Walmart: A Fashion Giant Awakens

Walmart has had a powerhouse fashion business for a generation or more.

But the best? Not so much.

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Now Denise Incandela’s plan to change that is coming  together.

In her six years at the mass merchant, the Saks Fifth Avenue veteran — who is now executive vice president of Walmart U.S.’ apparel division and private brands — has made some real progress. The assortment has been updated, the online shopping experience has been enhanced and the company has developed new ways of communicating the changes to shoppers.

She says that it is all going to really start to pop as the company rolls out its new store model to another 300 locations his year, on top of the 30 already converted in an early test.

“We have this incredible traffic,” Incandela told WWD in an interview ahead of a store tour of one of the remodels later this week. “My whole career in fashion has been, ‘How do we get people in the store?’ And here we have the people in the store.”

About 140 million people visit Walmart U.S.’ 4,000 stores stores or website each week.

Wells Fargo analyst Ike Boruchow estimated this summer that Walmart sold $30 billion in softline goods last year. While that put Walmart well behind Amazon, with gross merchandise value estimated at $67 billion in apparel last year including third-party sales on its marketplace, there are still only eight other companies that sell more than $10 billion annually.

Denise Incandela is remaking Walmart’s fashion business.
Denise Incandela is remaking Walmart’s fashion business.

Incandela said Walmart is now gaining market share in apparel and can get a bigger piece of the shoppers’ fashion wallet.

“Having been in the fashion business for 20 something years before I came here…brands go up and down, right?” she said. “And so they’re in favor, they’re out of favor. Retailers go up and down. Especially in this time of influencers in social media, you can change brand perception — build it, and they will come.

“People want great product at a great value,” she said. “That’s what people want. And so you can change perception, you just need to do a lot of it at the same time.”

There’s a certain boldness in that conviction, and the sustained push to make Walmart more of a fashion destination.

The company proved it was good at what it did — basics at low prices — but repeated efforts to move into more fashionable looks fell flat.

A decade ago, Walmart executives described the retailer’s apparel business as 50 percent basics with 40 percent “fashion basics,” or “a polo shirt with a stripe.” The balance fell into the category of “trend.”

That just didn’t inspire enough of Walmart’s millions of grocery shoppers to steer their cart into the apparel department for much beyond socks and T-shirts.

Incandela led Walmart’s apparel e-commerce business when she first joined the company and recalled, “We did some research which showed us that the customer was actually spending in higher average unit retail [prices] than we were offering her. And so we learned pretty quickly that we needed to expand our private brand assortment to cover more of her closet needs as well as bring on national brands in a meaningful way.”

Incandela built a team — hiring from higher-end chains such as Nordstrom, Macy’s, Saks and Neiman Marcus and more direct competitors like Kohl’s and Target — and sought to bring more to the offering while eliminating goods that were not “lifting the Walmart brand.”

The changes have touched the business far and wide.

  • Four of the company’s opening price point brands — Time and Tru, Wonder Nation kids tops, No Boundaries and Athletic Works — produce sales of more than $2 billion each and are getting new attention.

  • Walmart hasn’t been afraid to make big changes, relaunching the $1 billion intimate brand Secret Treasures as Joyspun with a new look and new branding.

  • Big names have been brought on board including Brandon Maxwell, Sofía Vegara and former Milly designer Michelle Smith and SoulCycle cofounder Stacey Griffith, who are building out the athletic brand Love & Sports.

  • And national brands like Reebok and Celebrity Pink have been added.

Sofía Jeans by Sofía Vergara
Looks from the Sofía Jeans by Sofía Vergara collection.

Incandela said Walmart’s apparel business has increased its penetration with households making at least $100,000 by offering sharp prices, yes — the company looks to have at least a mid-teen price gap with the competition. But it’s not relying on low cost to make the sale now.

“You can’t lead with price when it comes to fashion,” she said. “It’s an emotional, inspiring, discovery category. You have to lead with the product. And then of course we’re going to provide an extraordinary value, but we need to inspire you.”

The store remodels — which consumers and the industry are going to be more familiar as they roll out more aggressively — remove the big price signs above the fashion department, providing more separation from the store’s other offerings.

“It just changes everything because all of a sudden you realize this isn’t just about price, this is about great quality,” Incandela said.

That’s a message that she said social media — and the influencers Walmart has on board — can help communicate to shoppers, who continue to change.

“There’s a generation of people who really cared about where they bought stuff and that was important to them,” Incandela said. “Younger Millennials and [Gen] Z are less focused on, ‘I got it at this fancy department store or luxury store,’ and more focused on getting a great item at incredible value.

“Customers are changing, expectations are changing,” she said. “We should be leading into it. This is our time.”

This is a time when change seems possible at Walmart, which has steadily been reinventing, discovering a new kind of nimbleness that has allowed it to grow in e-commerce, get into the marketplace business and make other bets in technology.

It’s a lot for a large company.

Walmart U.S.’ first-half sales rose 5.4 percent to nearly $111 billion, producing operating income of $6.1 billion.

And fashion seems to be moving to the fore of that change, even if the discretionary side of the business in general is weaker in retail right now.

Walmart Love & Sports

“I have such incredible respect for the dominance we have in the grocery business, but in order for the business model for Walmart to sing, we have to also be strong in the higher margin categories, the style categories,” Incandela said. “Apparel is an important part of Walmart’s overall strategy in terms of taking the business model to where it needs to go. And I think there’s a huge appreciation for the importance of winning in apparel beyond socks and underwear.”

And for Incandela and much of the team she’s hired, winning at Walmart also brings a certain catharsis of a post-luxury life.

“Many of us have been supporting the top 1 percent for our entire careers,” Incandela said. “So to be able to take the capabilities and talent that went into those roles and bring it to the 99 percent is really exciting and frankly motivating.”

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