NEW YORK – Wal-Mart Stores Inc. (WMT) Thursday said it has launched its own brand of urban apparel for women, aiming to lure consumers with lower-priced versions of trendy fashion in denim, velvet and silk.
The brand "Metro 7 (search)" aims at women aged 25 to 45 and is rolling out initially in 500 stores, mainly in urban areas, said Wal-Mart marketing chief John Fleming.
Wal-Mart seeks to revive U.S. sales by improving its fashion credentials, hoping to entice consumers who shop for food at its stores but look elsewhere for hip apparel. The company has not been able to capitalize on its George line in the United States, even though the clothing brand is No. 1 in Britain.
Metro 7 dresses up Wal-Mart's more family-oriented fashions, with silk camisoles, sequined tank tops and glittery tunics, but sticks to lower prices synonymous with the retailer's brand image. Fleming said the styles would be updated regularly, but did not give a timeframe.
"This really appeals to a fashion-forward consumer," Fleming told Reuters. "Our strategy is to become more relevant to customers who are already in the store across more categories."
But analysts cautioned at the time that a foray into more expensive apparel would take the world's largest retailer away from its core expertise.
By targeting women over the age of 25, Wal-Mart gets a foothold in an apparel market that is not well served and could serve as a springboard to other segments, analysts said.
"They are taking small but very logical steps in expanding from their core," said Nick Greenspan, a partner in the London office of Bain & Co., a consulting firm. "The more successful they are here, the more they earn the right to expand in what they offer in clothing."
Metro 7 could pit Wal-Mart against lower-priced retailers that appeal to young consumers like Sweden's "cheap chic" trendsetter H&M (search) as well as traditional rivals like Sears Holdings Corp. (SHLD), the parent of Kmart, and J.C. Penney (JCP), which have already invested in campaigns to convey a hip image among teens and young adults.
Along with other retailers, Wal-Mart faces a challenging holiday sales season as hefty fuel costs cut into household budgets. On Thursday, Wal-Mart reported a 3.8 percent rise in same-store sales for September.
Wal-Mart will advertise its new line with print and online commercials, including ads in fashion bible Vogue, as well as in-store promotions and special events, Fleming said. One ad features actress and former Miss Universe Dayanara Torres.
Fleming became chief marketing officer in April and had worked 19 years at Target Corp. , which boosted its image by enlisting haute designers like Isaac Mizrahi to create discount fashion and feature in slick advertising campaigns.
"We're not trying to be Target, we're trying to be Wal-Mart but more relevant to our customer," Fleming said.
While Wal-Mart's brand identity centers on a lowest-price strategy, its new marketing will stress "always great value, and value encompasses more than price," Fleming said.
Wal-Mart may create other apparel brands, as well as electronics, home furnishings and food, and is building up its research team to see where the demand lies, Fleming said. He did not rule out buying into already established brands.
Wal-Mart shares rose 45 cents, or 1 percent, to $43.95 on the New York Stock Exchange.