Walmart is looking to grow in more ways than one.
The big-box chain’s new Free Assembly private-label brand offers dual-gender fashion essentials from an in-house design team, led by Dwight Fenton, whose creative chops helped to build Bonobos, which Walmart acquired in 2017 for $310 million, as well as top-flight brands including J. Crew and Old Navy.
“We wanted all of the pieces in the collection to feel familiar, but also new and appropriate for today,” Fenton wrote in a blog post by Denise Incandela, Walmart’s senior vice president, women’s group, elevated and online brands. Free Assembly, Fenton added, strives to be a brand “that anyone could see themselves wearing,” offering approachable, modern and timeless pieces like denim, sweaters, blazers “that are staples of any wardrobe and can be worn for a long time, season after season.”
Incandela said the project began two years ago, designed from the ground up from brand concept, to fabric selection and fit, to eco-friendly denim washes.
“Free Assembly rounds out our elevated brands portfolio to offer customers incredible market value among modern clothing brands available today,” she said.
The fall collection includes more than 30 items for women and 25 pieces for men, all priced between $9 and $45. A structured boyfriend blazer, with an update silhouettes, is priced at $45, while a viscose tiered maxi dress for women is $39.
“What I’m most proud of though is the $40 organic selvedge denim that retails at an incredibly low price. Customers are going to be wowed by the style, quality and fit of these pieces for the value,” Incandela added.
The selvedge denim is a men’s slim fit jeans available in 10 size options, while the women’s tiered maxi dress comes in XS to 3X.
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The new line is available on walmart.com and in 250 Walmart stores.
Free Assembly expands Walmart’s roster of owned brands. The company also has women’s brand Time and Tru, children’s brand Wonder Nation and women’s plus-size line Terra & Sky. It also has George, originally an Asda brand in the U.K. in the 1990s before Walmart acquired the retailer in 2000. In addition to its Bonobos acquisition, Walmart also acquired plus-size fast-fashion label Eloquii in 2018 for $100 million, and also added the Sofia Vergara and Ellen DeGeneres fashion lines. And last year, making a bigger inroad to grow its fashion business, Walmart also relaunched Scoop, working with Scoop NYC founder Stefani Greenfield, as a private brand in the contemporary market. Scoop features certified vegan leather and faux fur, fully lined outerwear and unique denim washes and trims, including side-taping, metal studs and double needle-top stitching.
In the meantime, President Trump over the weekend said he would likely approve of Oracle’s planned deal for TikTok’s U.S. operations.
TikTok, a Chinese video-sharing social networking platform, is owned by ByteDance. The plan is for ByteDance to retain a majority ownership, with Oracle and Walmart taking the minority 20 percent stake through a partnership called TikTok Global. Oracle would own a 12.5 percent share, while Walmart would purchase a 7.5 percent stake.
“While there is still work to do on final agreements, we have tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global. Our CEO, Doug McMillon, would also serve as one of five board members of the newly created company. In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens,” Walmart said on Saturday, adding that the final transaction will need to be approved by the relevant U.S. government agencies. The deal is also likely to require approval from the Chinese government.
“We believe this deal will benefit the U.S. in many ways, including bringing over 25,000 jobs over time as well as continuing to develop exciting, innovative products for people to enjoy around the world,” Walmart continued. The partnership would provide it with an important way to expand its reach and service omnichannel customers and grow its third-party marketplace and fulfillment businesses, it added.
Trump said TikTok Global would be based in Texas, and contribute $5 billion toward U.S. education.
“Based on press reports, our understanding is that ByteDance Ltd is seeking a valuation of $60 billion, implying Walmart’s investment would be [about] $4.5 billion. Walmart should be able to fund the deal with its cash balance of $16.9 billion at the end of [second quarter 2020], along with incremental cash flow from its solid near-term business trend,” Joseph Feldman, equity analyst at Telsey Advisory Group, said. “With the deal, Oracle would become TikTok’s secure cloud provider and Walmart would bring its omni-channel retail capabilities, including e-commerce, fulfillment, payments, and other omni-channel services.”
Feldman indicated that Walmart’s decision to venture into the digital and social media space to build a powerful and profitable ecosystem beyond retail seems to be the right move. “Walmart’s equity ownership and commercial agreement with TikTok Global should allow the company to leverage the new technology platform to connect with new and younger customers and elevate the brand,” Feldman said.
“Walmart also should be able to monetize TikTok Global users by attracting them to its websites, e-commerce marketplace, fulfillment options, and digital payment tools. This opportunity could be even more valuable, given Walmart’s expansion into fashion products and third-party marketplace items,” Feldman added. “Importantly, we are encouraged to see Walmart actively participate in generating online advertising revenue, a high-margin, fast-growing business currently dominated by Amazon, Facebook, and Google.
“Walmart also may be able to learn from and leverage some of TikTok’s sticky algorithms to enhance its own digital offering,” he noted. “In addition, the potential IPO of TikTok Global should increase the value of Walmart’s equity investment.”