Weak Clothing Sales Spur Wal-Mart Revamp

Wal-Mart Stores Inc., fighting weak clothing sales, is reorganizing its apparel business by moving dozens of jobs to New York and eliminating others at its sprawling Bentonville, Ark., headquarters.

The world's largest retailer is combining its product development and sourcing businesses into its existing brand office in New York and its Bentonville buying operation.

Wal-Mart merchandising chief John Fleming confirmed the change Wednesday, the same day Wal-Mart announced a broad licensing deal with Disney Corp. to sell a wide variety of Hannah Montana clothes and merchandise.

Licensing products with the popular Disney character is part of a range of efforts expected this spring from Wal-Mart to rekindle apparel sales that have lagged growth in other parts of the store, such as electronics, grocery and pharmacy.

Aaron Hunt, a spokesman for Disney Consumer Products, said there will be 140 items available under the deal, making it the largest licensing program yet with a single retailer for Hannah Montana merchandise. Some items, including some apparel and jewelry, will be exclusive to Wal-Mart.

Apparel has been a weak spot for Wal-Mart since a 2005 push for higher fashion, including skinny jeans, failed to sell. Executives say the retailer is now focusing on what it calls "key items", or more basic clothing staples like tanktops or shorts, with fewer styles but a wider range of colors and low prices.

It is also pushing for more license deals with popular brands.

Wal-Mart's New York office has grown from a small fashion-spotting outpost several years ago to an operation with about 75 people working near the offices of national clothing suppliers.

Dozens of brand development positions may be moved to New York from Bentonville and several dozen other positions in Bentonville may be cut as part of the restructuring, according to people familiar with the plan.

Fleming did not specify the number of positions to be cut but said in a statement that Wal-Mart will "be doing all we can to look after our associates as we move to the new structure".

Wal-Mart employs more than 12,000 people at its headquarters. Thousands more in the area work for vendors who sell to Wal-Mart and often hire former Wal-Mart employees for their in-house experience.