Kroger, one of the nation’s largest supermarket chains, took a huge plunge on Friday and announced that it would launch a new apparel brand in Fall 2018. Kroger will roll out the lifestyle apparel brand in over 300 Fred Meyer and Kroger Marketplace stores across the country.
“This new brand gives Kroger a chance to inspire and connect with our customers, offering effortless style every day – from elevated basics to fashionable highlights,” said Robert Clark, Kroger’s senior vice president of merchandising. “This new offering is on-trend, convenient, and right in line with our customers’ needs.”
“This launch of ‘Our Brands’ fashion will re-invigorate Kroger’s apparel line. We will be able to serve our customers across the country the inspiration they are looking for, which translates into an immense opportunity for growth in sales, share, and loyalty,” Mr. Clark added.
Kroger has been badly bruised this year as Amazon continues to expand its marketshare and Wall Street fears that Amazon will very soon start eating into its future. Shares of the Cincinnati-based retailer hit an all time high of $42.75 in December 2015, but slipped nearly 50% from that peak to reach its current price of around $21.50, which wiped out nearly $20 billion in value.
Kroger has been extremely busy in the past few months, adjusting its priories and taking new steps to bolster its position as well as revenue. The retail chain slashed prices, improved its delivery capabilities, increased its technology investments, decided to prioritize local sourcing and expanded its niche, natural and organic goods selection, and now the company wants to start a new clothing line.
Kroger seems to have been more than a little inspired by Walmart doubling down on building a group of niche brands that can stand on their own feet, but at the same time exploit the scale, size and technology of the parent company. Walmart made a string of acquisitions this year, which includes Bonobos (Mens Clothing), ModCloth (Women’s Clothing), Moosejaw (Outdoor Apparel and Gear), Shoebuy (Footwear) and Hayneedle (Home Furnishing).
Walmart did not buy those brands and fold them into its main brand; instead, they let the brands operate as they did before, but with the difference of being able to leverage Walmart’s vast resources to grow faster. Walmart wants to build a portfolio of niche business units that will retain their exclusivity and grow on their own.
Kroger still hasn’t gone that deep or wide; their decision to build a brand from scratch and a launch date nearly a year away shows that they are still moving slow. But it does expose the fact that Kroger thinks there is a need to differentiate itself from what is available in the market, and that it needs unique products or exclusive brands to do that.
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