New Competitor Tries to Flank Wal-Mart

Canada-based grocery giant Loblaw Cos. opened its flagship store on Manhattan’s Fifth Avenue on March 30, but instead of selling lettuce and tomatoes, the store will have dresses and button-up shirts.

Seven years ago, Loblaw Co. asked Joe Mimram, the founder of Club Monaco Inc., to design a clothing line, in part to help compete with Wal-Mart Stores Inc. (NYSE:WMT). What came out of it was a resounding success, and Loblaw now has 12 standalone clothing stores in Canada and five in New York and New Jersey.

“We’ve opted to take the brand international, with New York being sort of the window into that expansion,” Mimram said. “We still think there’s another 20 percent growth available to us, but the real growth now is going to have to come from outside of Canada.”

This shift from produce to clothing — or vice-versa — isn’t quite as bizarre as it sounds. In fact, a few American stores have already taken that path, including Target (NYSE:TGT) and Wal-Mart.

Loblaw’s Joe Fresh aims to fill the space between apparel from Gap Inc.’s (NYSE:GPS) Old Navy and H&M, Mimram said. The line has “a style that we are known for, which is cleaner colors, a little more preppy than some of the other fast-fashion houses, with a little bit of European influence.”

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