Walmart teams up with Ellen DeGeneres for new denim-focused clothing line

Key Points
  • Walmart is bulking up its apparel brands in stores and online to compete with Amazon, Target and others.
  • The new clothing line with Ellen DeGeneres, called EV1, will roll out in Walmart stores and online next month, with all items priced under $30.
Ellen DeGeneres speaks onstage during 'One Voice: Somos Live! A Concert For Disaster Relief' at the Universal Studios Lot on October 14, 2017 in Los Angeles, California.
Kevin Winter | One Voice: Somos Live! | Getty Images

Walmart is partnering with Ellen DeGeneres on a new clothing line as the retailer looks to bulk up its apparel brands in stores and online to compete with the likes of Amazon and Target.

The move builds on Walmart's partnership with Lord & Taylor that was rolled out earlier this year on Walmart also recently started selling in-house apparel brands for women, kids and plus sizes.

Amazon is on track to surpass Walmart as the No. 1 apparel retailer in the U.S. by year's end, according to Morgan Stanley. But Walmart isn't going down without a fight. It's been taking steps to become more of a fashion destination than it is today.

Amazon has focused on adding more in-house brands and partnering with Calvin Klein, Chico's FAS and Nike to bring more merchandise from well-known retailers to its platform.

Walmart's new line with DeGeneres will be called EV1 and will hit stores and next month, the company announced Wednesday. It will have nearly 60 items, including denim, graphic tees, sneakers and purses for women. According to Walmart, the "core" of the line is denim.

Target also recently launched a new denim-focused line called Universal Thread. The discount retailer has also been investing in fashion and has tended to team up with celebrities like Victoria Beckham more often than Walmart.

While the denim category had been falling out of fashion, particularly among younger shoppers, it's showing signs of a rebound. The $13.5 billion U.S. women's and men's jeans market grew sales by 4 percent from 2015 to 2016, according to the most recent tracking survey by The NPD Group.

All items from DeGeneres' EV1 line will be priced under $30, Walmart said, and there will be a "wide range" of sizes.

"The biggest inspiration [for EV1] was actually inclusiveness," DeGeneres said in a statement. "We wanted it to appeal and be available to as many people as possible."

DeGeneres notably served as J.C. Penney's spokesperson in 2012, while the department store chain was being led by CEO Ron Johnson. Her role was met by a wave of outrage from a conservative, anti-gay and Christian group, "One Million Moms," which complained that the openly gay DeGeneres was diluting the Penney brand, and that group's members would refuse to shop there.

As Walmart revamps its website with more to choose from in the fashion department, retail industry experts say apparel spending is increasingly drifting online. Shoppers are becoming more comfortable with buying items via the web because retailers are reducing shipping fees and making the returns process easier.

"The launch of EV1 is one of many steps we're taking to establish as a fashion destination," Denise Incandela, head of Walmart's e-commerce fashion division, said in a statement.

Walmart shares are up roughly 12 percent from a year ago, bringing the retailer's market cap to about $268 billion. By comparison, Amazon has a market cap of $935 billion and Target's is nearly $44 billion.

Bentonville, Arkansas-based Walmart is set to report second-quarter earnings Thursday morning. Analysts and investors will be looking for updates on Walmart's e-commerce investments, including its acquisition of Indian e-commerce giant Flipkart.

— CNBC's Courtney Reagan contributed to this report