Walmart (WMT) is reportedly rolling out several new in-house apparel brands as it aims to expand its fashion cred. The news comes as Amazon is said to be grabbing more apparel market share from the country's biggest brick-and-mortar retailer and its peers.
X Bloomberg, which acquired presentation material that Walmart provided to suppliers, said the new store brands include womenswear label Time and Tru, plus-size brand Terra & Sky and kids line Wonder Nation.
The new low-cost clothing brands follow last year's acquisitions of online apparel sellers ModCloth and Bonobos, as well as a recently inked partnership with department store Lord & Taylor, indicating that Walmart is looking to broaden its appeal as a fashion and apparel destination.
Amazon has launched a number of private-label clothing brands of its own, such as men's line Goodthreads and shoe brand Franklin & Freeman, while Target (TGT) is in the midst of a mega-rollout of about a dozen or so store brands across its apparel and home decor segments.
Store brands generally mean higher margins for retailers at competitive prices, and if done well, can translate to brand loyalty for customers who won't be able to find the labels anywhere else.
IBD'S TAKE: Private-label, or in-house, brands could be the next big cash cow for Target and Amazon. Here's how.
Meanwhile, Walmart's assertive moves on the digital front point to a growing offensive online. The company is in discussions to buy a more-than-40% stake in Indian e-commerce leader (and Amazon rival) Flipkart, according to a Reuters report Friday. And a Walmart spokesperson confirmed to Investor's Business Daily earlier this month that its grocery delivery-related trademark filings point to active, ongoing projects.
Walmart rose 1.5% to 104.78 in the stock market today, and it remains in buy range with a 100.23 entry — modestly above its 50-day moving average as well — despite briefly dipping out of the buy zone. Amazon dipped 0.9%.
Walmart reports earnings next week.
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