Wal-Mart's board is trying to reverse course from its well-documented high-profile fashion faux pas and they're bringing in a big gun to do that. One of the topics up for vote at the Wal-Mart annual investor meeting in Arkansas this week will be whether to add Allen Questrom to its board of directors. Within the retail industry, Allen Questrom is viewed as a master of merchandising and retail.
As the former CEO of J.C. Penney, Questrom has had experience turning around a struggling mid-priced retailer. He has the added value of having been in the CEO perch at high-end stores like Barneys and Neiman Marcus. He's even straddled the divide between the two retail worlds while in the C-Suite at Federated Department Stores. But is there value behind the headline of a first-class merchant helping to guide the world's biggest retailer to revive its apparel and home furnishings categories?
The short answer is "Yes."
While apparel constitutes about 15% of Wal-Mart's overall sales, it is an important category to build up when it comes to stabilizing Wal-Mart's overall business. Wal-Mart has a perception problem. Questrom understands that a successful retailer needs to know not just what consumers want but how those shoppers perceive the store itself.
From his time at Barneys and Neiman, Questrom knows store experience and brand perception is key. High-end consumers will pay up for a fashion item/luxury product if the experience is equally as luxurious. From his time at Federated and even more so at J.C. Penney, Questrom knows that balancing the experience with an emphasis on value and price point is central for any strong merchant.
A successful retailer can't go too far in either direction if they are trying to sell apparel or any type of product whose worth/purpose is based upon an aesthetic. Wal-Mart has been about utility. Perception is just one of its problems.
Clearly, Wal-Mart suffers from a number of other business-specific ailments right now. Along with other mega-cap stocks, its performance hasn't been as strong as Wall Street would like. Its low-income customer base is getting squeezed.
Its remodeling is still unfinished but its executive shakeups seem to be on pause for now. Wal-Mart seems to have diagnosed its own ailments. If the remainder of Wal-Mart's board focuses on understanding Wall Street's desires and Main Street's consumption habits it will help Madison Avenue market, not necessarily a friendlier Wal-Mart, but at least a more savvy one.
Many analysts read the nomination of Questrom as a sign that Wal-Mart may now be addressing its perception problem by taking some advice from 7th Avenue... and bringing in a master merchant. Will shareholders agree? We'll find out if Questrom gets the vote at the shareholders meeting on Friday. CNBC will be there live.
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