At its New York design studio, Walmart bets on affordable, trendy clothes

Brooke DiPalmaThu, October 15, 2026 at 10:00 AM UTC

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Za'kyra Davis checks out clothes from Walmart's No Boundaries collection at a Walmart Superstore in Secaucus, New Jersey, Thursday, July 11, 2024. (AP Photo/Eduardo Munoz Alvarez)

NEW YORK — On the fifth floor of an unassuming building in Manhattan, Walmart's New York City fashion office buzzes with activity as the low-cost retailer pushes for recognition in one of the style capitals of the world.

The minimalist office, formerly occupied by menswear brand Bonobos, is where Walmart (WMT) designs apparel for its private-label brands Scoop, Free Assembly, and Scenario as part of a betto attract the deeper wallets of higher-income customers.

There, roughly 160 Walmart employees across brand, design, fit, and style teams work to create $60 cashmere sweaters and other trendy items that the company hopes inspire people to ask, "That's from Walmart?!"

"We made a real intentional choice to say that we wanted to move forward even more in our fashion," Walmart US executive vice president and chief merchandising officer Julie Barber told Yahoo Finance. "The majority of our team sits in Bentonville. They're doing the buying, but we needed a select group of people here in New York closer to some of the trends and things that were happening."

The investment in private-label brands comes as many consumers, feeling the pressure from rising living costs, carefully weigh discretionary purchases. At the same time, Walmart competitors Amazon (AMZN) and Costco (COST) have carved out a space in the apparel market.

"I do think that Amazon and Costco have, in a way, paved the way for someone like Walmart to see a vision where customers can be thinking about buying apparel kind of from the same place that they're buying ketchup and laundry detergent," David Silverman, senior director at Fitch Ratings, told Yahoo Finance.

Slowing sales present yet another reason for Walmart to become a one-stop shop for design and essentials. In the second quarter, the company posted its slowest US same-store sales growth since Q4 of 2020, at 2.6%.

Grocery still accounts for the majority of Walmart's US sales; however, general merchandise, including apparel, represents a growing part of the business, and the percentage of sales coming from private-label brands increased by 1.3 percentage points year over year.

"There is … an opportunity to cover more higher-income shoppers who recently came in for grocery to cross the aisle to fashion," said Neil Saunders, managing director of GlobalData.

From grocery staples to New York Fashion Week

Walmart has been quietly building out its fashion strategy for years with the goal of getting shoppers, especially the high-income shoppers it gained in recent years, to spend more.

With most items priced under $25 for its Scenario brand, Walmart's private-label fashion brands remain affordable. But the retailer has also introduced higher-priced items, hoping it can attract customers from stores like H&M, Zara, and Bloomingdale's.

"At its heart, Walmart will always be about value, but it has realized that value for many consumers isn't just about super-low prices. It's about being able to buy nice things for less than they can elsewhere," Saunders said.

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It's not the first time Walmart has attempted to become more fashion forward. In the early 2000s, Walmart's fashion line, Metro 7, which was designed to compete with Target's (TGT) cheap-chic offerings, flopped after some initial success, with then-CEO Lee Scott saying its fashion offerings went "too far, too fast."

Walmart also scooped up digital brands in the late 2010s, including ModCloth and the aforementioned Bonobos, only to sell them later. Walmart kept the Bonobos Manhattan office, however.

In 2019, Walmart brought back the Scoop boutique label as an exclusive brand. In 2020, it debuted Free Assembly, an elevated, modern apparel line. Its bohemian fashion brand, Scenario, arrived in August of this year.

Whether Walmart can convince shoppers that it's trendy is another question. Barber said the company's influencer program, which partners with over 150,000 creators, is starting to turn the narrative.

"There's a price point … just a little bit higher than what we had been selling that we knew we could reach our customers," Barber said.

Last month, Walmart showcased its private-label fashion brands Free Assembly, Scoop, Avia, and Scenario at a Fashion Week pop-up on Bond Street in New York City. The location was directly across the cobblestone street from BONDST, a sushi restaurant where Taylor Swift, Travis Kelce, and other celebrities are known to frequent.

The pop-up featured apparel curated by American fashion designer Brandon Maxwell, known for his work with Lady Gaga, who has been tasked with drawing in a new audience since he began his role as creative director of Scoop and Free Assembly in 2021.

That's what got the attention of New York-based independent journalist Bianca Peters.

"You go into Zara, you buy a button-up shirt. It's $69," Peters told Yahoo Finance. "What Brandon Maxwell's done with Walmart — there's stuff on there that you've seen on Scoop, and you're like, this looks like it could be a designer brand."

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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