Gap is launching a new line of home goods—but you can only find it at Walmart
When Gap Inc laid out its long-term growth plan last October, the multi-brand retailer coyly said that its namesake brand, long suffering and long only sold at its own stores, would turn to wholesale deals with “a few selective partnerships” to get Gap on healthier footing.
Now, seven months later, the Gap brand has announced that the first such partnership is with none other than Walmart, the world’s biggest retailer, and a major rival of Gap, Old Navy, and Banana Republic in the apparel wars. Beginning June 24, Walmart will sell 400 home furnishing items by Gap under the new ‘Gap Home’ brand on its web site with the intention of eventually selling the merchandise at Walmart stores too.
It marks the first time in Gap’s history it will sell its wares through other another retailer. By focusing on home goods, a new category for the Gap brand, the brand gets to try out this untested component of its business model on a massive potential customers base without risking handing over its apparel customers to Walmart.
“I look at Walmart and I see their scale,” Gap brand’s CEO Mark Breitbard tells Fortune. “The Walmart customer is America.” And given the Gap brand’s struggles in the last decade, it’s easy to see why the Walmart customer is coveted.
The Gap brand’s sales had been falling for years even before the pandemic, coming in at $4.6 billion in 2019, a far cry from the $8 billion mark it was flirting with 15 years earlier. The company has also cut hundreds of Gap stores in recent years, with more to come, leading Gap to rely more on e-commerce, and now team up with other retailers, including the competition with wholesale arrangements.
The first batch of Gap Home products Walmart will sell include a washed denim pillow for $15.88 and a $64.98 comforter set made from the same fabric as soft Gap t-shirts. The Gap Home items will include home décor, tabletop items, bedding window treatments, and bath. Other categories like eyewear will follow.
But unlike Target’s collaboration with Levi’s on a line of home goods that included things like dog beds and ottomans earlier this year, the Gap-Walmart deal is not a short-term capsule collection, and will be an ongoing part of both companies’ business.
One of the most surprising aspects of the arrangement is that neither Gap stores nor its web site will sell the Gap Home items, making this a real test of how much the Gap brand can rely on wholesale partners. “This is us executing our plan,” says Breitbard. “It really is the story of Gap building infrastructure” for future such partnerships, he added.
But Breitbard dismisses the idea that selling through Walmart, which is a discount chain after all, could damage Gap’s brand, pointing to how much better Walmart’s web site presents products than in the past. The enormous traffic Walmart’s website garners—some 410 million visits in April, according to SimilarWeb—is obviously a draw, too.
As for Walmart, the Gap tie-up allows it to add a big name to its stable of home goods brands and additional pizzazz at a time spending on home items is booming.
“We wanted something that appealed to a broad swath of our customers but at the same time brought American timeless styling that fits a modern lifestyle,” says Anthony Soohoo, executive vice president for Walmart’s massive home goods business.
With Target’s home furnishing brands proving to be immensely popular, and Bed Bath & Beyond overhauling its own store brands, Walmart is under pressure to also raise its game on the home front.
“We believe that Walmart customers are going to really be backing it, so we’re really going to push it,” says Soohoo.
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