Denise Incandela, the Senior Vice President of Fashion at Walmart Inc. (NYSE: WMT), has built a career around transformation and disruption in the retail industry. With her experience spanning roles at luxury retailer Saks Fifth Avenue and currently at Walmart, Incandela is a seasoned disruptor and transformational leader, focusing on key areas like understanding past successes, customer needs, and the importance of capable leadership.
Walmart’s Senior VP of Fashion Has Ambitious Plans
Speaking in a fireside chat with Oliver Chen from Cowen & Co. LLC, Denise Incandela discussed her role, various management decisions and recent progress at Walmart.
One major lesson Incandela has learned over the years is the importance of bridging a company's past success with its future aspirations. It’s not about wiping out the old, it involves understanding the critical components of a business that should continue and identifying the key initiatives required for growth without alienating the core customer base.
A significant part of her role involves understanding the talent within the organization and identifying who can pivot and take the business to the next level and who may not be able to. It also involves bringing in leadership that can get the organization excited about the future.
The Only Constant is Change
One fact that Incandela understands deeply is that "the only constant is change" – a statement famously emphasized by Doug McMillon, the CEO of Walmart. It is this ethos that she has committed to at Walmart: delivering a clear vision, being fact-based, and ensuring that the organization is excited about the future.
The three main focus areas of Incandela at Walmart are assortment, shopping experience, and marketing. She has emphasized democratizing fashion, aiming to offer higher quality items at different price points to meet the needs of a broader customer base.
By bringing in national brands like Reebok, Justice, Chaps, and partnering with celebrities like Brandon Maxwell and Sofia Vergara, she aims to serve more of the customers' closets and wearing occasions.
Further, the shopping experience is a crucial area of focus for Incandela. She's driving the rollout of Walmart's 'Store of the Future', a concept currently being tested. Along with this, she's heavily involved in overhauling Walmart's e-commerce business to enhance the online shopping experience for customers.
Widening Walmart’s Appeal
Incandela is also spearheading efforts to broaden Walmart's appeal and change the perception of the brand through focused marketing initiatives. This effort aims to reach out to a wider demographic and attract a higher-income customer base to Walmart.
Regarding the health of the consumer, Incandela recognizes that it varies based on household income. She notes that households with incomes of $50,000 and under are stressed and spending mostly on groceries.
On the other hand, Walmart has seen a significant increase in $100,000 plus household income customers over the last year. She attributes this to Walmart’s resonating strategy on the apparel side, as they move beyond opening price point to serving more wearing occasions for higher-income households.
Incandela’s background in luxury retail and branding brings a unique perspective to Walmart, which is geared towards a more mass-market consumer. She is excited about bringing a taste level that everyone should have access to, not just the affluent.
Incandela’s focus remains on delivering beautiful clothes to everyone, irrespective of their spending ability, aligning with Walmart’s vision of enabling customers to “save money and live better”.
With her passion for products and her diverse team from various fashion backgrounds, Incandela is optimistic about continuing to democratize fashion at Walmart and meeting the evolving needs of customers.
Her work represents a unique blend of understanding past success, respecting the heritage of a brand, and innovatively guiding it toward future success.
Fast Fashion Shifting Gears
Under the guidance of Denise Incandela, Walmart is transitioning to a fashion-forward approach. This shift involves incorporating more trendy and casual workwear, enhancing its presence in the fast fashion domain.
The company has faced several unsuccessful efforts in the past to revamp its clothing sector. However, the company now sees a unique opportunity due to ongoing inflation and shifting perspectives among younger consumers.
Ultimately, Walmart is evolving its retail strategy to become a destination for affordable yet stylish fashion, a move that could impact the perception and performance of WMT stock.
The term fast fashion refers to the rapid production of inexpensive clothing in response to the latest trends. While Walmart's fashion venture under Denise Incandela's leadership marks a strategic pivot, it also opens up discussions about the role of large retailers in promoting more sustainable practices within the garment industry and reducing the harmful environmental impacts associated with fast fashion.
Fast fashion brands, including Walmart, have faced criticism for the environmental impacts of their practices. These impacts are multifaceted, involving considerable amounts of waste, high global carbon emissions, and substantial use of fossil fuels.
The supply chains of fast fashion retailers often contribute to these issues, with the production processes being harmful to the environment. The garment industry, particularly fast fashion garments, is notorious for contributing to significant textile waste.
There’s a growing movement towards slow fashion, which focuses on more sustainable and ethical practices, using environmentally friendly materials like natural or recycled fibers instead of synthetic fabrics.
Consumer demand plays a pivotal role in the fashion industry's environmental footprint. The shift toward more sustainable practices requires not only changes from companies like Walmart but also a transformation in consumer behavior, favoring products that generate fewer environmental impacts.
Who is Denise Incandela?
As the Executive Vice President of Apparel and Private Brands at Walmart U.S., Denise Incandela leads the transformation of Walmart into a fashion destination. She brings stylish, quality apparel to its 139 million weekly shoppers, reinforcing Walmart's reputation in fashion.
Denise has integrated over 1,000 national brands into Walmart’s apparel assortment and developed exclusive, high-value brands.
Her leadership introduced virtual try-on features and emphasized sustainable fashion practices. Her previous roles at Aerosoles, Ralph Lauren, and Saks Fifth Avenue showcased her ability to drive growth and digital innovation.
Widely recognized by prestigious organizations, Denise's impact in the retail industry is profound. Holding an MBA from Wharton Business School and a B.S. from Boston College, she continues to shape the future of retail with her expertise and commitment.
WMT Stock Q3 Earnings Results November 17, 2023
Walmart's Q3 earnings report showed a mix of positive outcomes and cautious investor reactions. Despite a revenue beat of $160.8B and an EPS of $1.53 exceeding expectations, Walmart's shares traded 8.1% lower.
The company reported a 4.9% increase in U.S. comparable sales, excluding fuel, along with raised FY24 guidance for both top and bottom lines.
Analysts had mixed views on Walmart stock.
Citi raised its target to $190, focusing on Walmart's unit growth and value perception, while DA Davidson and Piper Sandler also maintained positive outlooks with target prices of $182 and $210, respectively. However, Stifel lowered its target to $169, citing concerns over disinflation's impact on future sales.
Overall, 83% of sell-side ratings are 'Buy,' with an average target implying a 15.6% upside. Walmart stock valuation stands at a next twelve month P/E of 22.3x, slightly below its five-year average.
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