Wal-Mart is creating a home for luxury fashion online.
The big-box retailer announced Monday it has partnered with Lord & Taylor to create an online "flagship store" for the apparel retailer. The landing page will launch on Walmart.com in spring 2018.
"Our goal is to create a premium fashion destination on Walmart.com," Denise Incandela, head of fashion for Wal-Mart's U.S. e-commerce division, said in a statement. "We see customers on our site searching for higher-end items, and we are expanding our business online to focus on adding specialized and premium shopping experience, starting with fashion."
Incandela previously worked as chief marketing officer for Saks Fifth Avenue, which, like Lord & Taylor, is part of Hudson's Bay. She just moved to Wal-Mart in October and is responsible for the company's fashion business across Walmart.com, Jet.com and Shoes.com.
Through this partnership, Walmart.com will provide Lord & Taylor dedicated space on its website, as the department store chain continues to operate its own e-commerce platform.
"Walmart.com is a shopping destination that reaches a wide base of customers looking for premium fashion brands," Lord & Taylor President Liz Rodbell said in a statement. "As retail continues to change, this flagship store creates enormous growth opportunities for Lord & Taylor and our brand partners."
It was rumored in October that this deal would come to fruition.
The Wall Street Journal reported at the time that this was part of Wal-Mart's broader effort to build a shopping destination online that rivaled that of Amazon.com.
The Arkansas-based retailer's strategy of late has been to acquire smaller brands, many of them with a focus on fashion. The list of apparel and accessories brands now owned by Wal-Mart includes Bonobos, Modcloth, Shoebuy and Moosejaw. In a move to beef up its grocery offering, Wal-Mart also acquired Jet.com, bringing Quidsi co-founder Marc Lore to its management team.
Lore has specifically said he wants to "elevate the Walmart.com brands." At a recent investor day, he also explained that Wal-Mart has plans to redesign its website, with a focus on household goods and fashion.
"Expect to see those experiences get elevated," Lore said about Wal-Mart's home and fashion departments.
Wal-Mart said Monday it's beginning to build out "elements of discovery and inspiration" within the fashion portion of its website. The company declined to comment on whether there will be more brand partnerships in the future.
In working with Lord & Taylor, Wal-Mart could begin to shift Walmart.com's image away from that of a discount site for consumer packaged goods and into that of an online platform with luxury brands.
Meantime, Lord & Taylor has problems of its own, met with declining sales and weaker foot traffic. In a bid for fresh capital, the retailer recently announced that its flagship store on Fifth Avenue will soon become the new global headquarters of WeWork. After the holidays, Lord & Taylor will occupy only a small portion of the building.
A Wal-Mart partnership could entice more shoppers — and new ones at that — to the department store chain's brands.
The two companies have yet to reveal which retailer will be shipping purchased items. But the Journal reported in October that — in the event of a deal — Lord & Taylor would own the inventory and fulfill orders from the new website.
Monday's announcement comes as Amazon has been making its own push into fashion. One example of this is Prime Wardrobe. The internet giant also recently unveiled two private-label athletic apparel brands, as it continues to lure top brands, such as Nike, to sell directly from Amazon.com.
Earlier this year, Amazon began working with department store chain Kohl's to sell some of its electronics in the retailer's stores. In turn, analysts are already predicting Kohl's locations will be a testing ground for Amazon's private-label apparel business.
Kohl's and Amazon declined to comment on future initiatives.
All things considered, competition is only intensifying within the industry. Wal-Mart is also reportedly raising prices on some items across its website, in a move to drive store traffic where Amazon doesn't operate, the Journal reported Sunday.
Wal-Mart is set to report third-quarter earnings before the bell on Thursday.
— CNBC's Courtney Reagan contributed to this reporting.
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