The company is launching a new in-house clothing brand called Free Assembly. The 55-piece collection ranges from $ 9 to $ 45 and is sold online and in 250 pieces Walmart (WMT)Shops.
In a blog post, the company said it wanted to offer “high quality pieces” at lower prices. Examples are a structured blazer for $ 45 and a fishtail parka for $ 40. Some of the items are made from organic cotton.
The main business is groceries, which make up more than half of sales. However, groceries are a notoriously low-margin business. That̵
7;s why Walmart has expanded its range of clothing and housewares in recent years.
Four new retail brands were launched in 2018: Time and Tru for women, Terra & Sky plus size, Wonder Nation for kids, and George for men.
Clothing accounts for less than a tenth of Walmart’s sales, compared to around 20% at target (TGT)according to submissions. But clothing has higher profit margins than food. Selling private labels is more profitable for Walmart than selling brands.
Walmart therefore hopes that customers who come into stores to buy groceries will also buy new shoes or jeans.
“If you drive with the traffic [groceries] and you can then get customers to buy their home and clothes … that helps a lot with the margin, “Walmart CFO Brett Biggs said at an investor conference this spring.
Competitors have also had success with their own private labels, including Target, Amazon (AMZN) and even Costco (COSTS).
More recently, Walmart made its first foray into the apparel resale market through a collaboration with ThredUp, which added fashion brands like Coach, Nike, Calvin Klein, and Michael Kors that weren’t sold at Walmart.
—CNN Business’ Nathaniel Meyersohn contributed to this article.