UPDATE 2-Wal-Mart moves NY fashion office back to Arkansas

* New York fashion office opened in 2009

* About 275 staff affected by unit’s return to Bentonville

* Company says focus on basics is working

Oct 26 (Reuters) - Wal-Mart Stores Inc is shutting its New York fashion office and consolidating buying operations at its home base in Bentonville, Arkansas, after flopping in its attempt to attract customers by offering trendier clothes.

The world’s largest retailer, which is now refocused on basic goods, made a splashy move to Broadway, in the heart of Manhattan’s Fashion District, in 2009.

At the time, the U.S. Walmart chain was attempting to broaden its business by offering more fashionable clothing to the millions of people who shop at its discount stores each week. But shoppers were not impressed and the company soon retreated from that strategy.

“When you consider our core strategy centered in basics and fashion basics, in order to execute our offices do not need to be located in New York,” Andy Barron, executive vice president of the Walmart U.S. softlines business, said in a memo sent to U.S. employees on Wednesday.

Also, roughly 40 percent of apparel operations, such as planning, are already in Bentonville, he added.

“It just makes sense to unite our apparel efforts in one location,” Barron said.

While Wal-Mart said it is pleased with the progress it has made in apparel, some of the unit’s leaders will be leaving.

“Moving the office to Bentonville is symbolic of their overall effort to go back to basics and go back to the core customer,” said stylist Shauna Miller, whose blog, Penny Chic (), shows people how to put together fashionable outfits using Walmart clothing and accessories.

“Their bread is always going to be buttered by basics,” she said.


The retailer’s renewed focus on basic clothing has helped in some categories. Still, overall apparel sales at stores open at least a year, or same-store sales, continue to fall.

“We’re very focused, very focused, on winning and basics; on socks, underwear, jeans and basic tops. It’s who we are; that’s what we stand for,” Chief Merchandising Officer Duncan Mac Naughton said at an analyst conference earlier this month.

In September, Walmart’s same-store sales of underwear, socks and jeans rose, Mac Naughton said.

Wal-Mart said it plans to relocate as many as possible of the roughly 275 workers in New York to Bentonville. It aims to fully move the business back to its home office by Feb. 1.

“The idea that you have to be in New York to put out trendy designs is totally false,” said Miller.

Lisa Rhodes, senior vice president of apparel merchandising, is leading the team through the transition and is expected to stay with Wal-Mart until July. Mary Fox, senior vice president of global apparel sourcing, is set to leave the company after the transition, around Feb. 1.

Jeff Evans, vice president of the men’s, kid’s, baby and shoe departments, is being promoted to senior vice president and will relocate to Bentonville. Marybeth Cornwell, senior vice president of home and apparel at Wal-Mart’s Sam’s Club warehouse store operation, is moving to the role of senior vice president of ladies’ wear, intimates, jewelry and accessories. They will both report to Barron.

The changes in apparel are the second department shake-up in recent weeks. On Sept. 27, Wal-Mart announced that two of its top e-commerce executives were leaving soon after an overhaul of that department.

Wal-Mart shares were up 1.1 percent at $57.33 in afternoon trading.