Blog Four: Wal-Mart Shifts Apparel Buying to New York

Refer to the recent article published on BusinessWeek.com titled Wal-Mart Shifts Apparel Buying to New York

Last week, Wal-Mart Stores made a decision to consolidate its apparel buying operations in New York instead of the Bentonville headquarters location. This meant major changes for the two big companies that sell their merchandise to Wal-Mart stores and have a large portion of their revenues come from the retailer. Those two companies being VF and Hanesbrands. I will be focusing on VF and the impact of Wal-Mart's decision because I am employed as an intern with VF Jeanswear that sells directly to Wal-Mart. When I came to work the day after Wal-Mart had made the decision to send their apparel buying to New York, all the top merchandisers were on the edge, nervous, and frustrated. When my boss told me of the news, she simply stated "Of all my years of working in this industry, I have never seen anything like this!"

Wal-Mart' plan with the recent decision was a part of the restructuring process and, to Wal-Mart leaders, it made sense to move apparel operations to the city that is all about apparel and fashion. Why would there be an apparel operation in the middle of Arkansas anyway? According to the article, the only apparel functions that will remain in Bentonville will be the in-season planning, replenishment, pricing, and modular development. The apparel functions of design and development, marketing, buying, preseason planning, and brand merchandising will all be moved to the New York location.

This relocation and restructuring strategy left 700 to 800 Wal-Mart corporate headquarters employees jobless. I would have never expected the big power house such as Wal-mart to make such a huge layoff at it's corporate office. Through working with Wal-Mart at my current job, there were no obvious signs of any changes, but I guess this is a way of telling that you never know what to expect. For the juniors department that I work in, we had just been offered more floor space in quite a few of the high volume Wal-mart stores, which is a big deal with the current economic standing. The current changes in the apparel functions of Wal-Mart have presented a challenge for the employees of VF in being more innovative in the apparel process and merchandising more effectively since managers will now be presenting their merchandise to a much more competitive and informative audience.