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For years, Walmart has been the place to shop for low-cost essentials. Now, the retail giant is officially pushing into fashion with a capital F — once again competing with Amazon, and hoping to get a bigger slice of the $7.2 trillion retail pie.
The transition was made gradually. The company hired Saks Fifth Avenue veteran Denise Incandela in 2017 (she is the executive vice president of Walmart US’ clothing division), and designer-to-the-stars Brandon Maxwell in 2021. And this month, Walmart president and chief executive officer Doug McMillon told analysts that the company is ready to step on the gas when it comes to fashion.
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“We punched below our weight in general merchandise, especially in apparel and home for a long time, maybe forever,” McMillon said. “We now have tools that we can use to do the general merchandising business that is not We had to grow it before.”
Maxwell, who is the creative director of Walmart’s Scoop and Free Assembly brands, is helping to drive Walmart’s shift in fashion, bringing his own high fashion experience to his brand, as “Project Runway: a judge and stylist, especially for Lady Gaga.
“There’s this idea that fashion is coastal. Fashion is everywhere,” said Maxwell.
“People everywhere embrace fashion,” Maxwell said. “They love it, they want to feel good. It doesn’t surprise me that our customers are enthusiastic about the offer and how they style it and how they incorporate it into their lives.”
At the Free Assembly, Maxwell puts out elevated essentials, from blazers to dresses and jumpsuits. At Scoop, a one-time “It” girl fashion store that Walmart turned into a brand, it has to reach out more.
“Scoop is really for a very fashionable customer,” Maxwell said. “We talk a lot at Scoop about taking out the last closet. So we have those very staple pieces that are fashion forward, but then we do our best every season to give our customers something that is very trendy and very now.
“The possibilities are endless,” Maxwell said. “What I see with the Scoop customer is that she is willing to take risks. She’s excited about fashion, and very aware of what’s going on, and has a very strong sense of herself. And it was really fun to try certain things and see them on the customers and see them react.”
Walmart is now willing to take a chance on fashion as well.
Maxwell’s efforts are part of the wider clothing changes Incandela has implemented since she started the business. She oversees 10 brands with more than $1 billion in sales, and Walmart is steadily transitioning from basic apparel to fashion. Under her guidance, the retailer hired Maxwell and added more than 1,000 national brands, including Reebok and Chaps, as well as Sofia Jeans by Sofia Vergara and Love & Sports by Michelle Smith and Stacey Griffith.
The retailer has more than enough room for this kind of evolution, which was found in a consumer survey a few years ago that 80 percent of the shoppers’ closets were filed to look out of their price range.
“They were getting their fashion in other places because we were not meeting the price points,” said Incandela.
“Walmart should be democratizing fashion,” she said. “We have the scale, we have the strategic supplier relationships, and now we have our own designers and design team that we built in New York, which is new for us, building these brands. So instead of building labels, we’re working to build brands.”
Walmart US registered fashion sales of $29.5 billion last year, according to an estimate from Coresight Research that includes third-party sales, but excludes Sam’s Club.
A decade ago, the retailer focused its business on getting high-speed basics right and capitalizing on the opportunity to sell fashion staples, which at the time included pieces like striped polo shirts.
The giant was good at what it did, but now it’s upping its game thanks in part to its big digital transformation.
Under McMillon, Walmart has entered a whole new type of business, embracing digital and carrying more than 420 million stocking units online. At last count, about a year ago, 200 million of those were in fashion, with the market introducing higher-end third-party brands.
The company, which has 4,600 Walmart stores in the United States alone, spent decades as the biggest in retail only to find itself behind Amazon.
Now, Walmart is the second-largest player in fashion, according to Coresight, which took in $56.4 billion from Amazon last year — nearly double Walmart’s take.
To achieve that, Amazon took business from almost everyone, from Walmart to the mall. Now brands from Victoria’s Secret to Coach have set up shop on Amazon, acknowledging that their customers exist and that they are not big enough to compete with each other.
But Walmart is big enough to go toe to toe with Amazon. And in fashion, he can still be caught back, if he keeps the right attitude.
The Bottom Line is a business analysis column written by Evan Clark, deputy managing editor, who has covered the fashion industry since 2000. It seems every other Thursday.
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