Walmart’s raised fashion profile poses a threat to specialty apparel shops

Walmart has launched clothing lines with celebrity partners like Drew Barrymore and Sofia Vergara. It has also added popular brands such as Chaps, Justice and Reebok to its fashion mix to appeal to the 80 percent of its customers who shopped elsewhere for more expensive clothing. “It is a huge transformation on the apparel side,” said Denise Incandela, vice president of apparel and private brands for the retailer. The changes at Walmart may have a minimal impact on rivals such as Target but may be felt more by smaller specialty clothing retailers.

Walmart Fashion To Revolutionize Brand Image But Harms Clothing Retailers

Walmart has been collaborating with celebrity personalities in the past, such as Drew Barrymore and Sofia Vergara, but this time the retail leader is poised to alter its image from a cheap discount superstore to a fashion destination for stylish shoppers.

According to Reuters, the retailer is leveraging its low-cost and low-margin groceries practices to make Walmart fashion more accessible to consumers with high-profit, pricier apparel items. In practice, this means that they plan to provide enough fashionable options to be considered a serious clothing contender.

Additionally, Walmart’s strategy is to convert its core price-conscious and discount-driven shoppers into more fashionably aware consumers.

This might sound good from Walmart’s perspective, but there are negative ramifications for smaller clothing retailers. One concern is how many shops are already struggling to survive against the scale and size of Walmart stores, and once Walmart buys wholesale products are higher volume and lower cost margins, smaller shops will not be able to compete with lower prices on the same items.

Another negative impact this strategy has might also affect larger independant brand name clothing companies. For example, labels such as Carhartt, Tilly’s, Land’s End, and Abercrombie & Fitch, are posting declining revenues, and are struggling with brand stores that once thrived in American’s declining shopping malls.

For more insight into this topic, be sure to check out our feature on Sam Walton, the founder of Walmart, for a fascinating story about Walmart’s history.