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Is Wal-Mart Making Another Fashion Faux Pas? | The Motley Fool

No fashion sense
A decade ago, Wal-Mart sought to keep pace with rival Target and its trendy clothing lines by launching fashions from Max Azria, Norma Kamali, and other designers. The retailer’s aspirations even went so far as to cause it to open an office in the middle of Manhattan’s fashion district.

Not surprisingly, it was a flop. Where Target developed collaborations with designers over time and apparel has grown to represent some 21% of its revenues, Wal-Mart shoppers apparently aren’t willing to play along with more than basic fashion, instead coming to its stores primarily, if not almost exclusively, for price.

People who buy designer clothes don’t shop at Wal-Mart for them, and those who look to the retailer for rock-bottom prices were put off by the elevated price points for the designer labels. Wal-Mart was forced to admit it made a mistake and jettisoned the concept altogether, and had to woo customers back with a big everyday low-price marketing campaign.

Above its pay grade
A couple of years ago, Wal-Mart quietly eliminated its everyday low price mantra, and switched to a “dynamic pricing” model where prices change based on supply and demand. But only a year or so later, CEO Doug McMillon said the chain was going back to basics and “playing offense with price” to reconnect with its customers.

Now it’s about to make another fashion/price faux pas, this time with grandiose ideas about becoming a “premium fashion destination.”

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Is Wal-Mart Making Another Fashion Faux Pas? — The Motley Fool.

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