Wal-Mart Will Use Show to Test New Casual Lines
By KELLY NOLAN and KAREN TALLEY July 9, 2008; Page B2B
Wal-Mart Stores Inc. is taking another step in its move back into the fashion world. However, unlike its splashy and unsuccessful previous attempt at upscale apparel, this time the retailer is playing it "casual."
On July 19, Wal-Mart plans to show its recently licensed children's and teen fashion brands at Fashion On The Square in San Francisco. The company will be the only retailer participating in what the event's organizers call "the largest outdoor runway fashion extravaganza on the West Coast."
Despite the flashy promotional tag, Wal-Mart says it is not trying to make a big splash at the event. Even though this event is believed to be the first fashion showing of its new styles -- l.e.i from Jones Apparel Group Inc. and Op from Iconix Brand Group Inc. -- the company said it is participating as a community service.
"We're taking time out to help a good cause, supporting those who want to build careers in the industry [as well as education programs that the event is meant to aid] before getting back to what we do best: Working hard to bring families great prices on apparel brands they want," said Wal-Mart spokeswoman Linda Blakley.
This is a far cry from a couple of years ago when Wal-Mart was pitching tents in New York's Times Square as one of the industry's most prominent events, Fashion Week, was going on a few blocks away in Bryant Park. At that time, the company also cut an agreement to show 116 full pages of its fashions in Vogue magazine.
But the drive to be a destination for cutting-edge, higher-priced fashions flopped. Customers used to Wal-Mart's low-priced and more basic offerings didn't take to the approach, and the company acknowledged it overshot.
This time the apparel expected to be shown in San Francisco consists of the l.e.i junior jeans line and California surfer brand Op.
But even though these are both casual lines, more akin to what customers are used to, Wal-Mart is still antsy about its appearance.
The company -- involved in the show since November -- pulled out after a press inquiry, said Y'Anad Burrell, the show's creative director.
The retailer said it had decided participating was not in the best interest of its branding strategy, Ms. Burrell said. But a few hours later, Wal-Mart was back in, according to Ms. Burrell.
Wal-Mart's Blakley declined to say whether the retailer did or didn't drop out of the showing and then come back in, but acknowledged that internal "discussions" did result from the media call. Wal-Mart felt press coverage might imply the retailer was making another attempt at high fashion. But that is not the case, Blakley said, adding, "That's not who we are. That's not what our customer expects from us."
Actually, analysts like Wal-Mart's choice to be in the show, saying the company's role could be part of a new fashion strategy that makes more sense for the retailer.
"With the economy being the way it is, shoppers are trading down," said Shawn Woodhull, a retail analyst for Wikinvest.com1. "By participating, Wal-Mart is trying to reach more people out there who want fashion at the right price."
Wal-Mart's clothing will be presented alongside designs from nine others, including street-wear label Apple Bottoms by Nelly. Chris March, a former participant in Bravo's "Project Runway" television show, will also appear.
Wal-Mart's move is "a great, second coming-out party - a way to show they are still trying to be relevant without going over the top," said Carol Spieckerman, president of newmarketbuilders, a retail strategy firm.
But Wal-Mart isn't completely shying away from higher-end fashion by name designers.
Norma Kamali, known for jersey-draped dresses, sleeping-bag coats and ensembles made from gray sweatshirt material, is creating a clothing line for Wal-Mart that is expected to roll out in 350 of Wal-Mart's 3,800 stores this fall.
More fashion-forward offerings may actually be in Wal-Mart's best interest. The company is building fewer stores in the U.S., so it must use what it has. That means a big name that usually provides higher profit margins than more general merchandise isn't a bad idea, analysts say.
