Mass Market: The Big 3

Wal-Mart, Kmart and Target take three different approaches to casual sportswear.


Wal-Mart, Kmart and Target -- which account for 63 percent of all the mass retail volume generated in the U.S. -- take three different approaches to casual sportswear. Wal-Mart focuses on the basics, while Target takes on the trends. Kmart is making a run for the fashion customer, and despite a recent setback, is aggressively going after branded merchandise. Here, a look at each.


NEW YORK -- Wal-Mart, the world's largest retailer, with 1993 sales of $67.3 billion, seems unstoppable in its growth, financially and territorially.

In casual sportswear, however, Wal-Mart is a sleeping giant. Unlike its rivals Kmart and Target, it has no interest in chasing fashion.

Wal-Mart's strength is its hard goods and consumables. Because of the volume it commands, it can undercut just about any other retailer on prices of basic products. Its focus for future growth is in groceries, using a supercenter format.

At the Wal-Mart stores, soft goods made up 27 percent of overall sales, or roughly $12 billion last year. That's a lot of T-shirts, jeans and basics, particularly at prices that are generally under $20.
In soft lines, the company has a low-buck, low-fashion approach.

While the apparel area is generally neat, display is nothing special. At a unit in Brick, N.J., for example, large turquoise banners with department names such as "Casualwear," "Trends," "Intimates" and "Plus Sizes" hung over the women's apparel area. About a third of the sportswear at this unit was large sizes. Some of the usual mass market brands are in stock, including Sasson, Gitano, Jordache, Bonjour and Hanes Her Way.

Its casual offerings, including jeans, T-shirts, sweatshirts, knit and woven tops, swimsuits and jogging suits, far outweigh career or dressy-oriented separates, which consist of a few unlined blazers and skirts, and shells or button-down printed blouses in polyester and rayon blends.

Beyond the trademark greeter at the front door, sales associates in the departments are friendly -- if not that easy to find. There were no sales associates offering help in the apparel department on a recent Sunday visit.

"Wal-Mart feels its apparel assortments are fine for its customers," said retail consultant Kurt Barnard. "If it wanted to go after more apparel share, it would. But it has decided, for now, that it does not want to make a fashion statement. Instead, it has decided to focus on groceries."

One of the proprietary apparel labels found at Wal-Mart is Bobbie Brooks, a name the firm bought and now distributes exclusively through its stores. Some of its other private brands include Huntington Ridge and Style My Way and Simply Basic.

For a year or so, the giant Bentonville, Ark., discounter has been forging into new regions -- it's already in the Northeast and Mexico, and in 1995 will open in Brazil and Argentina -- gobbling up other chains -- 122 Woolco stores in Canada, 103 of Kmart's Pace warehouse clubs -- and keeping its cost of operations among the lowest in the industry.

It is able to accomplish this by continually slashing unnecessary functions, and using state-of-the-art systems for operations, inventory control and information management. This is critical to keeping a lid on costs and making the organization more efficient.

In 1994, Wal-Mart is expected to add another $17 billion in sales, bringing it to $84 billion. The company is on a pace to break the $100 billion mark by the end of 1995. It is remarkable growth, considering that just 10 years ago, the firm rang up $4.6 billion in sales.

The company, which has its roots in a single Ben Franklin store opened in 1945 by Sam Walton, now operates more than 2,000 stores under the banners Wal-Mart, Wal-Mart Supercenters, Sam's Club, Hypermarket USA and Bud's Warehouse Outlets.

Sam's Clubs is a warehouse operation that hit $14.7 billion last year. Wal-Mart Supercenters, which sell general merchandise and groceries and is slated for significant growth, had sales of $3 billion.


Its other businesses include the McLane food distribution company; Western Merchandisers, a wholesale distributor of music, videos and books, and Phillips Cos., a grocery chain in Arkansas. Through a joint venture with Cifra S.A., it operates 13 stores in Mexico.

The company also operates four Hypermarket USA units, which rang up about $600 million last year. The company has said it does not plan to enlarge its Hypermarket USA division.

"Wal-Mart is the most customer-driven retailer in America," said Barnard. "It also has the legacy of Sam Walton, who never passed up the opportunity to update systems. The company has a clear sense of who its customers are and what they want."

Wal-Mart's core business is its discount stores. They tallied $45.5 billion in 1993.

Wal-Mart's advertising, like its approach to most aspects of its business, is simple and gets the message that has made it a legend to the consumer. Its slogan -- "Always the low price. Always." -- is repeated in its electronic and print ads, and is splattered on signs around the stores.

Finally, from the "Hindsight Is 20/20 Department," when Wal-Mart went public in 1970, 100 shares cost $1,650. As of Jan. 31, 1994, that investment would have been worth $2,713,600.

Page:  Next »
load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false