Wal-Mart moving apparel function
Posted on Wednesday, January 30, 2008
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Wal-Mart Stores Inc. said Tuesday that it is reorganizing its apparel operations, moving merchandising functions to New York where, to date, it has had a relatively small presence.
The move could affect 150 to 200 people now based at the home office in Bentonville, according to people familiar with the apparel operation. Wal-Mart spokesman Linda Blakley declined comment on the number of employees who are potentially affected, but said it was “very small” given the context of the world’s largest retail operation, which employs 1. 3 million in its U. S. business.
Wal-Mart employs more than 12, 000 people at the home office.
John Fleming, executive vice president and chief merchandising officer, said in a statement that the move was designed to “strengthen apparel relevance and speed of product to market.”
“We understand that organizational changes cause uncertainty for individuals, but we’ll be doing all we can to look after our associates as we move to the new structure,” Fleming said.
Employees affected by the move will have the opportunity to apply for jobs at the home office as well as at the expanded New York operation, Blakley said.
The apparel-buying operation will remain in Bentonville.
In July, Dottie Mattison moved from her post as vice president and chief merchandiser for Wal-Mart. com in San Francisco to the New York office to oversee women’s apparel, shoes, jewelry and accessories. That move occurred when Claire Watts, formerly executive vice president of the apparel merchandising division, left the company after efforts to sell more upscale clothing were largely unsuccessful.
Retail experts said Wal-Mart’s latest move makes sense and is probably overdue.
“That’s where the apparel business takes place in the United States. It doesn’t make a whole lot of sense to me to try to change that,” said George Whalin, who runs Retail Management Consultants in Carlsbad, Calif.
He said apparel buyers should be in New York as well. Keeping the buyers in Bentonville “takes a certain arrogance on their part” but is part of the Wal-Mart culture, he said.
Patricia Edwards, a fund manager with Wentworth, Hauser and Violich in Seattle, said Wal-Mart appears to be moving the right functions to New York, where the company could gain better access to suppliers and potential suppliers in the fashion industry.
“It’s got to be easier to do that in New York,” she said.
Her firm, which has $ 14. 5 billion in assets under management, has increased its Wal-Mart holdings to just under 400, 000 shares since it started to buy in November, she said.
Wal-Mart’s stock closed Tuesday at $ 49. 01 a share, up 30 cents or 0. 62 percent on the New York Stock Exchange. It has traded as high as $ 51. 44 and as low as $ 42. 09 over the past year.
In his statement, Fleming said the restructured apparel business is “built around brands that make clear statements and whose teams are accountable for financial returns; and fully leveraging suppliers to efficiently deliver the product the customer wants.”
The New York office will be responsible for brand positioning, assortment development, textile design, vendor selection, sampling and cost negotiation, he said. The Bentonville buying office will select products, set prices and allocate merchandise to stores, Fleming said. In September, Wal-Mart bought exclusive rights to the surf-lifestyle brand Ocean Pacific, which has been around for three decades, and has been reported to be pursuing other exclusive brands. Camille Schuster, a marketing professor and retail consultant in Escondido, Calif., questioned whether Wal-Mart should be pursuing higher fashion after its Metro 7 line failed to catch on with shoppers last year. “They just don’t have that image,” she said.
To contact this reporter: spainter@arkansasonline. com
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