Walmart, which has been snapping up trendy online apparel brands like Bonobos, ModCloth, Shoebuy and Moosejaw, is making another fashion play, this time partnering with Lord & Taylor. The department store, which has been trying hard to spark a fashion renaissance in its brick-and-mortar stores, plans to open a distinctive “online experience” on Walmart.com starting next spring.
The new line is expected to bolster the Bentonville, Ark.-based retailer’s already smokin’-hot e-commerce sales, which it estimates will be up 40% next year. And it could boost sales at Lord & Taylor’s stores, as well, which are battling the lower sales and declining store traffic plaguing department stores. (Lord & Taylor is owned by HBC, which also owns Saks Fifth Avenue and Hudson Bay, roiled by the abrupt departure of CEO Jerry Storch last month.)
“Our goal is to create a premium fashion destination on Walmart.com,” says Denise Incandela, head of fashion for Walmart’s U.S. e-commerce, in the announcement. “We see customers on our site searching for higher-end items, and we are expanding our business online to focus on adding specialized and premium shopping experiences, starting with fashion.” With a dedicated store on the site and its app, it says Lord & Taylor will reach “exponentially more shoppers than it currently does.”
The stepped-up offering also increasingly pits Walmart.com against Amazon, which is emerging as fashion’s most unstoppable force. Last year, Amazon’s apparel sales clocked in at $22 billion, or 6.6% of the market, estimated by Cowen & Co. Clothing sales are growing fast, up 28% overall last year, and up 38% among Prime subscribers.
By 2021, Cowen forecasts that will increase to 16.2% of all clothing sales. Writing about its most recent quarterly results released late last month, Cowen predicts all others will have lost the race by the end of this year: It expects Amazon to be the #1 U.S. apparel retailer, as it continues to gain traction in other retail verticals.
Private-label is a growing part of Amazon’s formula. It is said to be investing aggressively in women’s lines like Lark & Ro, Ella Moon, Paris Sunday and Mae, a lingerie brand. And L2, the digital think tank, reports that Amazon’s best-selling, private-label fashion brand is its Amazon Essentials, frequently dominating the site’s “Best Seller” listings. It’s especially strong in men’s clothing, and L2 reports that it “poses an especially big threat to basics brands like Hanes and Dockers.”