WMT Walmart Inc

By Sarah Nassauer and Suzanne Kapner 

Walmart Inc. and Gap Inc. plan to partner on a line of Gap-branded homegoods that will be sold at Walmart, a sign of how each retailer is stretching into new territory to stay competitive.

Gap Home, which will include items such as bedding and pillows, will go on sale June 24, the companies said. To start, the collection will launch online, but Walmart aims to bring popular items to stores in the future, said a spokeswoman. That could come later this year, according to a person familiar with the situation.

In recent years, Walmart has worked to expand its apparel and homegoods selection to include brands perceived as higher end, part of its efforts to appeal to a wider customer base and boost online sales. The retail behemoth earlier this year named fashion designer Brandon Maxwell as creative director of Free Assembly and Scoop, private-label brands that Walmart says are part of its "elevated fashion brands." This month, Walmart said it would acquire ZeekIt, which allows digital shoppers to see how clothes might look on their bodies or on models with similar bodies.

The Gap Home items will be sold only at Walmart.

Gap, which has been working to revive its namesake brand, doesn't currently sell homegoods and has never sold its branded items inside Walmart.

Gap signed a deal last year with licensing company IMG that will allow it to expand into home décor, furniture, textiles and other categories. The agreement also includes Gap's Banana Republic brand. Gap Home will be developed in partnership with IMG, the companies said Wednesday.

Gap had reported a string of weak sales in recent years and struggled throughout the pandemic as spending gravitated away from apparel. But it has made improvements under new Chief Executive Sonia Syngal and reported positive same-store sales in North America in the fourth quarter for the Gap brand. The company reports quarterly earnings on Thursday.

In the past, Walmart has struggled to create premium apparel brands, reverting back to a focus on basics like socks and sweatshirts. Apparel merchants at Walmart have used a pyramid model to guide their work, with basic clothing making up the base of the pyramid, the bulk of what they aim to sell. But as digital sales become a higher priority at the retailer, executives are experimenting with new models, such as selling higher-end brands only online.

Specialty retailers like Gap once shied away from selling their goods anywhere but their own stores or websites. But with competition intensifying, many brands are increasingly broadening their distribution, sometimes even selling through competitors like Amazon.com Inc.

Write to Sarah Nassauer at sarah.nassauer@wsj.com and Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

May 26, 2021 22:25 ET (02:25 GMT)

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