goal in buying fashion apparel."


Yet, still, one is left to wonder if other factors besides those mentioned in the above referenced article may be contributing to some shoppers habits, particularly among the population of momen shoppers that these fashion are targeted and geared to attract.

Maybe, as big as they are, they can manage to afford to stay both in denial and in business all at the same time.

Who knows?

Read the article in full, here.

Posted by Morgan on July, 3 2004 at 03:14 PM