By Dhirendra Tripathi
Investing.com – Amazon stock (NASDAQ:AMZN) was up 0.5% in Thursday’s premarket as traders warmed up to the company making a foray into offline retail of clothing, shoes and accessories.
The world’s largest online retailer is launching a clothing store in Los Angeles suburb of Glendale later this year. Amazon owns physical grocery and bookstores, but it has never sold clothing or shoes under that roof.
“You’ll find everything from the $10 basic to the designer jeans to the $400 timeless piece,” CNBC quoted Simoina Vasen, managing director of Amazon Style, as saying. “We want to meet every budget and every price point.”
The company will rely on smartphones and touchscreens installed inside stores to make selection a more pleasant experience. Customers won’t have to leave the fitting room to call for a new item. Each item will be dropped off in a secure closet, which will unlock after an associate has delivered it.
Apparel is a focus area for Amazon. According to Wells Fargo (NYSE:WFC) analysts' estimates, Amazon’s 2020 apparel and footwear sales in the U.S. grew by around 15% in 2021 to top $41 billion.
Amazon’s most serious display of its intent to have a physical presence became evident in 2017 when it acquired Whole Foods for $13.7 billion, although it had opened a bookstore two years prior to that.
The company's accounts, which don't break out operating results for either Whole Foods or fashion-related sales, suggest that both operations lose money currently. Whole Foods in particular is struggling with loss of market share after introducing a $9.95 delivery charge at a time when many competitors are still offering free delivery over a certain order value.
Vasen said the Style stores won’t offer any special discounts for Prime subscribers.