Is the Walmart/Justice tie-up a harbinger of more retailer brand partnerships?

Discussion
Photo: Walmart, Justice
Jul 19, 2021

Justice, which closed all 826 of its stores last year in bankruptcy proceedings, is making a comeback on the floors of Walmart timed to an expected record back-to-school season.

Founded as Limited Too in 1987 and geared towards girls between the ages of 6 and 12, Justice was acquired last November in the bankruptcy of Ascena Retail Group by Bluestar Alliance, which also owns Hurley, bebe, Tahari and Brookstone. ShopJustice.com relaunched in April.

Walmart becomes the exclusive fashion retailer for Justice with more than 140 items launching at 2,400 stores and Walmart.com. The range includes not only the fashion and accessories the brand was known for, but jewelry, bedding and bath, backpacks, stationery, skateboards and tech accessories. Shoes and pet accessories debut in September.

In a blog entry, Denise Incandela, EVP of apparel and private brands, Walmart U.S. said the retail giant has added more than 1,000 national fashion brands over the last few years. These include the relaunch of private label brands Time and True and Terra & Sky; the launch of “exclusive elevated brands” such as ELOQUII Elements, Free Assembly, Scoop and Sofia Jeans by Sofia Vergara; and the recent addition of national brands like Reebok, Celebrity Pink and Champion.

“Justice is a popular brand our customers know and love, and with the back-to-school shopping season underway, this new collection comes at the perfect time for our customers looking to elevate their style,” said Ms. Incandela in a press release.

Walmart just launched a Gap Home collection, and many digital native brands have entered physical retail through partnerships with traditional retailers. However, partnerships among national chains are still rare.

Sears drew headlines in the early aughts when it opened Lands’ End shop-in-shops. In beauty, Sephora will start opening counters inside Kohl’s in August following more than a decade-long partnership with JC Penney, while a Target/Ulta partnership begins this fall.

Beyond its Sephora deal, Kohl’s has formed recent partnerships with Tommy Hilfiger, Eddie Bauer, Lands’ End and Cole Haan in a national brands push. Walmart’s closest competitors, Target and Amazon, are focusing on private label offerings in apparel, including Target’s surprising move in 2018 to discontinue the successful C9 Champion line.

DISCUSSION QUESTIONS: Do you see more retail partnerships in the years ahead or is the Walmart/Justice deal a rare case and more about emphasizing national brands? Is the Justice deal a major win for Walmart?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The entire industry is accelerating toward a consummate dance between retailers who provide the operational expertise and brands who provide the products."
"Everyone wins. Walmart gets access to a trusted brand with staying power, Justice boosts sales without opening new stores, and customers win on convenience."
"It will be interesting to track how much co-marketing activity is devoted to the Justice brand and whether Walmart positions it as a BTS reason to shop."

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27 Comments on "Is the Walmart/Justice tie-up a harbinger of more retailer brand partnerships?"


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Mark Ryski
BrainTrust

As brands find their way to market, I expect to see many more of these types of brand collaborations and partnerships in the future. Justice was always a strong back-to-school brand, and so it makes great sense for Walmart of leverage this for their shoppers now that Justice has closed its stores. The brand still has value and Walmart is smart to recognize this.

April Sabral
Guest

100 percent agree with this one. It feels like a no-brainer to get their brand. I wonder if this is going to bring in new customers to Walmart — I would assume so. Not all Walmart shoppers are headed to the mall. Smart move, and why not?

Chuck Ehredt
BrainTrust

RetailWire has been reporting on this type of collaboration all year. Walmart is a platform (marketplace, commerce ecosystem, media platform – whatever you want to call it) and Justice is now mostly a product line that needs visibility, distribution, and logistics.

One of every brand’s top priorities during the next two to five years is to learn how to promote itself and reach sales targets on commerce and social media platforms that they don´t own or control. Customers now spend more of their time in these marketplaces and brands must be present to survive.

Of course, there are many additional benefits from partner collaboration beyond cost-sharing. The data sharing potential to build richer customer insights and improve personalization are tremendous. Brands that think they know a customer, or worse, own a customer, based on only the business they do directly with the customer are blind to how the market has evolved. They need to embrace complementary partners to extend reach and improve effectiveness.

Carol Spieckerman
BrainTrust

It’s great to see Walmart giving apparel and fashion some love in advance of BTS and the holiday shopping season. Key will be ensuring that product development and brand positioning carry on Justice’s promise without getting watered down. As massive as Walmart’s apparel business is, pondering just how good it could be, especially as shoppers return to stores, is a worthwhile exercise. Walmart is obviously on a roll here with its private brand revamps and recent partnerships. The Justice hookup by no means marks the end of Walmart’s opportunistic brand adventures. Retailers have a real opportunity to revive struggling, high-equity brands before they get musty. Walmart, Kohl’s, Simon Properties, and others are wisely taking full advantage.

Lee Peterson
BrainTrust

The key to this effort, and any similar venture, is product. Justice had to close because their perception of young girls as pink-dolly-play-time kids was way off the mark. So look for improvement there as a cornerstone to success – or not. Having said that, there is definitely a hole in that underserved market and the idea is solid. But again, nailing product for that customer base is not as easy as anyone thinks or thought.

Richard Hernandez
BrainTrust

I agree. While this looks like a good match for both, the assortment has to be relevant to the Walmart shopper. I hope this gets moving sooner rather than later to see the effect of BTS to start to measure the success of the collaboration.

DeAnn Campbell
BrainTrust

The entire industry is accelerating toward a consummate dance between retailers who provide the operational expertise and brands who provide the products. A winning example of the whole being greater than the sum of its parts. Within the next 10 years this partnership model will become the default across the retail industry. It makes so much sense to allow each side to focus their energy and money on a narrower area where they can become hyper adept and cost effective. A good analogy would be to see retailers as a coffee shop — let them focus on being great at coffee and customer service, and bring in delicious pastries from an expert baker who doesn’t have the resources to make good coffee. The customer wins on experience and choice and the brands and retailers see better financial results.

Dick Seesel
BrainTrust

As long as the alliance between retailer and brand is compatible (in terms of pricing, customer profile, and so forth), these kinds of tie-ups make sense. Mass merchants like Target, Walmart and Kohl’s gain the halo effect of established national brands, and those brands gain a vast amount of off-mail (and omnichannel) distribution that would be tough to achieve on their own. The continued decline of the regional mall will push these alliances forward.

Jennifer Bartashus
BrainTrust

The line between brand and retailer is increasingly blurred as more retailers integrate more brands into stores and marketplaces grow. Partnerships are likely to only increase in the future as brands seek ways to remain relevant in an increasingly online world. Exclusivity with a large retailer like Walmart, where the customer base has significant overlap is a good move for Justice following the demise of its brick-and-mortar stores, and can be an option for other brands. We’ve seen multiple examples of how this type of brand/retailer partnership can be beneficial to both entities as long as execution is handled well.

Lisa Goller
BrainTrust

Absolutely. More retail players will partner to gain competencies and reach to stay competitive.

Justice is a jackpot for Walmart to win with Gen Z girls and their moms.

To boost brand presence and assortment variety, we’ll see more collaborations like Gap and Yeezy, Casper and Sam’s Club and DTC brands and Target.

April Sabral
Guest

I hope to see more retailers collaborate like you said. There is room for this as we continue to see more DTC brands enter malls and take up space. It’s a way to continually reach new customers.

Liza Amlani
BrainTrust

We will see many more retail partnerships in the years ahead as this is a great way for brands to leverage each other’s customer base without spending the money on market research to acquire new customers.

It can be a win-win for both a brand and a retailer as they are both increasing their reach to new customers.

The challenge always comes down to the assortment. We must deep dive into why Justice failed in the first place and it usually comes down to product. As long as Justice and Walmart work together to build the ideal product mix, giving customers what they actually want and what they feel is missing from the existing assortment, this deal will be a winner.

Georganne Bender
BrainTrust

Walmart is bullish on growing its fashion business so partnering with well known brands makes perfect sense. The timing with Justice is good, too.

The list of fashion brands at Walmart is strong and will likely draw more than Walmart’s core customers. An in-store merchandise presentation makeover is needed ASAP. Hanging rods and round racks won’t do the product, well … justice.

Andrew Blatherwick
BrainTrust

This makes perfect sense for both retailers. Walmart is better at utilizing their space and will bring in large numbers of people looking for the Justice brand. For Justice it gives them 2,400 outlets for their brand to back up their online business.

Retailers that create strong brands can always gain from this sort of collaboration provided they are not in direct competition. The retailers need to ensure that they do not harm their margins too much but it will almost certainly give them a higher return in gross sales on their marketing investments. Retail will always stay dynamic and come up with innovative ways of operating efficiently — this is just another great example.

Neil Saunders
BrainTrust

With pressures increasing in grocery, Walmart has been very active in trying to improve its non-food offer. This is especially so online where, despite some progress, it remains significantly below potential with younger demographics. The partnership with Justice, similar to the partnership with Gap, is part of a deliberate strategy to improve quality perceptions and the assortments in a bid to attract more customers and spending. I see this as a smart move, although Walmart has quite a lot of work to do in stores and with branding and marketing if it is to really reshape perceptions of its fashion and home offer.

Kathleen Fischer
BrainTrust

Absolutely, this should be a win for Walmart. The Justice brand had a following among its core audience and if Walmart can appeal to that audience it will help “upscale” its brand and products and bring in some different customers.

Paula Rosenblum
BrainTrust

With all respect, this: “Walmart becomes the exclusive fashion retailer for Justice with more than 140 items launching at 2,400 stores and Walmart.com.” is not a partnership exactly. It’s more like the buying of goodwill associated with a defunct brand and making it, at least for a time, an exclusive brand for the company.

I’m assuming Justice has brand equity, which makes it a better call than creating a new private label.

Will it have long term value for Walmart, and is it something others should do? Tiger Direct didn’t have a great run with the Circuit City brand, and I think (could be wrong here), Linens N Things lasted for 15 minutes in its new incarnation.

It’s a unique year, and let’s see how it goes. But I really can’t compare Justice with Sephora. At all.

April Sabral
Guest

I love to see collaborations however as someone who rarely heads into a Walmart, I would hope that they have a great selection and are merchandised well online to attract the shopper who isn’t your typical Walmart shopper. I know that Justice was a great store experience for teens and their parents so I’ll be watching to see how Walmart manages the existing Justice customer. I am sure the brand has such fans who will head to a Walmart to grab it. Smart timing for back-to-school.

Steve Montgomery
BrainTrust

For Justice this is a way to get to brick-and-mortar retail without the cost and time it takes to open stores. The same is true for others. What they gain is a large presence quickly. What they lose control of is actual shopper experience. This is a tradeoff I expect more brands might make after seeing the impact the pandemic had on brick-and-mortar retail. While the brand would lose sales it would not be burdened with the ongoing cost of the stores.

Jenn McMillen
BrainTrust

Walmart has always wanted to be the Main Street of the U.S., so they are the best place to gauge the taste of middle Americans. I bet this is the first of many partnerships.

Rich Kizer
BrainTrust

I think it is rather simple: Walmart is a big power player with brilliant operators running the show, that enjoys (offers) power in markets everywhere. I don’t know if I would call this a major win for Walmart, but it is a brilliant move for both parties.

Harley Feldman
BrainTrust

More partnerships will be coming. Walmart has a huge and strong presence in retail and Justice needs stores and an online presence to succeed. Other partnerships are likely helping both parties achieve better market presence. This is a major win for Walmart as Justice is a strong brand that will bring new customers to Walmart and walmart.com.

Jeff Sward
BrainTrust

With all the examples in the article and also in the comments, it’s pretty clear that collaboration is the strategy of the moment, and for a while to come I suspect. And definitions will get a little fuzzy. Is Justice still a national brand or is it now effectively a proprietary brand for Walmart? Malls and retailers that are still standing by 2025 will have survived a brutal shake-out. That doesn’t mean that the retailers and brands that didn’t survive still can’t have a role. Justice is a great example of how a retail brand can have a bountiful second life. And look at the roster of brands that ABG is building. Collaboration will be their very lifeblood. How many of those previously national brands will have continued life as a national brand? Or will they find future life as a collaborating exclusive brand with some parent retailer or mall?

Cathy Hotka
BrainTrust

Everyone wins. Walmart gets access to a trusted brand with staying power, Justice boosts sales without opening new stores, and customers win on convenience. What’s not to like? We’ve already seen The Vitamin Shoppe partner with Weight Watchers — look for more partnerships going forward.

Craig Sundstrom
Guest

Insofar as “closed all 826 of its stores last year in bankruptcy” seems to be the motivating factor here, I’m hesitant to endorse the idea of a surge in such arrangements (what might I be implying?).

As noted in the story, such arrangements have always existed, and I certainly expect that to continue: “more,” yes, but not dramatically more. As for how well this will work out for Walmart, I’m sure they did due diligence and will risk little, if anything. How much upside there is I would think is limited by the history of the partner … bankruptcy and liquidation isn’t exactly a ringing endorsement.

James Tenser
BrainTrust

Walmart has vast distribution power and wants compelling brands to sell. Justice has brand fans in its demographic, but lacks a distribution network. Seems like a good match, but one that is likely to have a limited life cycle.

There is plenty of precedent for exclusive brand distribution in mass merchants and department stores. Calling this one a “partnership” doesn’t change the fundamentals much.

It will be interesting to track how much co-marketing activity is devoted to the Justice brand and whether Walmart positions it as a BTS reason to shop.

Ricardo Belmar
BrainTrust

Justice needs distribution now that they don’t have stores, and Walmart needs a boost to their apparel image, so that makes this a potential win-win. But it will depend on how Walmart merchandises and promotes the Justice brand in the run up to back-to-school. The potential is there, but it’s up to the execution now!

wpDiscuz
Braintrust
"The entire industry is accelerating toward a consummate dance between retailers who provide the operational expertise and brands who provide the products."
"Everyone wins. Walmart gets access to a trusted brand with staying power, Justice boosts sales without opening new stores, and customers win on convenience."
"It will be interesting to track how much co-marketing activity is devoted to the Justice brand and whether Walmart positions it as a BTS reason to shop."

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