The Wal-Mart executive who tried to dress up the no-frills discount retailer in skinny jeans and sateen bedsheets has resigned, the company said Friday, after shoppers failed to respond to the trendy new merchandise.
Claire Watts, executive vice president of apparel merchandising, will leave her post next week to pursue “other career interests,” Wal-Mart spokeswoman Sarah Clark said. Watts joined the company in 1997 as divisional merchandise manager of product development and was quickly promoted to the company’s top ranks.
Her departure highlights the troubles that have befallen Wal-Mart’s foray into fashion. The strategy was intended to attract more affluent shoppers and encourage existing customers to buy more than just cheap toilet paper and laundry detergent. But the company moved too quickly, suffering from distribution troubles and poor reception in the nation’s heartland. Sales at stores open at least a year, a key measure of health in retail, have been largely tepid, with apparel and home sales dragging down performance.
Charles Grom, an analyst with J.P. Morgan Securities, estimated that clothing accounts for 10 to 15 percent of Wal-Mart’s total sales. In a research note Friday, he called Watts’ departure and the installation of her replacements “long overdue.”
“We think that the changes … are steps in the right direction,” he wrote.
Watts had been a rising star at Wal-Mart. Under her tenure, the folksy retailer with headquarters in Bentonville, Ark., opened an office in New York to stay abreast of the latest developments in fashion and design. She helped oversee the debut of the chain’s hip Metro 7 clothing line in fall 2005 that was advertised in a glossy spread in Vogue. Watts received the Sam M. Walton Hero Award and the Sam M. Walton Entrepreneur of the Year Award, the highest internal honor given to the company’s senior management. She has been named one of Fortune Magazine’s 50 most influential women in business.
“Claire is a talented merchant,” Clark said. “The company continues to move in the right direction, and much of that credit goes to Claire.”
But Wal-Mart’s gamble on fashion hasn’t paid off as it hoped. Last fall, Chief Executive H. Lee Scott Jr. admitted that it had rolled out its Metro 7 line too quickly. The clothes were in 1,500 Wal-Mart stores across the country. Company officials said it was more suited to just 600 locations, mainly on the coasts.
In January, the retailer announced a reorganization of top management as part of a three-year plan to boost sales and profitability under Wal-Mart Stores U.S. President Eduardo Castro-Wright. The move stripped Watts of her responsibility for home goods.
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