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Walmart’s new fashion brand shows that it is increasing its ante as a fashion retailer

The company is launching a new clothing brand called Free Assembly. The collection of 55 pieces varies from 9 to 45 dollars and will be sold online in 250 Walmart (WMT)shops.

In a blog post, the company said it aims to offer “high quality pieces” at lower prices. Examples include a structured blazer for $ 45 and a fishtail parka for $ 40. Some items are made from organic cotton.

At Walmart (WMT) the main business is foodstuffs, which account for more than half of its sales. But groceries are a well-known low-margin business. So Walmart has been building on its clothing and home goods offerings in recent years.
Walmart has launched a new private label brand called Free Assembly.
In 2018, four new lines debuted with private labels: Time and Tru for women, plus Terra & Sky, Wonder Nation for children and George for men.
Clothing accounts for less than a tenth of Walmart’s sales, up from about 20% at Target (TGT), according to the declarations. But clothing carries a higher profit margin than groceries. And selling brands with private labels is more profitable for Walmart than names.

So Walmart hopes that when customers walk into stores to buy groceries, they will also pick up new shoes or jeans.

“When you manage traffic with [groceries] and you can get customers to buy homes and clothes … that helps a lot with margins, ”Walmart CFO Brett Biggs said at an investment conference this spring.

Rivals also had success with their own clothing brands, including Target, Amazon (AMZN) and even Costco (EXPENSES).
Most recently, Walmart made its first foray into the clothing resale market through a partnership with ThredUp that will add fashion brands not sold to Walmart such as Coach, Nike, Calvin Klein and Michael Kors.

“Nathaniel Myerson of CNN Business contributed to this article.”

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