For decades, Walmart has been a place to shop for low-cost basics. Now, the retail giant is officially pushing into fashion with a capital F — competing once again with Amazon, and hoping to grab a larger slice of the $7.2 trillion retail pie.
The move has been a gradual one. The company hired Saks Fifth Avenue veteran Denise Incandela in 2017 (she is executive vice president of Walmart U.S.’ apparel 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.
“We punched below our weight on general merchandise, specifically in apparel and home for a really long time, maybe forever,” McMillon said. “We’ve now got tools that we can use to grow the general merchandise business that we didn’t have before.”
Brandon Maxwell and content creator Anna Mae Groves at a Walmart luncheon hosted for influencers following his Brandon Maxwell fall 2024 runway show at New York Fashion Week.
courtesy Walmart / Reynolds Fernandez
Maxwell, who is creative director of Walmart’s Scoop and Free Assembly brands, is helping drive Walmart’s attitude change when it comes to fashion, bringing in his own high fashion experience at his brand, as a “Project Runway: judge and as a stylist, notably for Lady Gaga.
“There’s this idea that fashion is coastal. Fashion is everywhere,” Maxwell said.
“People everywhere embrace fashion,” Maxwell said. “They love it, they want to feel good. It doesn’t come as a surprise to me that our customers are enthusiastic about the offering and how they style it and how they infuse it into their lives.”
At Free Assembly, Maxwell churns out elevated essentials, from blazers to dresses and jumpsuits. At Scoop, a one-time “It” girl fashion boutique that Walmart has transformed into a brand, he gets to stretch out more.
“Scoop is really for a very fashion-forward customer,” Maxwell said. “We talk a lot at Scoop about building out the ultimate closet. So we have those very staple pieces that are fashion forward, but then we try each season to give our customers something that’s very trend 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 she’s very aware of what’s going on, and she has a very solid sense of herself. And that has been so fun to try certain things and to see them on the customers and to see them react.”
Walmart is now willing to take a chance on fashion, too.
Maxwell’s efforts are part of broader apparel changes that Incandela has implemented since she joined the business. She oversees 10 brands with more than $1 billion in sales, and has been steadily switching Walmart over 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.
There is more than enough space for this kind of evolution at the retailer, which in a consumer survey a few years ago found that 80 percent of its shoppers’ closets were filed with looks out of its price range.
Walmart fashion department.
Mark Steele
“They were getting their fashion elsewhere because we weren’t serving up those price points,” Incandela said.
“Walmart should be democratizing fashion,” she said. “We have the scale, we have the strategic supplier relationships, and now we have the designers and our own design team that we built in New York, which is all new for us, building out these brands. So instead of building labels, we’re working to build brands.”
Walmart U.S. logged 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’s focus was on getting its high-velocity basics business right and earning the opportunity to sell fashion staples, which at the time, included pieces like polo shirts with stripes.
The mass giant was good at what it did, but now it’s upping its game thanks in part to its large, digital transformation.
Under McMillon, Walmart has leaned into a whole new kind of business, embracing digital and carrying more than 420 million stock keeping units online. At last count, about a year ago, 200 million of those skus were in fashion, with the marketplace bringing in more higher-end third party brands.
The company, which has 4,600 Walmart stores in the U.S. alone, spent decades being the biggest everything in retail only to find itself behind Amazon.
Now, Walmart is the second largest player in fashion, according to Coresight, which clocked Amazon at $56.4 billion last year — almost double Walmart’s take.
To get that big, Amazon took business from just about everybody, from Walmart to the mall. Now brands from Victoria’s Secret to Coach have set up shop on Amazon, acknowledging that their customers are there and that they’re just not big enough to compete head to head.
But Walmart is big enough to go toe-to-toe with Amazon. And in fashion, it can still catch back up, if it 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 appears every other Thursday.