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Walmart Aims to Capture Market Share With New Private-Label Clothing Line

By Rich Duprey – Sep 21, 2020 at 9:41AM

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Ailing department store chains may give it a chance at success this time.

Walmart (WMT -0.65%) is looking to reach disaffected consumers by launching a new, private-label clothing brand called Free Assembly.

As shoppers abandon many mall-based department stores such as J.C. Penney (JCPN.Q) and Macy's (M -2.23%), the retailer is hoping to lure them in with modern styling at prices ranging from $9 to $45. The brand will be available beginning today at 250 Walmart stores and on its website.

Ad for Walmart's Free Assembly clothing line

Image source: Walmart.

Dressed for success

The project has been two years in the making and comes as Walmart has been investing more heavily in clothing. Last year it launched a jeans line by actress Sofia Vergara and jumped on the clothing subscription bandwagon by partnering with KIDBOX. The year before it acquired Eloquii, a plus-size fashion brand.

It's also made various e-commerce clothing acquisitions including Bare Necessities, Bonobos, and Modcloth. Not all of Walmart's fashion efforts have worked out -- it sold Modcloth two years after buying it -- but they follow Amazon's (AMZN -2.14%) move to become the largest online retailer of apparel.

According to Euromonitor, Walmart had a 1.9% share of the online apparel market last year compared to Amazon's 50.5% share.

Free Assembly's low prices allow Walmart to go after budget-conscious consumers who fled J.C. Penney, leading to its downfall, as well as mid-tier retailers like Macy's and Kohl's (KSS -3.93%), which are also struggling to keep their customers.

Walmart has made many fashion faux pas over the years; the retailer needs to prove that basic styling can win over consumers.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Stocks Mentioned

Walmart Stock Quote
$150.66 (-0.65%) $0.98
Macy's Stock Quote
$22.18 (-2.23%) $0.51 Stock Quote
$89.06 (-2.14%) $-1.95
Kohl's Stock Quote
$27.85 (-3.93%) $-1.14
J.C. Penney Stock Quote
J.C. Penney

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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