Wal-Mart’s New Style: Out With Kathie Lee, In With Trendier Looks

Wal-Mart is bidding adieu to its Kathie Lee label, marking the end of an era and the start of a new apparel department. Here are the details.

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BENTONVILLE, Ark. — Bye-bye Kathie Lee. Hello, new era.

Wal-Mart Stores Inc. is bidding adieu to the misses sportswear label Kathie Lee — once a $700 million business for the world’s largest company. Ex-talk show hostess Kathie Lee Gifford’s licensed collection — now at the end of a three-year licensing extension — will finish shipping by holiday, ending an eight-year run as turbulent as it was productive.

The label sold well — an estimated $300 million in its first 12 months — and allowed Wal-Mart to effectively compete with Kmart’s then-star brand, Jaclyn Smith. Then came sweatshop allegations, Gifford’s televised histrionics and the retailer’s worst public relations crisis to date.

Ironically, it’s been Gifford’s recent quieter years, including her disappearance from network television, that’s likely to have caused the decision not to renew. But it also signals Wal-Mart’s drive to create a whole new image in apparel.

Celia Clancy, Wal-Mart’s senior vice president and general merchandise manager for ladies’ apparel, who is spearheading many of the immediate and long-term changes set for the business, noted in an exclusive interview with WWD that, "Kathie Lee did a great job for us for years. She really did. Along the way, we improved. Now it’s a different era."

Kellwood, which holds the Kathie Lee license, will not lack for Wal-Mart business. The St. Louis-based manufacturer produces Faded Glory, White Stag and George for Wal-Mart. All three brands are doing well and have potential to grow. George will add casual items, a departure from its careerwear profile in Wal-Mart’s U.K.-based chain, ASDA, which launched the line.

The company also has acquired a single-category brand, which was announced internally last week. Clancy declined to go public, but did note: "Spring ’04 is going to be a big season for us. We have some things up our sleeve."

In fact, Wal-Mart has been quietly winding down Kathie Lee for some time, removing pictures of Gifford from store signs and hanging other goods on racks bearing her name.

In Supercenters ringing company headquarters here, White Stag linen separates hung from Kathie Lee racks — adding credibility to industry speculation that White Stag will step into Kathie Lee’s niche.
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