Walmart and Gap Join Forces

Gap to Sell Home Goods at Walmart

Walmart (WMT) and Gap (GPS) are teaming up to sell a line of home goods. The line will include bedding and pillows, and will be sold under the Gap Home brand. The products will debut online on June 24. In the future, Walmart plans to sell the home goods at its brick-and-mortar stores also.

The alliance between the two companies underscores how retailers are working on creative ways to stay relevant and increase sales. In recent years, Walmart has started selling higher-end apparel and home goods to appeal to a wider base of consumers. Gap has been trying to revive its iconic brand, and views home goods as a useful way to do that.

Gap’s First Foray Into Home Goods

Gap and other specialty retailers have traditionally stayed away from selling their products through websites and stores which are not their own. They may have wanted to avoid cheapening their brands and/or keep distribution under their control. With competition getting fiercer, many retailers are rethinking that strategy and expanding their distribution partners. For example, many retailers are now selling their products on Amazon (AMZN).

This deal marks Gap’s first foray into home goods. Last year the company signed a licensing deal with IMG, which enables it to expand into home decor, textiles, furniture, and other home goods products. Gap Home products, which will only be sold at Walmart, will be developed in conjunction with IMG.

Walmart Goes High-End

Walmart has been working to build up its apparel and home goods offerings in recent years by adding more premium brands. Despite these efforts, the retailer so far has struggled to launch a hit brand. Earlier this year the firm appointed fashion designer Brandon Maxwell as the executive director of its Free Assembly and Scoop private label brands. It also announced plans to buy ZeekIt, a platform which allows online shoppers to see how clothes look on models with various body shapes.

As consumer habits shift, Walmart and Gap have each faced struggles as they seek to expand into new areas. It will be interesting to see whether their alliance pays off.

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