Betsy White

What Walmart Can Learn from Uniqlo to Boost Apparel Profits

With the launch of a Norma Kamali plus-size line this fall, Walmart has another great opportunity to save itself from its apparel woes. After all, the average woman is a size 14-16, so Walmart’s designer line is sure to appeal to plenty of consumers. But in order to effectively compete against arch-rival Target and get back to profitability in apparel, Walmart needs better strategies overall. From designing to merchandising and marketing, the folks in Bentonville would do well to study that uber-successful behemoth of basics – Uniqlo. First, Walmart needs to forget the competition’s strategy entirely. Though Target’s made quite a name for itself among bargain-hunting trend setters, the Walmart shopper is largely looking for mainstream basics. But who says wardrobe mainstays must be frumpy? Without going over-the-top but still infusing current styling, Uniqlo successfully peddled enough t-shirts, cardigans, and skinny jeans to rake in $7 billion in global sales last year. Another ingredient in Uniqlo’s secret sauce is quantity. The company aims to “ensure stores are stocked with the appropriate number of garments in terms of color and size so that customers can always get the products that they want.” Finally, Walmart needs to rethink its store traffic patterns. It’s no secret the retailer’s recession-era wins have been skewed to the less profitable grocery segment. People need to buy food even in bad times. As the country emerges from the economic slump, Walmart would do well to position its apparel across the wide aisle that separates food from the rest of the store stock.

Maverick Capital Moves into Clothing Retailers

Lee Ainslie, founder of New York-based Maverick Capital Management, purchased shares of retailers Men's Wearhouse and Abercrombie & Fitch during the first quarter. Both represent new positions for Ainslie, whose flagship hedge fund has gained 14% a year since its 1995 inception, twice that of the S&P 500 Index. Ainslie warned of "moribund consumer spending" in his 2009 annual letter. Still, he sees value in those two companies. He purchased nearly 3 million shares of both Men's Wearhouse, equaling 5.3% of the float, and Abercrombie, totaling 3.3% of shares outstanding. He now ranks as the fifth-largest shareholder of Men's Wearhouse and the seventh-biggest owner of Abercrombie. Men's Wearhouse has declined 12% in the past month as Abercrombie fell 19%. Interestingly, both companies swung to losses in the latest report periods.

J Crew Bridal Boutique Now Open

Getting married has never been so hip. Now open at 769 Madison, J.Crew's first-ever Bridal Boutique is a place to kick back and soak up some pre-marital bliss. From the sumptuously decorated ground floor to the luxe appointment salon downstairs, brides-to-be are guaranteed an experience that is, in true J.Crew fashion, comfy and casual without skimping on chic. At the store's kick-off event, Editor of Martha Stewart Weddings, Darcy MIller, bedecked in glistening J.Crew jewels, guided guests through racks of colorful cocktail dresses, sequined gowns and ruffled frocks, pointing out favorites and sifting through the lingerie drawers in a display table. Best of all? You don't have to hear wedding bells to get your shopping kicks at the Bridal Boutique. "We want everyone to feel welcome and comfortable," says head of Wedding Design, Tom Mora. "It doesn't matter if it's a wedding, a party, or a special event."

Why JoS. A. Bank's Profits Will Continue to Defy Gravity

Who cares if they are baggy, boxy, or (gasp!) even slightly shiny? The private label suits at Jos. A. Bank Clothiers are flying off the racks faster than you can say pinstripe. Ditto for ties, shirts, and other sartorial sundries as the men’s wear retailer managed to post an impressive 10 percent sales gain and a sharp rise in gross margin which translated to a 38 percent increase in first-quarter profits. The question now: how long can Bank keep it up? That’s not to say a company can’t continue to build on success. Bank’s been around since 1905 and weathered the Great Depression and other economic slumps. Indeed, CEO R. Neal Black reported that Bank’s achieved earnings growth in 34 of the past 35 quarters, making the current recession a mere blip on its radar. It’s the growth portion of Bank’s future strategy that demands attention. Over the past year, the retailer’s made the most of deep discounting (Doorbuster: get a $1300 suit for only $388.50!) and special offers such as the “no interest for six months” deal when customers spend over $500. Black did concede that shoppers continue to demand “aggressive pricing and eye-catching promotions,” especially now that buyers have shifted from purchasing pricier suits to sportcoats and shirts. But Bank certainly has wiggle room even if cotton prices continue to increase. The retailer’s balance sheet showed a 281 basis point improvement in gross margin, to 63.6 percent of sales.

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