Go to the Globe and Mail homepage

Jump to main navigationJump to main content

A shopper looks through racks of George clothing at a Wal-Mart in Toronto (Darren Calabrese)
A shopper looks through racks of George clothing at a Wal-Mart in Toronto (Darren Calabrese)

Wal-Mart makes over cheap-chic George line Add to ...

It may seem like the last place to head for fashion, but Wal-Mart Canada Corp. is betting big it can change people's perceptions.

After struggling to become a destination for cheap chic, the discount titan is racing to pump up its trendy George fashion line, taking the style lead from its sister chain Asda in Britain, where George is the top apparel brand.

More Related to this Story

The world's largest retailer is banking on George to help shake its image as a dowdy, basics apparel retailer. Still, Wal-Mart fumbled with George in its U.S. stores several years ago. And in Canada, Wal-Mart faces stiff competition from Loblaw Cos. Ltd. and its fast-growing, cheap-chic Joe Fresh Style line.

"Of course we want more," Lesya McQueen, senior vice-president of apparel at Wal-Mart Canada, said on Monday. "Rest assured, we have very aggressive targets."

Fashion is appealing to Wal-Mart because its profit margins can be more than twice those of other categories such as household goods. And Wal-Mart's sales have been sluggish amid economic uncertainty and a skittish consumer.

While the chain already is the second-largest apparel retailer in Canada, its customers buy basics such as underwear, socks and T-shirts and turn elsewhere for trendy outfits, its research suggested. And customers are confused by Wal-Mart's array of private labels, including 725, Bum and Penmans.

Now Wal-Mart is investing heavily in George, dropping its other apparel labels to focus almost solely on that line, which last year made up just 25 per cent of its clothing offerings. It has given its George fashions a makeover after doubling the size of its product development team to about 40, partly by snatching away employees from key rivals.

"Wal-Mart needs to develop this opportunity or lose more customers to others," said Kaileen Millard-Ruff, vice-president of retail at Gfk Research Dynamics. "Canadians proved that regardless of income, they want fast fashion - look at Joe Fresh."

With Seuss-tastic hats, the Joe Fresh fashion show in 2009

At its U.S. home base, Wal-Mart is grappling with sagging apparel sales after shifts in styles and leadership. In Canada, the discounter's clothing sales have been flat in the first half of 2010, estimated market researcher Trendex North America. Last year, its apparel business lost market share last because its cash-strapped customers scaled back on purchasing in the recession, it said in a recent newsletter.

"The apparel management team is betting the farm on the success of the re-launch of the George brand in September," Trendex president Randy Harris said.

Ms. McQueen said she has taken lessons from George both in Britain and the United States. In the U.S. stores, for example, Wal-Mart stumbled with a $30 George 100-per-cent cotton men's shirt that required ironing. The new line in Canada features a $10 no-iron men's dress shirt made of blended fabrics.

Walmart Canada launched its new George clothing line from England in 2004

The British stores had a winner this year in a $30 pea coat, which the Canadian team is taking and re-fashioning this fall into a longer coat for $40, she said.

While Joe Fresh is believed to be almost a billion-dollar-a-year brand, Wal-Mart sees bigger potential for George, Ms. McQueen said. Last year, Loblaw's Joe Fresh apparel business ranked in 10th place among Canadian apparel retailers, with Sears Canada in the No. 1 position and Wal-Mart second ranked, according to Trendex.

"By building a fashionably credible brand, we see that there is significant market share for us to go after," said Ms. McQueen, dressed in a $20 black-and-grey hound's tooth George dress.

To refashion its image, Wal-Mart is bumping up its apparel marketing budget in September, including George television commercials and rare fashion magazine ads. It's introducing more stylish-looking signs in stores, prominently positioned near the entrance. Its displays put the spotlight on key items of the season, such as skinny jeans and "jeggings," a jeans and leggings hybrid.

Ms. Millard-Ruff said Wal-Mart will have to prove that it can come up with fashions as accessible as Loblaw's Joe Fresh. "Canadians are open to finding fashion in non-conventional fashion destinations."

 

More Related to this Story

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular