Blog: Leonie BarrieWal-Mart's fashon mis-steps

Leonie Barrie | 25 October 2006

Wal-Mart’s plans to take its clothing lines more upmarket – and attract new customers along the way – seem to have backfired. Saying it expects to post a rise of just 1% rise in October same-store sales, the discount retailer now acknowledges it must refocus on basic clothing items after putting too much emphasis on higher-priced fashions. As chief executive H Lee Scott Jr told analysts on Monday: “That’s not where the money is going to be made.”

So why on earth did executives embark on this strategy in the first place? The idea at the time was to try to lure a broader range of shoppers into the stores, not just those who were in search of rock-bottom prices on home goods and foods but also those who could be persuaded to pay a little bit more to be at the cutting edge of fashion. It was also an attempt to see off competitors who are either treading on Wal-Mart’s toes in the basics business or seeing soaring sales of their trendy bargains.

But it now seems the company “moved too far too fast” with its fashionable clothing lines like Metro 7, intimidating its regular customers who were more comfortable with its fashion basics like jeans and T-shirts. Opening a New York trend-spotting office and even sending Wal-Mart clothes down the catwalk at Fashion Week seems to have had little impact on its target audience. “We need to remember who we are,” Scott added – and it may well be that by forgetting its roots the retailer has simply ended up alienating and confusing its core customers.


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