Walmart

In addition to being the world’s largest retailer, Walmart Inc. is also something of a lightning rod for issues that strike at the heart of society and big business. 
That comes to the fore each year when the company files its proxy statement with the Securities and Exchange Commission, teeing up the shareholder votes that will take place this year at its May 31 annual meeting. 

As usual, shareholders weighed in with a number of proposals — eight this time — pushing Walmart to look closer at issues from worker pay to diversity to gun violence and more. 

Related Galleries

Walmart opposed all the shareholder proposals, which tend to only pass when backed by the company. While the retailer argues in many cases that it is already addressing the issues in one way or another, some shareholders clearly want more action.

The proposals usually come in corporate-speak and underscore the value a new report or audit would have to shareholders, but the shareholder asks target topics that are broader in scope than just retail or profits. 

It’s an annual exercise that shows some of retail’s pressure points and offers a view on how Walmart, which logged revenues of $611 billion last year, is handling the issues.  Here, a look at where the shareholders will be shining the spotlight at Walmart’s annual meeting.

Worker and CEO Pay

The Franciscan Sisters of Perpetual Adoration has asked the company to “take into consideration the pay grades and/or salary ranges of all classifications of Walmart employees when setting target amounts for chief executive officer compensation.”

The proposal cites a JUST Capital survey finding that 87 percent of people agree the CEO-worker pay gap is a problem and notes that Walmart’s median associate pay was $25,335 last year. 

Walmart argued that its current practices “already align with the outcomes the proposal seeks to achieve” and that its frontline hourly associates have seen their pay rise faster than their CEO’s since 2015.

However, Walmart, which has a small host of CEOs to run the business and its various divisions, has long given its leaders multimillion-dollar paydays.

On top of the corporate org chart is Doug McMillon, president and CEO of the overall corporation, who last year saw his compensation slip 1.4 percent to $25.3 million. 

Doug McMillon, president and chief executive officer of Walmart.

Courtesy Photo

The lion’s share of that pay —  $19.4 million — represents what’s called the “fair value” of stock awards as of their grant date, although the value that McMillon actually receives will depend on how Walmart’s shares perform on Wall Street. The idea is to link the CEO’s pay to the portfolios of shareholders and is relatively standard at big-time retailers. 

McMillon also received a $1.5 million salary and $3 million in incentive pay.

At the divisional level, and including big stock payouts: 

John Furner, president and CEO of Walmart U.S., received $14.1 million in pay.

Judith McKenna, president and CEO of Walmart International, saw compensation of $13.9 million. 

Kathryn McLay, president and CEO of Sam’s Club, received $11.9 million. 

Topping them all was John David Rainey, the company’s new chief financial officer, who received a $39.7 million pay package, including $32.7 million in stock awards and a $5 million bonus. 

Human Rights

Oxfam America Inc. asked that Walmart prepare a report on its human rights due diligence process “to identify, assess, prevent and mitigate actual and potential adverse human rights impacts in its domestic and foreign operations and supply chains.”

Walmart said the company has already described its process, which “reflects the core elements” recognized by the United Nations’ Guiding Principles on Business and Human Rights.

Racial Equity

The organization United for Respect requested that the retailer “conduct a third-party, independent racial equity audit” looking at “adverse impacts on Black, Indigenous and People of Color communities.” 

Walmart said it is “focused on supporting a workplace culture where every associate feels they belong. We have closely examined our business practices, consulted and continue to consult with internal and external stakeholders, and are transparent in our reporting. We believe our current approach — which will continue to evolve as our business evolves and expectations evolve — is right for us and that the requested equity audit is not necessary at this time.”

Reproductive Rights and Data Privacy

Shareholder Julie Kalish with the help of Clean Yield Asset Management asked Walmart to prepare a public report “detailing known and potential risks and costs to the company of fulfilling information requests relating to Walmart customers for the enforcement of state laws criminalizing abortion access.”

The proposal noted that while Walmart does not report on enforcement requests, tech giants Alphabet and Meta together received about 110,000 requests in the second half of 2021 and complied with around 80 percent of those requests. 

“Walmart has sensitive personal data on consumers’ health, geolocation, internet activity, and purchases,” the proposal said. “This data could be accessed without consumer consent by states that criminalize abortion.”

Walmart countered that it has procedures that “help ensure customer data is handled lawfully and transparently.” 

China

The National Legal and Policy Center asked for a report on “the nature and extent to which corporate operations depend on, and are vulnerable to, Communist China, which is a serial human rights violator, a geopolitical threat, and an adversary to the United States.”

Walmart noted that it already “reports on material risks facing the company.” 

Workplace Safety & Violence

Shareholder Cynthia Murray proposed that Walmart “conduct a third-party, independent review of the impact of company policies and practices on workplace safety and violence, including gun violence.”

The proposal noted that, “between July 1, 2020 and November 22, 2022, there were at least 363 gun incidents and 112 gun deaths at Walmart…. Gun violence is an unprecedented public health crisis with substantial human and financial costs… Failure to effectively address workplace safety and violence exposes stakeholders, including employees, to unacceptable harms and exposes Walmart to financial, reputational, and legal risks.”

Walmart underscored its commitment to “health, safety, and security” and said the proposed report “would not aid Walmart in upholding this commitment.”

Walmart is proving that even the nation’s largest retailer may not be immune to the economic pressures that are causing consumers to reevaluate their spending habits. 

Rising food prices meant more shoppers flocked to Walmart in the most recent quarter in search of grocery deals.
Courtesy Photo

The Bentonville, Ark.-based firm revealed quarterly earnings Tuesday before the market opened, improving on top-line revenues, but failing to meet Wall Street’s expectations after falling short on bottom-line profits. Company shares fell nearly 9 percent at the start of Tuesday’s trading session. 
“Bottom-line results were unexpected and reflected the unusual environment,” Doug McMillon, president and chief executive officer of Walmart, said in a statement. “U.S. inflation levels, particularly in food and fuel, created more pressure on the margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”  

Related Galleries

For the most recent quarter, or the three-month period ending April 30, total revenues grew 2.4 percent to about $141 billion, up from more than $138 billion a year ago. Comp sales at Sam’s Club grew 10.2 percent, and 17.4 percent on a two-year stack. Membership income rose 10.5 percent. 
Walmart U.S. e-commerce sales increased 1 percent, or 38 percent on a two-year stack. Last August, McMillon said the company’s global e-commerce business was on track to reach $75 billion in revenues by the end of the year. The company still hasn’t said whether it has reached that goal yet.
Meanwhile, ​​net sales at Walmart International fell $3.5 billion during the most recent quarter, or 13 percent to $23.8 billion, negatively impacted by $5 billion, due to divestitures. The retailer logged $2.05 billion, down from $2.73 billion during last year’s first quarter, as a result. 
The results are a mixed bag. Walmart’s affordably priced food selection means consumers are increasingly flocking to the mass channel for their grocery needs. But McMillon added on Tuesday morning’s conference call with analysts that inflation is also lifting the average ticket price. Shoppers are responding by purchasing fewer discretionary items, resulting in smaller overall basket sizes. 
“As expected, consumers are increasingly drawn to the lower price points that Walmart can offer for groceries and Walmart is taking market share in food, but higher food sales is also putting pressure on gross margin,” Moody’s retail analyst Mickey Chadha wrote in a note. He added that the higher inventory levels “could lead to increased promotional cadence in the coming quarters if consumers continue to pull back, which could increase pressure on earnings. It is increasingly difficult to pass on higher prices to consumers while dealing with higher wages and employee costs.”
In terms of food costs, McMillon said there’s been double-digit inflation. “And I’m concerned that inflation may continue to increase. As it relates to Walmart U.S. general merchandise sales, we knew that we were up against stimulus dollars from last year, but the rate of inflation in food pulled more dollars away from [general merchandise] than we expected as customers needed to pay for the inflation in food,” he said.

Aside from rising consumer food and gasoline prices, executives on the call told analysts that additional headwinds came from higher-than-expected inventory levels (up 32 percent for the quarter, year-over-year), added fuel costs in the supply chain and increased labor expenses. 
“As the Omicron variant case count declined rapidly in the first half of the quarter, more of our associates [who] were out on COVID-19 leave came back to work faster than we expected,” McMillon said. “We hired more associates at the end of last year to cover for those on leave. So we ended up with weeks of overstaffing. That issue was resolved during the quarter, primarily through attrition.”
In addition, U.S. fuel cost the retailer more than $160 million more during the quarter than originally expected.

Doug McMillon, president and chief executive officer of Walmart
Courtesy Photo

Still, McMillon expressed optimism for the future. 
“Across our businesses, we had a strong top-line quarter,” he said. “There were some things that happened during the quarter that were different than we expected and we’re trying to be very transparent about those things. There seems to be more uncertainty now in a very fluid environment. And so, we’ll just deal with that.”
One way will be by slashing prices in high-margin areas, such as apparel, in an effort to manage excess inventory. While this might seem counterintuitive, McMillon said shoppers on a budget are more likely to notice. 
“Part of what’s at play here is [that] you’ve got food inflation moving up, but we’ve got general merchandise categories, like apparel and some of our hardlines categories, to play with,” he said. “And the beauty of it is [that] customers are even more price sensitive right now. They’re attention to fuel prices and high-food prices is high. And so when you bring [a price of] something down in sporting goods or hardware, one of these other categories, they notice even more than they would notice before and that makes the elasticity impact be different than it would be otherwise, which blends the mix up.” 
In addition, some tailwinds for the quarter included things like game consoles, as well as patio furniture, grills and gardening supplies, thanks to warming temperatures.

“In terms of the consumer themselves, we’ve seen strong growth with higher-income consumers, middle-income and lower-income, but we do see a definite strength with high-ticket items,” John Furner, president and CEO of Walmart U.S., said on the call. “With some consumers and others, we do see some switching, which would include switching specifically from brands to private brands. And where we see the switching from brands to private brands, we’ll continue to watch that for a group of customers, but we’ve got to all work harder to keep prices low for the American consumer.”
McMillon added: “It’s important to recognize that there’s more than one consumer. We serve the whole country. [With] the U.S. in particular, we’ve got a breadth of customers and they behave differently. [With] some customers, we are seeing some indications of change throughout the quarter, but that’s not true for all of them.”

Pieces from Walmart’s Love & Sports brand.
Courtesy Photo

Walmart has worked hard over the last few years to expand its assortment of merchandise, particularly in fashion. The big-box retailer now sells more than 1,000 third-party apparel, accessories, and beauty and wellness brands — such as Levi’s, Reebok, Free People, Jordache, Eloquii, Space NK and Kris Jenner’s home cleaning brand Safely — and continues to add to the scale and breadth of its portfolio of brands each quarter. Earlier this month, the firm expanded its distribution of period-panty brand Proof to approximately 4,000 Walmart stores.
In addition, Walmart has an extensive list of its own apparel brands, three of which are worth more than $2 billion, although the company declined to say which ones. The list includes sustainable innerwear and maternity brand Kindly, swimwear and activewear brand Love & Sports, and apparel brands Free Assembly and Scoop, of which luxury designer Brandon Maxwell serves as creative director.
“Maintaining price competitiveness is the key risk for Walmart in today’s inflationary environment,” Landon Luxembourg, senior analyst at research firm Third Bridge, wrote in a note. “As consumer wallets come under pressure, private brands will likely take the stage as consumers trade down from a pure decision of opting for lower-cost items. Walmart’s private brand portfolio, which was a focus area over the last four to five years, has now doubled its assortment. However, it has not grown consumer mind share and lack recognizability versus Target and Costco’s competing private assortment, which may be more sought after by consumers.”

Walmart anticipates current quarter revenues will increase more than 5 percent, excluding divestitures. U.S. comp sales are also expected to grow — between 4 percent and 5 percent — excluding fuel, while earnings per share are expected to be flat to up slightly, excluding divestitures.  
For the full year, the company expects net revenues will rise about 4 percent, excluding divestitures. Walmart U.S. comp sales are expected to increase roughly 3.5 percent, excluding fuel, while earnings per share for the year will decrease about 1 percent, excluding divestitures.
The company ended the quarter with $11.8 million in cash and cash equivalents and more than $32 million in long-term debt. 
Shares of Walmart, which closed up 0.11 percent Monday to $148.21, are up 6.7 percent, year-over-year.
“We don’t expect this miss to become a norm, seeing that Walmart has historically outperformed competition during tough economic times,” Arun Sundaram, senior equity analyst at CFRA Research, wrote in a note. His firm maintained its “buy” position on Walmart’s stock, but cut the 12-year price target by $3 to $162 a share. “The good news is most of these issues seem to be isolated to the quarter and margins should improve in the second quarter and the back half of the year as Walmart works through excess inventory and better matches pricing with costs.”

Like last year, Black Friday 2021 is looking different.
Several major retailers are again starting the Black Friday shopping event early, with many sales periods starting at the beginning of November. This move is largely due to the ongoing pandemic, with retailers responding to supply chain blockages and product shortages, and offering customers more time to do their holiday shopping. Many retailers are also continuing last year’s practice of closing its stores on Thanksgiving as a way to thank its associates and reduce the spread of COVID-19. 
Retailers like Best Buy, Walmart, Macy’s and others have already revealed their Black Friday shopping events, with others slated to make their announcements in the next few weeks.

Here, WWD rounds up how several major retailers are doing Black Friday 2021. Read on for more.

Related Galleries

This article will be updated as retailers announce their Black Friday initiatives. 
Amazon  
Amazon is continuing its tradition of offering a longer holiday sales period that started at the beginning of October. The deals are available on Amazon’s “Epic Deals” page and spans across virtually all its categories, including fashion, beauty, home, electronics and more.
Throughout October and November, Amazon will drop deeper deals on select merchandise. It is currently amid its Holiday Beauty Haul savings event, its first beauty-specific shopping event, where the company is offering up to 40 percent off on products across skin care, hair care, color cosmetics and fragrance.
Best Buy 
Best Buy Inc. is starting off the holiday shopping season early, offering Black Friday deals starting on Nov. 19, a week earlier than the actual Black Friday.
The retailer is offering deals on many of its electronics, including savings on smart TVs from Samsung, LG and Sony and on Apple products like the new iPhone 13 and iPad.
JCPenney
JCPenney will also start offering Black Friday deals on Nov. 1 through the rest of the month across fashion, home, beauty and more categories. The retailer is also offering its Joy Sweepstakes during the holiday shopping period where customers can win prizes when they shop. Prizes include gift cards, home electronics and a trip to Los Angeles.
Kohl’s 
Kohl’s is offering holiday savings throughout November, with six days of Black Friday deals starting on Nov. 21. The retailer is also offering a sales initiative where it awards $15 Kohl’s Cash for every $50 customers spend during the Black Friday week.
Some of the retailer’s deals include 15 percent off online and in-store purchases from Nov. 5 to 10, $10 in Kohl’s Cash for every $50 spent from Nov. 6 to Nov. 10 and 10 to 20 percent off on Sephora at Kohl’s beauty items for its Beauty Insiders members from Nov. 5 to 15.
Macy’s
Macy’s is starting its Black Friday deals on Nov. 3, with new deals presented each week across all its categories. All Black Friday deals will then be offered between Nov. 23 to 27. Some deals include 40 to 50 percent off men’s and women’s boots, 50 percent off designer handbags, 50 percent off select beauty products, 60 percent off select homeware and 65 percent off sheets and bedding.
Nordstrom 
Nordstrom is offering up to 40 percent off on all its product categories throughout November. The department store will also be adding more deals the week of Nov. 19.

Old Navy 
Old Navy will offer 50 percent off on Black Friday. Stores will open at 5 a.m.
Sam’s Club
The membership-based retailer is hosting Black Friday deals from Nov. 25 to 28. Called Thanks-Savings, Sam’s Club will be discounting its products across all categories. On Nov. 25, customers will find Black Friday sales online only, as the retailer will be closing its stores on Thanksgiving.
Sephora
Sephora is offering holiday shopping deals starting Nov. 5 with its Holiday Savings Event for its Beauty Insider members. Each tier in the retailer’s membership receives different savings: Its Rouge members receive 20 percent off, its VIB members receive 15 percent off and Insiders receive 10 percent off on purchases until Nov. 15. Sephora will again offer more deals closer to Black Friday.
Target  
Target kicked off its Black Friday savings initiative on Oct. 31, with the retailer announcing it will offer new week-long deals every Sunday across electronics, toys, homeware, appliances, apparel, beauty and more categories. Deals include $100 off on Beats headphones and $200 off on HP’s 15.6 inch laptop.
From Nov. 4 to Nov. 6, Target will offer additional deals, such as the Element 65-inch Smart TV at $299.99 (originally $649.99), the Keurig K-Mini at $49.99 (originally $89.99) and the Bose QuietComfort Headphones at $179.99 (originally $299.99).
Walmart
Walmart is hosting its second annual “Black Friday Deals for Days” initiative starting on Nov. 3 and running through the end of the month. The initiative offers customers deals across the retailer’s product categories, including deals on electronics, toys, appliances, home goods, apparel and more.
The retailer will be releasing savings opportunities throughout the month, with deals hitting on Nov. 3 and Nov. 10. Other deal days have not yet been revealed.
READ MORE HERE: 
The Best 2021 Black Friday Beauty Deals 
What to Buy on Black Friday, According to Retail Experts 
10 Things to Expect During the 2021 Holiday Shopping Season 

Walmart continues to make gains in a turbulent retail environment thanks to its growing e-commerce, grocery and domestic businesses.    
“We had another strong quarter in every part of our business,” Doug McMillon, president and chief executive officer of Walmart Inc., said in a statement. “Our global e-commerce sales are on track to reach $75 billion by the end of the year, further strengthening our position as a leader in omnichannel. We grew market share in U.S. grocery, added thousands of new sellers to our marketplace, rapidly grew advertising businesses around the world and we’re finding innovative new ways to commercialize our data and build technology. We have a unique ecosystem of products and services designed to serve customers in broader, deeper ways and we’re grateful to our associates for making it all happen.” 

Tuesday morning’s earnings results revealed total company revenues for the three-month period ending July 31 were up 3.3 percent to $141 billion, compared with nearly $138 billion a year earlier. Sales in the U.S. division increased 5.3 percent to $98.2 billion, up from $93.3 billion a year earlier. Revenues at Sam’s Club rose nearly 14 percent during the quarter, year-over-year, to $18.6 billion, up from $16.4 billion a year earlier. E-commerce sales in the U.S. rose 6 percent during the quarter, year-over-year, or 103 percent compared with 2019’s second quarter. Comparable grocery sales in Walmart U.S. were up 6 percent, year-over-year, driven by growth in stores. 

Across categories, things like grocery, health and wellness, apparel, automotive, travel, party supplies and back-to-school essentials, such as lunch boxes, backpacks and stationery, were in demand during the last three months, as consumers increasingly flocked to physical locations.
“Customer behaviors changed during the quarter as people were shopping with us more in stores than online,” McMillon told analysts on Tuesday morning’s conference call. “I think some people view stores these days as boring; we don’t. The good news for us is that we can serve them either way. And of course, they get to choose.
“We’re focused on, how do we do a better job with all the inputs related to omni?” the CEO continued. “And that’s hard work. And building digital products that marry e-commerce with stores takes more work than just building an e-commerce solution; [it] takes more time, takes more complexity, but that’s where the secret sauce is. And if we can continue to blur the lines so that customers and members can shop however they want to shop, whenever they want to shop, the output metrics that we sometimes measure of e-comm versus store growth, for example, they’ll be what they are. But this quarter is kind of a good example of the fact that we can be somewhat indifferent. We’re trying to build a model where we’re completely indifferent to top-and-bottom line [growth] as it relates to how people shop.”
Meanwhile, while in-store traffic continues to pick up steam, the e-commerce business holds its own with a sizable portion of overall sales. 
“In some periods, in-store shopping will lead the way, and in some, e-commerce will lead the way, while we’re always striving for more in each part of the flywheel,” Brett Briggs, executive vice president and chief financial officer, said on the call. He added that online shopping revenues are not only on track to reach $75 billion this year, but also $100 billion in the near term.

To help the business grow even further, Walmart will continue to make investments “all the time,” said McMillon. 
“We manage the short term and the long term,” he said. “As everybody knows, we’re a company that’s particularly focused on the long term, particularly focused on the top line, [in order to] manage the bottom line.
“The business is changing shape,” McMillon said. “And I think that’s the key. We’re not just buying and selling merchandise in Supercenters at this point. We’re changing how the company is comprised. If you look at — just imagine a bar charter revenue or a bar charter profitability — the mix is shifting. And that unlock, as we stick with it, creates a different financial equation than what we would have had years ago.”
Company headwinds included cost pressures in the supply chain, inflation and Walmart International, where revenues fell more than 15 percent to $23 billion, compared with $27.2 billion the same time last year. 
While markets such as India, China and Mexico are rapidly expanding, Briggs pointed out on the call that “international divestitures significantly affect year-over-year comparisons.
“In addition, the pandemic continues to create both tailwinds and headwinds for the business. U.S. government stimulus benefited sales this year and last year, but many international markets continue to be negatively affected by COVID-19 and related government operating restrictions. COVID-19 costs remained elevated, but significantly lower than last year.”
The company logged $4.2 billion in consolidated net income as a result, down from nearly $6.5 billion a year earlier. Shares of Walmart were up just 0.4 percent at the start of Tuesday’s session as a result.
“Walmart’s same-store sales growth was the weakest in six quarters,” Garrett Nelson, senior equity analyst at CFRA Research, wrote in a note. “We also think current quarter [earnings-per-share] guidance of $1.30-$1.40 may be considered a modest disappointment in light of bullish back-to-school spending expectations. We maintain a ‘hold’ [on Walmart stock] on concerns related to margin contraction from slowing same-store sales growth and rising cost pressures.”

Still, Walmart raised its full-year outlook. The company is expecting net sales to increase 6 to 7 percent for the year, or by more than $30 billion, with earnings per share to be in the range of $6.20 to $6.35 apiece. The retailer is also anticipating sales in its international division will decline by about 21.5 percent and 22.5 percent in constant currency.
“Stores continued to validate Walmart’s ongoing investments as they were the key driver of the $1 billion increase in U.S. operating income on $5 billion in increased revenue, which is particularly impressive given the strength in its lower margin grocery-equivalent business that continues to grow share despite its massive scale,” said Charlie O’Shea, Moody’s vice president. “The meaningful upping of guidance for Q3 confirms our view that Walmart will continue to run on all cylinders, leaning heavily on its stores as it remains one of the premier global retailers by any yardstick.”
The retailer ended the quarter with $39.5 billion in long-term debt and $22.8 billion in cash and cash equivalents. 
Shares of Walmart, which closed up 0.82 percent to $150.75 a piece, are up more than 11 percent, year-over-year.
Walmart is also requiring all U.S. teams above store and club level to be fully vaccinated by Oct. 4.

Creighton Kiper, merchandising vice president of wellness at Walmart, is ready to bring wellness to the masses. 
Kiper, in an interview with executive editor Jenny B. Fine at the Fairchild Live Wellness Forum, said Walmart’s shoppers are very interested in the category, and like many wellness enthusiasts, are focusing on how to “improve themselves from within.” At Walmart, Kiper is responsible for vitamins, active nutrition and weight management, as well as mental health. 
“It is about progress and improving health and discipline, mentally, physically, emotionally, even spiritually, and you do it every day because the returns come across months and years and decades,” Kiper said. “Chances are you won’t hear anyone mention doctors or medication, but rather they’ll articulate what their personal responsibility is.” 

Walmart customers are interested in inner and outer beauty, fitness and mental health, as well as the connections between those categories, Kiper said. 

You May Also Like

“Whether it’s personal care, beauty, fitness, diet, we definitely are seeing changes that benefit retail, and most importantly, the customer,” he said. 
Walmart is seeing growth from sleep aids, collagen peptides and powder, beverage and gummy-format products, Kiper said. “It’s been sustained double-digit growth year on year,” he said. “We’re actually seeing customers build a regimen, and it’s really in those spaces around hair, skin, nails, around sleep and around metabolism as well.” 

Customers are willing to stick to their routines now, including when it comes to supplements. Part of it is because of visible benefits, like stronger hair skin and nails, but part of it is also about feeling better, Kiper said. “Melatonin and all of that is just good for not only beauty, but just the way your body operates, the energy levels that you carry,” he said.
Right now, people are looking for things that help with cognitive function, including memory improvement and better focus, Kiper said. Sleep products and immunity are also trending, he noted, and Walmart is working to figure out how it can work mental health into its offering. 
“We’re actually realizing there’s a lot of digital solutions in this space and so that creates an opportunity and a challenge as far as just us learning how to evolve the definition of what the solution is for the customer,” Kiper said. 
Walmart is also jumping on super niche trends, like chlorophyl water, which started trending on TikTok earlier this year, and translating them to the masses. 
“Our merchants were able to move really quickly in our marketplace business and our first party business and make sure the assortments we had we ordered up on inventory, they we curated some of the assortment to make it very easy for the customer to shop,” Kiper said.
From that, Walmart gathered data to figure out what physical stores would make sense to stock chlorophyl water in, Kiper said. “As we monitor all these pieces of data, we’re able to make decisions, so long-term locations and placements in stores,” Kiper added. 
“We joke that a trend has to last for more than four days, and we monitor those things,” Kiper said. “We let the customer tell us what they’re interested in, and if it’s just for a month it’s for a month, but it’s business to capture.” 

A new reusable bag pilot may be coming to a CVS, Target or Walmart near you.
The pilot is the crux of the “Beyond the Bag” initiative, launched by the Consortium to Reinvent the Retail Bag (with founding members such as CVS Health, Target, Walmart and Closed Loop Partners) to redesign the single-use plastic bag. In July 2020, the Consortium announced an innovation challenge gathering hundreds of applications from international innovators to create a new option for retail bags.
In all, $15 million has been committed to the initiative with Dick’s Sporting Goods, The TJX Companies, Inc., The Kroger Co. and more signing on.
Since the announcement of challenge winners in February, progress made is now materializing at stores.

Starting Aug. 2 through Sept. 10, select Beyond the Bag challenge winners will have their innovations tested across nine high-traffic CVS, Target and Walmart stores in Northern California, with progress updates and customer reach to be shared once the project is fully underway.
Four solutions, including Goatote (reusable bag kiosk), Fill it Forward (an app that tracks the use of bags customers already own), ChicoBag (reminds customers to use reusable bags on-site and get rewards for each use) and 99Bridges (Internet of Things-powered app called Mosaic that tracks end-to-end bag use) — will be tested in-store. Customers at participating stores can opt in to test these new solutions.

Calling the pilot an “essential step to test, incorporate customer and retailer feedback, and improve new solutions, exploring pathways to scale,” Kate Daly, managing director of the Center for the Circular Economy at Closed Loop Partners, a partner to the Consortium, said quick iteration is the aim.
The project mirrors a past initiative by The Center called the “NextGen Consortium” which included the commercialization of a more sustainable cup for pilot at McDonald’s and Starbucks.
“At Walmart, we believe climate change requires bold collective action. Minimizing plastic waste, in particular, depends on collaboration and cooperation across the retail industry,” said Jane Ewing, senior vice president of sustainability at Walmart. “These pilots represent a unique and exciting industry-wide commitment towards a more sustainable future, and we are excited to work with the Consortium to Reinvent the Retail Bag and to be a catalyst for meaningful change.”
Expressing excitement for the pilot, Amanda Nusz, senior vice president of corporate responsibility at Target and president of the Target Foundation added “co-creation,” “collaboration” and “continuous iteration” are key.
In addition to the in-store pilots, other winning solutions from the Beyond the Bag Challenge will be piloted and tested in different contexts, including reusable and refillable returns solution Returnity and digital identity solution Eon. Walmart delivery will test the solutions in select markets.
Initial learnings from the current pilot could inform scaled-up options in the future, as The Consortium to Reinvent the Retail Bag looks to evaluate the solutions and initiate future tests, programs and investments.

There’s no perfect read on this extraordinary moment in retail history — but Walmart Inc., Target Corp., Ralph Lauren Corp., VF Corp. and Macy’s Inc. together gave a kind of synopsis of the situation in the U.S. with their quarterly updates last week.
The pandemic is waning in the U.S. and Europe as vaccinations rise, consumers are coming back out (buying dresses, but staying casual) and the start of the new normal could be here after more than a year of hibernation. 
Many companies went bust in the pandemic, but the strongest players did their best to position themselves to try to catch the boom afterward — and now they’re starting to go for it. 
It’s an uncertain mad scramble for what’s next, with fingers crossed that some new COVID-19 variant doesn’t slow it all back down. 

Here, a look at what the industry learned last week as some of the biggest U.S. players opened their books and started talking more about the future now that they’re on firmer ground. 
Cash Is Still King
Amid the human tragedy of the coronavirus was a downright financial emergency — and it was the chief financial officers who had to act. They stepped in to cut costs and started storing up cash, while many also moved to cut their debt. Some companies have let loose of the purse strings — VF Corp. made its move to snap up Supreme in a $2.1 billion deal. But many are still sitting on a pile of cash that could be put to work as the industry continues its fast-forward transformation.

The fashion COVID-19 playbook generally called for squirreling away cash and cutting debt.

Date
Cash, Short-term Investments
(in billions)

One-year Change
Total Debt
(in billions)

One-year Change

TJX Cos. Inc.
5/1/21
$8.8
104.7%
$14.8
-10.1%

Target Corp.
5/1/21
$7.8
70.5%
$15.2
-8.7%

Walmart Inc.
4/30/21
$22.8
53.0%
$62.8
-18.0%

Ralph Lauren Corp.
3/27/21
$2.8
31.2%
$3.6
12.2%

Macy’s Inc.
5/1/21
$1.8
18.1%
$8.0
-6.6%

VF Corp.
3/31/21
$1.4
3.3%
$7.0
33.5%

Kohl’s Corp.
5/1/21
$1.6
-21.1%
$6.3
-18.4%

Source: S&P Capital IQ

Leaner and Meaner Leads
The crisis focused the corporate mind and many business models. The mantra for the strongest in 2020 was centered on coming out of the pandemic even stronger. That translated into efforts to cut costs, stores, real estate and focusing in on a company’s strengths. 
Ralph Lauren Corp. took over $700 million in sales out of its business last year as it shifted Chaps to a licensed model, agreed to sell Club Monaco, left more than 200 U.S. department stores, cut its off-price business and moved to reduce daigou sales. 
That has freed the company to build on its namesake brand and move prices higher — average unit retail prices at the company rose 26 percent last year and are on a four-year tear. 
“We view our brand as bigger than our business,” said Patrice Louvet, president and chief executive officer, who is especially pumped up about bringing 4 million new customers into the company’s direct-to-consumer network last year.  “Typically these new consumers are higher-basket size, higher profits from a gross margin standpoint and younger, so really an exciting profile,” he said. 
Party Hearty Ahead 
Jeff Gennette, chairman and CEO of Macy’s, said customers are ready to get out and spend — and keep spending. 
“You’ve got customers with very low credit card balances, lots of open to spend, and to varying degrees they’ve been cooped up over the last year,” he said. 

“This will be a gigantic gift holiday. We are approaching it that way,” Gennette said, projecting strong demand in fragrance, fine jewelry, boots, handbags and home categories. 
And New Year’s celebrations? The CEO is looking for them to “be at a whole other level.”
Keeping Habits 
As the world opens back up, most expect consumers to change again, rolling into the future instead of reverting back to where they were in early 2020. But as shoppers evolve, they are starting from an outlook that’s been shaped by a year spent closer to home for many. 
Michelle Gass, CEO of Kohl’s, said: “Consumers will continue to live more actively and casually as normalcy returns. As more people return to work, resume travel and attend events and gatherings, they are seeking out new and updated apparel while maintaining the preference for casual comfort, which fits squarely into the product categories we are taking a leadership position in. Against this backdrop, Kohl’s is positioned really well.”
Staying Essential 
While much of the industry was put on its back foot by the COVID-19 lockdowns, the broad line giants — especially Walmart and Target — were able to stay open and curry favor with shoppers as they doled out groceries and other essential items. And as the world has opened back up, they seem to be benefitting from the momentum.
Brian Cornell, chairman and CEO of Target Corp., said, “Market-share gains of more than $1 billion in the first quarter, on top of $1 billion in share gains a year ago, demonstrate Target’s continued relevance with our guests, even as they have many more shopping options compared with a year ago. Our performance in the first quarter was outstanding on every measure and showcased the power of putting our stores at the center of our strategy.” The mass merchant used stores to fulfill the majority of its online orders. 
Stores Star
After a year of amped-up growth of e-commerce, retailers are able to again accentuate their brick-and-mortar operations. For T.J. Maxx and Marshalls parent The TJX Cos. Inc., which is still heavily dependent on stores, that’s especially good news. 
“Our treasure-hunt shopping experience, eclectic mix of merchandise, and great brands and values continue to resonate with shoppers across our geographies,” said Ernie Herrman, chief executive officer and president. “While the environment remains uncertain, particularly internationally, we are convinced we are strongly positioned as we emerge from this health crisis.”

And offprice leader TJX said it’s not done building boxes. “We see a significant opportunity to grow our global store base at each of our divisions,” Herrman said. “In total, we believe we can open more than 1,600 additional stores to grow to about 6,275 stores in the long term just with our current banners and our current countries. Availability of real estate is terrific, and we see plenty of opportunities to open new stores or relocate existing stores.”
Techier Still
Fashion has spent the last year leaning into technology more than ever (and out necessity). The trend shows no sign of slowing down on either the consumer side of the business or the supply chain.
Steve Rendle, chairman, president and CEO of Vans and Supreme parent VF Corp., said: “We’ve been actively working to accelerate our hyper digital journey in fiscal ’21 with continued focus on a central consumer data platform that’s accessible to our brands and that enables them to understand consumers more deeply and to engage them in more meaningful and personal ways. And we leverage new technologies and processes to further digitize our go-to-market approach with advancements in 3D design and development, virtual product reviews and digital printing capabilities that shorten production calendars and accelerate our ability to flow newness and innovation.”
Not Over Yet
For the biggest of the big, operating with truly global scale, COVID-19 remains a real and present danger. 
Doug McMillon, president and CEO of Walmart, said: “The past several weeks have been more challenging in some countries. India, Canada, Chile and South Africa are priorities at the moment. Supporting our associates is our primary focus, but we’re also investing our resources to support the countries as we find opportunities to do so. In India, we’re donating oxygen concentrators, PPE and financial support.”
But through it all, Walmart has been able to press its advantages and expand. “We saw an acceleration of traffic in our stores, gained market share in grocery, improved in-stock levels and grew e-commerce sales globally by 43 percent in constant currency, excluding recent divestitures,” McMillon said in his update to Wall Street. “Global e-commerce penetration now represents over 12 percent of total company sales, an increase of 340 basis points over last year.”
More from WWD: 

The Politics of Fashion: A New World Order
Victoria’s Secret’s Single Life
José Neves’ Connected Retail Vision Is Taking Shape

Nogin, a market leader in outsourced e-commerce for major fashion and consumer product companies, has acquired the assets of ModCloth, the online retailer of women’s fashion and accessories. The purchase price was not disclosed.
This marks the fourth chapter for ModCloth, which was founded in 2002 and specializes in vintage-inspired fashions, shoes, handbags and accessories for 18- to 35-year-old women.
Nogin, based in Tustin, Calif., acquired the brand for an undisclosed sum from Go Global Retail, which purchased it from Walmart Inc. in 2020. Walmart had bought the brand in 2017 from ModCloth founders Susan Gregg Koger and Eric Koger as part of the discount retailer’s strategy to acquire digitally native brands to educate itself about next-generation e-commerce.

Over the years, Nogin has provided intelligent commerce solutions to major brands such as Honeywell, Hurley, Bebe, Lululemon, Justice, True Religion, Yeezy and most recently, Charming Charlie.
“We have a huge advantage of being able to get brands to be world-class and profitable within 90 days of putting them on our platform. It’s what we have always done. Investing where we see great potential is a natural extension,” said Jan-Christopher Nugent, Nogin chief executive officer. “We are thrilled to free up ModCloth to focus on delivering great products and stories to the brand’s community of passionate consumers, while staying true to its core values that champion female empowerment and inclusivity.”

Geoffrey Van Haeren, president and chief technology officer of Nogin, added, “We are truly excited to bring ModCloth into our fold. The shift to online is massive and we love delivering our intelligent commerce and innovations to brands that are not equipped for the unique demands of e-commerce. To date, this strategy has driven consistent exponential results.”
The company has retained about 55 ModCloth employees and kept the leadership constant, with chief marketing officer Mary Jimenez named CEO. She will be joined by members of the brand’s buying/brand/design/merchandising, logistics, tech/development/IT, accounting and HR teams, who will be based in Nogin’s Tustin headquarters, as well as customer service representatives in ModCloth’s Pittsburgh, Pa., call center.
Jeff Streader, managing partner with Go Global Retail, said, “ModCloth is an amazing brand poised for growth. We feel very good about the progress at ModCloth since our January 2020 acquisition of the brand from Walmart and are excited to see its momentum continue with Nogin.”
Back in 2019, just two years  after Walmart bought ModCloth to help it expand and remake its digital presence, the mass retailer agreed to sell the brand to Go Global.  Walmart had expanded ModCloth’s relationship with Nordstrom.
At the time of the sale, Streader said he expected ModCloth to expand in a number of ways with Go Global operations picking up more of the back end and the ModCloth team focusing on design and marketing. “We’re going to focus in on innovation in their digital strategy, inventing in social engagement and listening to our core consumer and responding with products that she wants,” said Streader at the time. The plan was for Go Global to invest in artificial intelligence and predictive analytics to rev up the ModCloth business, which was to be expanded to Europe and into China.

WWD reported in September that ModCloth had reopened in Europe and was going to begin a push in business in the region, reconnecting with customers online and courting new shoppers. Europe was an important market for ModCloth before it was purchased by Walmart in 2017. Walmart made a number of  changes, including pulling out of Europe, but  ultimately it wasn’t a good fit, and it was sold to Go Global. The changing of hands resulted in ModCloth closing its wholesale business and shuttering stores in New York; Austin, Tex.; San Francisco, and Washington, D.C., while zeroing in on its e-commerce business, which was good timing considering that the pandemic gave online sellers a boost.
In a telephone interview Wednesday, Nugent explained why he wanted to buy ModCloth and how sees it as a great fit.
“Our thesis has been helping brands really flourish online. It evolved from supporting as a service provider to then taking online licenses for some of the major brands and running them vertically. We now have a pretty good idea where we can take over the hard stuff with the technology and the R&D, and some of the e-comm services that encumber really talented brands that keep them from being able to do what they do.”
He said ModCloth “has great brand DNA, a wonderful customer, it’s very timely and there were just a lot of things they weren’t able to do because they were encumbered.”
ModCloth is the first brand Nogin has acquired. “There was a whole world of opportunity that we had not been exposed to until we engaged and basically said we were ready to invest and start buying brands,” said Nugent.
“Modcloth for us is great, they’re actually doing quite well. They were just encumbered by technology limitations and capital limitations. There are things we do very naturally, that for them, was challenging. We know when we take a brand and put it on our platform, we can optimize those things. It frees up the talent to really push the brand and the product,” said Nugent.
When asked if Europe and China would be opportunities for ModCloth, he said, “We’re a global platform, so our platform has multi-currency, multi-lingual, we have distribution partnerships in regions if we want to actually fulfill products out of those regions, rather than just shipping from the U.S. There’s a lot of opportunity.”

ModCloth, which presents a full range of sizes, offers free ModStylist services and collaborates with charitable organizations that advocate for women and animals. Its merchandise ranges from sportswear, dresses and swimwear, to footwear, accessories, home and gifts.
In Nugent’s opinion, “[ModCloth] really owns women’s empowerment, and diversity and being who you want to be.” He said the acquisition allows ModCloth to be externally focused on their customer and message, and Nogin can support the technology and development.
Having had several owners, Nugent said they plan to hold on to ModCloth for a long time. “Yes. For them, they went through a transition to digitally native. For us, digitally native is very near and dear to what we do. We’ve always owned the online channel for brands. For us, this is what we do. We’re a very ‘long term with the brand’  business model.”
Based on their experience working with so many brands, Nugent said they know a lot  about the female customer and how she behaves online.  “We can see how certain customers behave across a plethora of brands and that gives us an ability to help. It’s sort of that marriage between the merchant with the technologist and the ability to translate, so we can do the hard things and the nerdy things and the tech  things, and they can do the artistic, and brand and lifestyle things.” Nugent said they already put ModCloth on their platform even before the transaction was completed.
Tiger Finance provided a $6 million term loan to Nogin to help fund its purchase of the ModCloth assets from Go Global. Tiger Valuation Services is providing inventory analytics support.
“We are pleased to have been able to assist Nogin in its first acquisition of a consumer brand, as this fast-growing company looks to diversify beyond its traditional role of managing the e-commerce operations of major brands,” said Andrew Babcock, managing director of Tiger Finance. “This was a natural step in the company’s progression and provided the perfect opportunity for Nogin to step in and buy an established online retailer with a very loyal and passionate following.”
Nogin, which works with brands in fashion, consumer product goods, beauty, health and wellness industry, provides an e-commerce platform that includes research and development, sales optimization, and machine learning, along with artificial intelligence driven marketing and fulfillment.

FOR MORE STORIES:
ModCloth Returns to Europe
EXCLUSIVE: Go Global Inks Deal to Buy ModCloth From Walmart

Innovators are finding new ways to effectively eliminate the single-use plastic bag.
The Center for Circular Economy at Closed Loop Partners (led by CVS Health, Target and Walmart) announced winners of the “Beyond the Bag” Innovation Challenge on Tuesday. Announced last July, The Consortium to Reinvent the Retail Bag is a pre-competitive collaboration committed to “reimagining the retail bag” to create a circular delivery system. Founding partners aside, partners include Dick’s Sporting goods, Dollar General, Kroger and Walgreens among others.
“The single-use plastic bag is an urgent challenge that impacts all of us,” said Katy Daly, managing director of the Center for Circular Economy at Closed Loop Partners. “There is a demand from consumers and the market alike. We have seen a rise in legislation directed at this challenge, from the New York City ban on single-use plastic bags to the European Union’s 2019 Single-Use Plastics Directive. The demand and urgency is something all our partners recognized and we are thrilled that they are using their platforms to pioneer innovation and systemic change.”

Winners spanned three broad categories and included innovations from Domtar, PlasticFri and Sway (innovative materials), Eon, SmartC and Fill it Forward (enabling tech) and ChicoBag, Goatote and Returnity (reusable and refillable).

Related Gallery

This is just one of many steps in bringing innovative bag solutions to market. Reigning as the dominant form of retail bag, some 100 billion single-use plastic bags are used each year in the U.S. according to the U.S. International Trade Commission.
Jane Ewing, senior vice president sustainability at Walmart (one of the Consortium’s founding partners) similarly expressed excitement for the challenge. “The Beyond the Bag Challenge winners inspire us to reimagine a more sustainable future, showcasing the breadth and tangibility of innovative solutions and we look forward to supporting them in their development.”
With the majority of single-use plastic bags made from low-cost, fossil fuel-derived virgin plastic, raw material usage and material recovery after-use are the main considerations when rethinking solutions. Already, cities like San Francisco, New York and Montreal have plastic bag bans in place. Citing adverse consumer and regulatory reactions against single-use plastic bags, the Center for Circular Economy at Closed Loop Partners hopes to find a solution.
“As an organization, and for The Beyond the Bag Initiative, we look at everything through the lens of impact: how will each design affect people, businesses and the planet,” Daly said.
The three broad categories of reusable and refillable designs (including bags-as-a-service and shared-bag models), innovative materials (nature-derived materials like algae, seaweed and the like) and enabling technology (like RFID and QR tech already seen in use by retailers) are meant to align with the changing — and more sustainability-centric — retail environment.
With the guidance of global design firm IDEO, the judges, considered subject matter experts, narrowed down the winners from over international 450 submissions, shortlisting 58 submissions. In the evaluation criteria, entrants were required to submit a life cycle assessment, detailing the innovation’s environmental impact across the value chain and product life cycle, as well as detailed business plan and prototype information.

Calling the judging process “data-driven and deliberate,” Daly said “in the next phase of the initiative, the winners will begin working closely with the Consortium to prototype, refine and test the viability of their designs to scale as long-term solutions.”
Winners will receive a portion of $1 million in prize money and are eligible for additional financial support to support testing, piloting and scaling efforts. Depending on the solution, innovations can move on to the Circular Accelerator mentorship program to further hone their solutions or begin product testing. Daly said the Consortium will work closely with the winning solutions throughout 2021, supporting design research, testing, prototyping, mentoring and iterative developments. From there, select solutions will be piloted in market.
For More, See:
Completing the Circle in Fashion’s New Economy