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Jennifer Marks

Wal-Mart Adds Home Brand Exclusives

Canopy, Better Homes & Gardens on Tap

Bentonville, Ark. — Wal-Mart may have stumbled last year with its attempt to reach too far up-market in recasting its home department, but execs last week asserted that home is showing improvement — and they announced a pair of ambitious multi-category launches for 2008 that will shake up the assortment.

In spring 2008, Wal-Mart will launch Canopy, a casual private label brand covering bedding, bath, table linens, rugs, dinnerware, furniture and lighting. Positioned as “essential” items, “these will not be trendy products in any way,” said Linda Hefner, evp and general manager for home, addressing Wal-Mart's two-day analysts and investors meeting here.

The private label program will roll out nationally with home decor goods only in most stores in February, and a select number of stores featuring the extended line. Walmart.com will offer the complete in-store line in addition to more products offered exclusively online.

“The Canopy brand is focused on providing durable, thoughtful, functional and livable decor that creates a warm and inviting home,” said Hefner.

Wal-Mart will follow up in fall 2008 with the launch of Better Homes and Gardens, part of an exclusive multi-year licensing agreement with publisher Meredith Corp. Merchandise will include bedding and throws; bath accessories; dinnerware and kitchen textiles; and decorative pillows, all designed with a traditional focus.

“Our customer loves traditional,” noted Hefner.

Better Homes and Gardens' creative staff will take an active role in product design, according to both companies. The licensing agreement represents the largest extension of products bearing the BH&G brand in the magazine's 85-year history, according to Meredith.

Both Canopy and Better Homes will be slotted as “better” merchandise. “We need good and better products, not best,” Hefner said. “Best” products in home will be presented only selectively, she said.

As with Wal-Mart's MainStays and Home Trends programs, the new labels will focus on driving price leadership. Referring to a Better Homes slide featuring fashion bedding, Hefner said it was a mock-up but noted, “Everything on that bed will sell for about $90.”

The retailer's MainStays program, she said, accounts for about one-third of home sales. Wal-Mart is working on improved product, packaging and marketing for the brand.

Executives also said that as Wal-Mart integrates the new branded home programs, it will use new system software to edit existing assortments and reduce skus.

In addition to the new brands, Wal-Mart in 2008 will expand its new Home layout beyond today's 26 test stores, focusing on new stores and remodels. The new layout features a “room solutions” orientation, navigational signage, lower-profile fixtures and “power walls” for key categories like towels.

Eduardo Castro-Wright, ceo of Wal-Mart Stores U.S., told analysts last week: “The remodels are already running much higher comps than the fleet” of non-remodel stores.

Generally, he said, the home business is already starting to do better, showing improvements in the second and third quarters. However, the department remains “a work in progress,” he said.

Indeed, Wal-Mart during the meeting projected a graph comparing its June-August home performance to the second-quarter comps posted by Bed Bath & Beyond and Pier 1. Bed Bath posted a 2.2% comp, ailing Pier 1 a 3.6% decline and Wal-Mart a 3.7% slide.

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