Walmart wants to make a name for itself in fashion. It has tapped Brandon Maxwell, a designer who dresses celebrities from Lady Gaga to Michelle Obama, to raise its reputation.
Maxwell will oversee the discounter's elevated brands, Scoop and Free Assembly, as creative director. The 36-year-old designer lives in New York City. He has been a judge on Bravo's "Project Runway" and designs a luxury label sold by retailers like Neiman Marcus with items that cost hundreds or thousands of dollars apiece.
By working with Walmart, however, Maxwell said he can fit more budgets and reach more shoppers — including friends and family in his hometown of Longview, Texas. His first full collections will be available in spring 2022.
"I'm not a person who believes that fashion is just something on the surface. I believe it is a way to say to the world 'This is who I am' and that has power to it," he told CNBC. "Being able to bring that to so many different people, and communities like mine, that I grew up in, to me always felt like the goal."
Over the past several years, Walmart has expanded beyond clothing basics. The retailer has acquired established apparel brands, such as menswear retailer Bonobos, and launched its own. It added nearly 1,000 national names to its website, including Champion, Levi Strauss and Free People. And it struck a deal with ThredUp, a seller of secondhand apparel, shoes and accessories, to offer higher-end brands on a budget.
The retailer has launched four exclusive, elevated brands: Sofía Jeans, developed with actress Sofia Vergara; Eloquii Elements, a plus-sized women's line inspired by acquired brand Eloquii; Free Assembly, a men's and women's private label for everyday fashion; and Scoop, a trend-oriented brand that Walmart revived.
Yet the world's largest retailer by revenue is better known for low prices than high fashion. Its national footprint of more than 4,700 stores are largely concentrated in suburban areas and small towns rather than fashion hubs like New York City and Los Angeles. Much of its fashion-forward clothing can only be found online.
Denise Incandela, executive vice president of apparel and private brands for Walmart, said that is changing. After testing and selling private labels online, she said shoppers will see them at more brick-and-mortar locations. This spring, Sofia Jeans will be in 1,000 stores. Free Assembly will be in 500 stores, Scoop will be in 250 stores and Elloquii Elements will be 100 stores.
She said the retailer plans to sell more national brands at stores and make clothing displays more appealing with mannequins and creative imagery. It will also add a children's line to Free Assembly and Scoop.
Walmart has 13 general merchandise private brands that have generated $1 billion or more in annual sales. Three of its private apparel lines are $2 billion brands. The company declined to name the brands.
Stacey Widlitz, a retail consultant and founder of SW Retail Advisors, said Walmart must prove to younger, style-conscious shoppers that its stores and website are a place to stock the closet, not just the fridge.
"The challenge for them is to really be able to shape in the consumer's mind that they are becoming a fashion destination," she said. "It's not an overnight fix. It [Walmart] is food. It's various basics. Walmart is not synonymous with fashion at this point."
She said it trails behind Target, its smaller, big-box rival that established itself as a cheap chic retailer with sleek, remodeled stores and popular private labels.
But she pointed to Walmart's Free Assembly line, which launched last fall, as a sign of progress. She said Walmart needs to pick up the pace with private brands.
Walmart's e-commerce sales in the U.S. grew 79% in the most recent fiscal year, as more shoppers shipped purchases to their homes or picked up online orders in the parking lot during the pandemic. Its same-store sales grew by 8.6% compared with the prior fiscal year. The company did not break out how much of that sales growth came from general merchandise, such as apparel.
As some shopping mall staples like Macy's and J.C. Penney have lost their footing, Walmart and other off-mall stores have an opportunity to gain credibility and market share across general merchandise categories like beauty and apparel.
Incandela said Walmart wants to be a convenient spot where consumers can find a wider range for their wardrobe, from T-shirts to eye-catching outfits. She said the retailer will continue to experiment with ways to make an impression, from showcasing apparel differently on its website to getting in front of customers on TikTok.
"We're in the beginning of that journey," she said. "We have a lot of work to do."
Disclosure: NBCUniversal is the parent company of Bravo and CNBC.
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