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Collaboration Trumps Competition in Retail’s New Pandemic Trend

Gap and Walmart? What about Walmart and GNC?

One-time competitors are finding ways to collaborate in the name of grabbing market share.

Gap’s Walmart deal newly extends its reach into home goods, with 400 décor, bedding and bath items following Target’s home launch with Levi’s.

GNC inked an exclusive agreement to sell a curated assortment of private-label products through Walmart’s more than 4,000 stores and on its website. “The future of the wellness industry has a place for everyone, and GNC is making a healthy lifestyle more accessible than ever by delivering quality products to consumers via Walmart’s expansive network of stores,” said Josh Burris, CEO of the health-minded retailer, which will sell vitamins, sports nutrition and weight management products at Walmart’s U.S. stores.

GNC, which closed 1,200 of its 5,200 stores in the wake of a June bankruptcy filing, before Chinese investor Harbin Pharmaceutical Group acquired it for $770 million, now has the chance to court Walmart’s customer base.

But Walmart isn’t the only company playing on the collaboration merry-go-round.

Mytheresa inked its own deal with Vestiaire Collective, inviting top well-heeled clients to participate in the luxury resale program. Items sold by Mytheresa clients, compensated in the form of store credit on the luxury platform, will be available worldwide on Vestiaire Collective’s premium resale site, which is responsible for checking quality and authenticating merchandise. Customers in Europe will initially be able to purchase from 20 luxury designer brands, though the companies plan to expand to more customers, brands and categories like ready-to-wear by the end of the year.

The partnership brings Mytheresa into the circular fashion arena.

“We are confident that with this unique service we are providing a real benefit to our customers giving their beautiful designer pieces a second life,” said Michael Kliger, Mytheresa CEO. “It further allows us to help drive change in the fashion industry by incorporating circularity into our business model. We see a huge potential for the program and can’t wait to extend it to more customers, categories and markets in the next months.”

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Vestiaire cofounding president Fanny Moizant said the firm will “keep amplifying the voice of resale as a crucial part of achieving a more sustainable fashion system. And we’ll continue partnering and fighting side-by-side with brands and retailers, encouraging their customers to embrace circular fashion by reselling pieces they no longer wear.”

Chief investment officer Dana Telsey of Telsey Advisory Group said she’s noticed that formerly “fierce corporate competitors” are now partnering on common ground.

“The pandemic has changed how these companies operate and opened the door to new ways of leveraging their brand that we have never seen before,” Telsey said. “There will be more unexpected alliances as the creative search for enhancements to gain greater sales dollars from existing customer and attract new ones is underway.”

Of course, celebrity or influencer tie-ups, such as world-leading gymnast Simone Biles working with Athleta or TikTok stars Charlie and Dixie D’Amelio launching Social Tourist with Hollister, represent retail’s more traditional personality-led partnerships.

But the newer combinations include Target teaming up with Ulta and Kohl’s joining forces with Sephora. Both allow the beauty brands to attract a wider customer base without the need to open their own doors. As both retailers have expressed an interest in building up their beauty and wellness offerings, these deals allow them to quickly build depth in those categories.

Kohl’s groundbreaking Amazon partnership gave the online behemoth’s customers streamlined in-store returns while enabling the department store chain to attract additional traffic. In April 2019, the duo elected to expand the program from 82 locations to all 1,150-plus Kohl’s doors across 48 states, signaling the partnership’s success.

“I think we will see many more of these partnerships because the expertise of the individual partner is much greater than what stores have in-house,” said Walter Loeb, a former retail executive and analyst-turned-consultant.

Though Ulta and Sephora’s strong brand names should perform well for their retail partners, Loeb issued a note of caution for retailers considering a trip down collaboration lane. It’s entirely possible for stores to lose control over how their brand partners display their merchandise, he said, citing an instance in which an upscale retailer and fashion brand partner sent mixed signals to customers—each touting a different palette as the new season’s go-to colors.

Loeb said he expects to see more partnerships and popups as retailers find creative ways to utilize floor space. He also expects that the idea of bringing in a renter, such as how Sears used to carve out rental space at some locations, will be limited to retailers on the brink because they’re desperate for income to offset overhead expenses.