LITTLE ROCK — Wal-Mart Stores Inc. said Wednesday that it will close its New York City apparel office as it refocuses on everyday clothing needs at low prices.
The company opened the office in Manhattan’s fashion district in 2009 as it sought to become a player in trendy clothing.
“What we’ve found since that time is our customers expect from us high-quality basics and fashion basics at great prices every day,” Andy Barron, executive vice president of soft lines for Wal-Mart U.S., said in a memo to all U.S. employees.
The company intends to shift the office’s functions to its Bentonville headquarters by Feb. 1. The New York office employs about 275 people.
“We would hope as many as possible would make the move,” said David Tovar, a Wal-Mart spokesman.
Lisa Rhodes, senior vice president for U.S. apparel merchandising, remains in charge of the apparel operation as the transition is made.
“The strategy that Lisa and her team has put in place is working,” Tovar said. “We don’t believe we need an office in New York City to execute that strategy.”
Wal-Mart’s announcement was welcome news to those who work to promote Northwest Arkansas economic development and growth.
“It’s the signal that it sends to how committed Wal-Mart is to Northwest Arkansas that really makes this of use in the economic development area,”said Ed Clifford, president and chief executive officer of the Bentonville-Bella Vista Chamber of Commerce. “It closes the door for now on moving other divisions out.”
Raymond Burns, president and chief executive of the Rogers-Lowell Chamber of Commerce, said Wal-Mart’s decision is likely to draw back some suppliers who left the region when Wal-Mart moved its apparel office to New York in 2009.
“That will help drive the economy,” he said.
Carol Spieckerman, president and chief executive of retail consulting firm Newmarket builders in Bentonville, said the move does not signal that Wal-Mart has given up on fashion.
“I think they have an opportunity to fix apparel, and I think that by bringing it close in, they’ll be able to watch it very closely,” she said. “They don’t have to be in New York to be in the fashion business.”
And some retailers, she said, have developed strong business models around fashion basics.
Wal-Mart has signaled, however, that the focus will be on basics. Speaking to retail analysts during the company’s recent investor conference, Duncan Mac Naughton, chief merchandising officer, said the company is “very focused, very focused, on winning and basics, on socks, underwear, jeans and basic tops. It’s who we are, that’s what we stand for.”
Camille Schuster, marketing professor at California State University at San Marcos, said Wal-Mart’s presence on the New York fashion scene was “an experiment they don’t need.” The company, she said, is very good at tracking inventory but not so good at rapidly changing inventory as needed in the fashion world.
“That takes a very different supply chain than they have,” said Schuster, who also runs retail consulting firm Global Collaborations Inc.
Rival Target Corp. pulled off a win with customers through its collaboration with Italian design firm Missoni, she said.
“Wal-Mart doesn’t have a reputation for being fashion oriented. Going back to what they really do well makes sense for them. That’s what Sam started with, selling basic items for ordinary people,” Schuster said, referring to company founder Sam Walton.
Wal-Mart’s decision likely will have at least a small positive effect on the region’s housing market, said Paul Bynum, who runs real-estate tracking firm Mount Data.
It’s not likely that 275 new positions would hit the market all at once, he said, “but still it’s significant because it brings a lot of attention to Northwest Arkansas.”
The region still has a plentiful supply of homes, including high-end properties, he said.
“It couldn’t do anything but help our economy,” he said. “I can see it being a nice thing for Northwest Arkansas.”
Wal-Mart said Mary Fox, senior vice president for global apparel sourcing, will be project leader during the transition in charge of the fall buying cycles.
In other personnel moves:
Jeff Evans is being promoted from vice president to senior vice president and divisional merchandise manager for men’s, kids’ and babies’ shoes. He currently is vice president and divisional merchandise manager for menswear.
Marybeth Cornwell is the new senior vice president and general merchandise manager for ladies’ wear, intimates, jewelry and accessories. She previously was in charge of home and apparel for Sam’s Club.
Jeff Dunn is the new vice president, divisional marketing manager for shoes. He has held several merchandising positions for Sam’s Club and Wal-Mart International.
Tom Dougherty moves to vice president, divisional marketing manager for menswear, from vice president of the store visual/merchandising execution team for general merchandise and soft lines.
Patricia Snyder moves to vice president, divisional marketing manager for children’s apparel, from vice president-replenishment, home and apparel.
Deanah Baker was named vice president, divisional marketing manager for women’s apparel, after serving in several merchandising roles.
Dave Adams is now vice president, divisional marketing manager or intimate wear, after serving as senior director of apparel planning.
Ginny Rothschild moves to senior category director, jewelry and accessories. She previously was a director in men’s apparel.
Business, Pages 26 on 10/27/2011