What Ellen DeGeneres means to Walmart

How Walmart is taking on Amazon
How Walmart is taking on Amazon

Ellen is helping give Walmart a makeover.

The world's largest retailer recently announced a partnership with Ellen DeGeneres for EV1, an exclusive clothing line debuting next week online and in 2,300 of its stores.

EV1 will feature nearly 60 items, including denim jeans, graphic t-shirts, and sneakers, each $30 or less.

"EV1 promotes kindness and love and diversity," DeGeneres said in a blog post. "The biggest inspiration was actually inclusiveness."

Retailers and brands partner with celebrities all the time, but Walmart's (WMT) DeGeneres deal highlights the company's effort to project a more inclusive image — and bolster its fashion choices.

"Ellen gives them a very visible symbol to build off," said Alan Ellstrand, the associate dean of the Walton College of Business at the University of Arkansas. "It's a little unexpected for the typical Walmart image."

Creating a kinder, gentler Walmart has been a top priority for chief executive Doug McMillon. He rose up the ranks at Walmart and took over as CEO in 2014.

Bringing in DeGeneres boosts Walmart's progressive credentials and taps into her broad appeal. It is the latest example of Walmart looking for ways to attract younger, urban, and more diverse shoppers and tighten its grip on middle America.

Fashion chops

DeGeneres also adds a fresh look to Walmart's revamped clothing lineup.

ellen walmart
EV1, Ellen DeGeneres' new line at Walmart, debutes on September 10.

Clothing makes up less than a tenth of Walmart's sales — compared to 20% at Target (TGT)— but the company has been expanding its premium and affordable selections to distinguish itself from rivals.

On the premium end, it has acquired specialty retailers like Shoebuy, Bonobos for men, ModCloth for women, and Moosejaw outdoor gear. Bonobos, for example, sells a pair of men's pants for $98, while Walmart's brand costs around $20 on its website.

Walmart is careful to operate the brands as standalone businesses, but analysts believe it will seize opportunities to integrate the two. It recently did that with Moosejaw, debuting a curated outdoor page on the redesigned Walmart.com.

Walmart joined with Lord & Taylor for a dedicated page on the site, too. McMillon has told analysts that Walmart is looking for other companies to partner with to sell through its website.

EV1 strengthens Walmart's clothing offering downmarket.

In February, it announced four new lines: Time and Tru for women, plus-sized Terra & Sky, Wonder Nation for kids, and George for men.

Walmart plans to make the brands more visible by remodeling floor plans, adding signs to help customers shop around, and upgrading fitting rooms in select stores.

Improving the quality, design, and store layout of its cheaper clothing offering will help drive sales and improve profit margins, Walmart US CEO Greg Foran told investors in June.

"One of the reasons I like apparel is you stand in our stores and you just have a look at our apparel and you just go, 'Wow, the value of that is incredible,'" he said. "It's instant gratification for a customer."

Walmart's overhauled fashion strategy is working so far: Last quarter, an increase in clothing sales helped lift Walmart to its fastest growth in a decade.

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