Wal-Mart Nears Web Deal with Lord & Taylor
October 19 2017 - 6:29AM
Dow Jones News
By Suzanne Kapner and Sarah Nassauer
Wal-Mart Stores Inc. has a solution for retailers doing battle
with Amazon.com Inc.: join forces to give shoppers an
alternative.
The world's biggest retailer is near a deal with Lord &
Taylor that would give the department store dedicated space on
walmart.com, according to a person familiar with the matter. Such
an agreement would be the first step in creating an online mall
that shoppers could access from Walmart's website, this person
said.
Additional brands that could eventually be included in the
project are men's clothing company Bonobos and online retailer
Jet.com, both of which are owned by Wal-Mart, as well as other
traditional chains, this person said. Financial terms of the
potential Lord & Taylor partnership couldn't be learned.
Wal-Mart is seeking to build an anti-Amazon coalition as it
begins to ramp up e-commerce sales after several years of sluggish
growth. Last year Wal-Mart bought Jet, placing its founder Marc
Lore at the head of U.S. e-commerce operations. Then Wal-Mart made
a series of smaller e-commerce purchases including Moosejaw,
Bonobos and ShoeBuy, both to expand its online selection and gain
give it access to brands built online, executives have told
investors.
Now Wal-Mart aims to make walmart.com more attractive to premium
brands and high-income shoppers, an area Amazon has also pursued in
recent years.
Over the next year, Wal-Mart wants to "elevate the Walmart.com
brands," Mr. Lore said last week. The changes include using blue
branded boxes to ship walmart.com orders, redesigning the website
and working on partnerships to gain access to more premium
products, Mr. Lore said.
Last month, Wal-Mart said Denise Incandela will become its head
of fashion for U.S. e-commerce. Ms. Incandela was most recently
chief executive of shoe company Aerosoles and is the former
president of digital for Ralph Lauren and chief marketing officer
for Saks Fifth Ave.
Amazon has made an aggressive push in recent years to win over
fashion brands. It scored a coup in June when Nike Inc. agreed to
sell some of its products directly to the e-commerce company, and
over the years it has reached agreements with department store
stalwarts such as Calvin Klein, Kate Spade and Levi Strauss.
Amazon has also extended its reach into physical stores, buying
grocer Whole Foods, and striking a deal with department store
Kohl's Corp. that lets shoppers return goods bought on Amazon at 82
Kohl's locations.
Wal-Mart is framing itself as the only e-commerce operation that
will be able to challenge Amazon directly, despite the fact that
its website draws about half as many monthly U.S. visitors,
according to the research firm comScore.
"Wal-Mart is positioning itself as a clear No. 2 in the space,"
said another person familiar with the discussions.
Like other department store chains, Lord & Taylor, which is
owned by Hudson's Bay Co., is struggling with sluggish sales and
falling foot traffic. Sales at Hudson's Bay's department store
group, which includes Lord & Taylor, fell 1.6% in the three
months to July 29.
Joining with Wal-Mart would help draw shoppers to Lord &
Taylor's website, which attracted an average of 849,000 unique
monthly U.S. visitors from February through July, according to
comScore. That compares with 160 million for Amazon.com and about
79 million for Wal-Mart.com.
Smaller brands and retailers are wrestling with how to balance
exclusivity with the need to grow online as Amazon and Wal-Mart get
bigger, said Roshan Varma, vice president in the retail practice at
AlixPartners. "It's a little bit of a prisoner's dilemma. Are you
going to defect or stay on your own?"
Higher-end brands have shied away from joining with Wal-Mart
because of its discounter roots. But several brand executives said
they need to rethink their distribution models to compete in a
world increasingly dominated by Amazon.
Lord & Taylor will continue to operate its own website. In
the future, shoppers ordering from lordandtaylor.com would be able
to pick up and return items at Wal-Mart's 4,700 U.S. retail stores,
the person said. Wal-Mart executives said in recent weeks the
company is working to allow returns from third-party online sellers
at U.S. stores.
The department-store chain will own the inventory and fulfill
orders from the site. "The only difference," said a person familiar
with the plan, "is that it happens to be on walmart.com."
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Sarah
Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
October 19, 2017 07:14 ET (11:14 GMT)
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