On Sept. 21, Walmart (WMT 0.53%) launched Free Assembly, a new private-label clothing line for men and women. The fashion brand will be available online and in 250 stores, offering elevated style essentials at value prices. The new brand aims to offer timeless staples that have staying power. The retail company tapped Dwight Fenton, the former lead designer at Bonobos, to lead the brand. Fenton also designed for Old Navy, J. Crew, and Vineyard Vines.

Model wearing a Free Assembly top.

Image source: Walmart.

The new fashion destination

Denise Incandela, SVP Women's Group, Elevated and Online Brands, wrote about Walmart's goal to become a major contender in fashion retail: "Through our ongoing strategy of expanding our assortment for our customers, we've shown that we're serious about establishing Walmart as a fashion destination."

Walmart has been expanding its fashion presence. The latest launch is a continuation of past fashion collaborations with influencers; Walmart's May 2020 deal with ThredUp added almost 1,000 brands to its online offerings. The ThredUp deal brought popular brands like Champion and Levi Strauss to Walmart. This expanded Walmart's fashion reach on top of its existing private-label brands, like Wonder Nation, Terra & Sky, and Time and Tru. The retailer also has clothing lines like Scoop and Sofia Jeans by Sofia Vergara among its exclusive "elevated" brands.

Value without compromising comfort

Free Assembly's fall collection is comprised of over 30 items for women and 25 for men at price points of $9 to $45. SVP Denise Incandela highlighted a $40 organic selvedge denim product that offers quality, style, and value, which is what the brand aims to bring to customers.

The Free Assembly line seems to be in an advantageous position, even as the COVID-19 pandemic rages on, with consumers seeking both comfort and value. People are spending more time at home, as well as working from home, gravitating toward more casual clothing. Value-focused retailers are also thriving as people react to ongoing economic uncertainty. Consulting firm McKinsey states, "Tied to the concern about the state of the economy is an increasing consumer focus on value—especially for essential categories."

This launch is well timed ahead of the important holiday shopping season. Holiday retail sales typically represent about 20% to 30% of a retailer's full-year sales, according to the National Retail Federation (NRF). Walmart should witness an increase in revenue if it's able to draw new customers or boost the average amount spent per shopper during this important shopping period.

A one-stop shopping destination

Since the pandemic-driven economic downturn, consumers have done more one-stop shopping, buying household supplies, food, and clothing from big box retailers such as Walmart, Target, and Costco. These companies have fared better than many specialty retailers this year as consumers did fewer shopping trips but often spent more per trip. Costco's stock is up 17% year to date, and Target's stock is up 18% during the same period.

This launch of the new fashionable as well as budget-friendly line Free Assembly is a positive for Walmart as it boosts the company's fashion offerings and helps it better compete with mass-market retailers, like Target, with a strong fashion product. Furthermore, an in-house clothing brand could entice new shoppers to see Walmart as a go-to for a range of household necessities.