Wal-Mart's Failed Fashion Merchandising?


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July 2, 2004

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Two years ago, Wal-Mart set its sights on serious fashion with the launch of its "George" clothing line. At the time, fashion retailers worried that the retail goliath (which already holds 25% of the US apparel market) would conquer the category the same way it had so many others -- crushing competition with ruthless efficiency and rock-bottom prices. A new AP article catches up with the story today and shows that George hasn't been nearly the hit people expected. The clothes are inexpensive and well-made, so what's gone wrong?
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"The problem... 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 analyst Mandy Putnam."


Another factor is the public view that Wal-Mart just isn't the place you go to buy fashionable clothers. Underwear... activewear... sure. But jackets and skirts and dresses?

"'There is an inherent conflict between creating a fashion item and doing it on a mass scale,' [analyst Todd] Slater says.

Wal-Mart's [general merchandise manager for apparel] Celia Clancy disagrees, but concedes that one of the retailer's biggest challenges has been editing the collection for the diverse demographics and extensive store base of the U.S. market. 'The trends in the metro U.S., don't always cut it in more rural areas,' explains Ms. Clancy. Among shoppers -- even loyalists -- Wal-Mart suffers from the nagging perception it sells only commodity clothing."



It'll be interesting to see what changes Wal-Mart makes in its marketing for "George"; as companies go, they aren't known for just standing pat and accepting a small piece of the market.

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