business news in context, analysis with attitude

Wal-Mart Stores announced yesterday that it plans to launch a private label line, “Metro 7,” of urban apparel for women, which it says will consist of low-priced yet fashionable denim, velvet and silk schmattes.

(Note: Schmattes is our word, not Wal-Mart’s.)

"This really appeals to a fashion-forward consumer," Wal-Mart CMO John Fleming told Reuters. "Our strategy is to become more relevant to customers who are already in the store across more categories."
KC's View:
This fits into Wal-Mart’s strategy in so many ways. It wants to expand its presence in urban markets. It wants to be seen as an arbiter of fashion tastes, even to the point of considering the acquisition of the Tommy Hilfiger Corp. It wants to emulate the success of its George private label in the UK in the US, even though the George line has not gotten real traction in the US. And it wants to compete with Target more effectively in the “cheap chic” category.

Now, whether these strategies will help or hurt Wal-Mart in the long-term remains to be seen. After all, there always is the risk that by taking a new direction, Wal-Mart could disenfranchise its core consumers.