Wal-Mart (WMT) Takes Another Run At High Fashion

By Douglas A. McIntyre Published Apr 24, 5:15AM EDT

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There were too many headlines to count when Wal-Mart (WMT) got into the business of selling high-fashion, higher-price clothes a couple of years ago. The number of headlines increased when the project failed.

Wal-Mart has decided to head down that path again, and its failure at the new enterprise is already in the cards. According to The Wall Street Journal "Higher fashion apparel and bedding have higher profit margins than other merchandise — about 31%, a full 10 percentage points higher than almost every other category."

That may be true, and the new clothes may be very, very nice. They are also much more expensive than almost any Wal-Mart shopper can afford. The big chain’s typical customer is relatively poor. Many don’t even keep bank accounts. They come to Wal-Mart to cash their checks. They come because the price of everything from food to drugs to shoes is less expensive than almost everywhere else and the quality is good.

Wal-Mart is launching its new fashion lines into the teeth of a period when many of its customers cannot afford to make their mortgage payments, buy a tank of gas, and keep their families fed. They are certainly not going to buy fancy clothes.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.