If you have investments in the retail exchange traded fund (ETF) Retail HOLDRs (RTH), then Wal-Mart is a company you probably follow, considering it makes up 18% of the fund. Wal-Mart has been trying to target a higher-end consumer – one that wants fashionable, higher-priced and higher-quality apparel. In October 2005, the company launched the Metro 7 womens line and later, Exsto, a men’s urban sportswear line. Marilyn Much for Investor’s Business Daily reports the results have been disappointing and despite aggressive holiday promotions, the core Wal-Mart customer didn’t respond.
The objective is to lure the already existing customer who shops for groceries and basic goods to buy the clothing as well. Sales have fallen 0.1% from a year ago with U.S. same store sales down 0.8%. The company should turn things around and wants to remain a formidable force in retail.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.