OK, I do not mean that Walmart is closing down the entire New York fashion industry. However, the news is still rather big. It appears that Wal-mart has finally come to the realization that they did not need a fashion merchandising office in New York city. Although it feels as if they opened last week, the office is approximately three years old. They have nearly 300 people in that NY office and I believe that they will be closing in early February (don't quote me on the exact number of employees nor the closing date).
The original philosophy was that the New York office would allow them to follow trends more closely. However, if they would have asked me before they decided to move to NY I most certainly would have told them that their idea was silly. First of all, Wal-mart never was and most likely never will be a trend setter. Therefore, why do they have to watch trends so carefully that they have to physically be in New York. Secondly, the majority of their softlines are purchased direct from "wholesalers". Sure, they also buy direct from factories, but as per my understanding the direct business is a less significant portion of their business. Let's keep in mind that if they are buying product from wholesalers, the "wholesalers" very possibly have an office in New York. The "wholesaler" is more then capable of identifying trends etc.
The reality is that Wal-mart may have over stepped their bounds. Anyway, I must applaud them for knowing when to cut their loses. It takes a very fine leader (smart retailer) to realize an error and then actually have the nerve to stand up and take corrective action. Clothing, which accounts for 7 percent of the company’s total sales of nearly $419 billion, has been one of the most challenging areas for Wal-Mart in recent years. However, with their move back to the basics, the section has recently shown some signs of improvement.
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