Business

Winnipeg Free Press - PRINT EDITION

Giants battle over discount duds

Walmart vs. Loblaw in back-to-school clothes

By: Hollie Shaw

Posted: 08/31/2010 1:00 AM | Comments: 0 (including replies)

TORONTO -- It will be George vs. Joe in the back-to-school apparel aisles this fall as mass merchant Walmart Canada Corp. aims its guns at rival Loblaw Cos.

The George brand, a successful line that originated at Walmart subsidiary Asda in Britain in 1990, is the fourth-largest apparel brand in the U.K. Named after its former head designer, George Davies, it launched in the United States in 2002 and in Canada in 2005.

The brand has become so popular in Canada, Walmart announced Monday it has decided to scrap all of its other private labels in this country, including Penmans, 725 Originals and B.U.M. Equipment, in favour of a more focused apparel strategy that will pit George squarely against Loblaw's Joe Fresh line.

Style magnate Joe Mimran, founder of Club Monaco, launched the in-house clothing line at Loblaw in early 2006 and it has become one of the country's top apparel brands with a target of $1 billion in sales by the end of this year. It is the top-selling children's brand in Canada and has proven to be the brightest spot in Loblaw's assortment of non-food merchandise.

George, now sold in Walmart's 319 stores across the country, has not fared badly either, according to Lesya McQueen, senior vice-president of apparel at Walmart Canada.

"We have seen steady growth (since the launch in 2005)," McQueen said. "It is the brand with the most potential and last year it was our No. 1 private label brand."

Walmart Canada is the second-biggest seller of apparel in Canada behind Sears Canada, according to market research by the NPD Group, with a nine per cent share of the overall market. But internal customer research bolstered the company's decision to veer from the U.S. and convert to a single-brand strategy, McQueen said. (The U.S. unit will continue to sell its other house brands in addition to George.)

In Canada, consumers expressed a declining intent to purchase the retailer's older private label lines and wanted to see more George-branded apparel in the stores, she said. Consumers believed the chain sold a lot of basics, but not many trendy pieces.

The marketing insight Walmart provided to ad agency JWT of Toronto was to follow the principle that the clothes were so stylish it would be hard for consumers to believe they came from the mass merchant.

"We were competitive on price but we lagged the competition in other areas," McQueen admitted. "People thought our offer on the floor was a bit confusing and overwhelming with the all the private-label house brands.

-- Postmedia News

Republished from the Winnipeg Free Press print edition August 31, 2010 B3

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