Retail
Walmart Adds Another Fashion Line to Shore Up Apparel Business
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Walmart Inc. (NYSE: WMT) announced Friday that it has acquired online intimates retailer Bare Necessities for an undisclosed amount. The online-only business will continue to operate its own website and the company’s CEO, Noah Wrubel, will, at the same time, “oversee” the intimates category for both Walmart.com and Jet.com.
The acquisition follows Walmart’s purchase last week of plus-sized fashion start-up Eloquii and other acquisitions over the past couple of years that have expanded Walmart’s fashion business. The objective, of course, is to appeal to consumers, especially younger consumers, who are not among Walmart’s traditional customers by competing harder against Amazon.com.
The head of Walmart’s e-commerce fashion business, Denise Incandela, wrote in a blog post:
The acquisition of Bare Necessities fits well into our broader acquisition strategy, which includes two different types of companies: 1) category leaders with specialized expertise and assortment that can help enhance the customer experience on Walmart.com and Jet.com (think Hayneedle, Moosejaw and Shoes.com) and 2) digital brands that offer unique products customers can’t find anywhere else (think Bonobos, Modcloth and the recently-acquired ELOQUII). Bare Necessities fits into the former.
Analysts at Morgan Stanley, cited by Reuters, reported that Walmart has an 8.6% share of the apparel market last year, followed by Amazon with 7.9% and Target with 4.8%. Amazon is expected to surpass Walmart’s apparel share this year.
There was one more interesting comment from Incandela:
Bare Necessities will continue to operate its site as it has and will run as a standalone and complementary brand to our other eCommerce sites. Over time, for those brands that would like to serve additional customers, we will work to integrate the Bare Necessities’ assortment onto Walmart.com and Jet.com.
Bare Necessities lists among its brands Spanx, DKNY, Calvin Klein, Bali, Maidenform and Playtex. Integrating these brands into Walmart’s main e-commerce sites would be good for the company, but Walmart has to convince the brands that such a move would be good for them.
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