Hy-Vee has ended partnerships with clothing company Joe Fresh and shoe brand DSW as it seeks to focus on its grocery and health care businesses, a spokesperson for the company says.
In recent months, the West Des Moines-based chain removed all the Joe Fresh clothing sections and DSW Shoe departments from stores that had them, according to Hy-Vee spokesperson Tina Potthoff.
Hy-Vee made the moves as it doubles down on its health care business, including announcing Jan. 30 that it had acquired a 50% stake in Exemplar Care, owner of Des Moines metro primary and urgent care clinics.
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Joe Fresh merchandise was sold in 23 of Hy-Vee’s about 285 stores, and DSW Shoes were sold in 18 stores, including Hy-Vee’s Fleur Drive location in Des Moines and its North Ankeny Parkway, Urbandale and Grimes locations, as well as in other cities, including Springfield, Missouri.
Representatives of Toronto, Ontario, Canada-based Joe Fresh and Columbus, Ohio-based Designer Brands, owner of DSW, did not respond to requests for comment.
Grocery store chains have long experimented with selling apparel. Hy-Vee began selling high school and college sports gear decades ago and plans to continue to do so.
“We’re always looking to see what’s going to work and what isn’t,” Potthoff said. “I think we haven’t been afraid to take chances and see what the consumer wants. We’re open to testing different concepts.”
Spotty supply plagued Joe Fresh partnership, Hy-Vee says
Hy-Vee began selling Joe Fresh merchandise in 2019, with dedicated sections in the chain’s largest stores. But Potthoff said supply chain delays caused by the COVID-19 pandemic resulted in garments imported from overseas arriving out of season.
“The product would arrive to us after the season, in the middle of the season or near the end of the season,” Potthoff said. “We could not get the items when we needed them.”
While the Joe Fresh displays are gone, clearance items remain in some stores, Potthoff said.
The partnership with DSW began in 2020. In April 2023, DSW parent Designer Brands appointed a new CEO who switched that company’s focus to its “core stores” and terminated the partnership, Potthoff said. Hy-Vee began pulling DSW merchandise out of stores last summer.
“We also felt like it was a good time to focus on our core stores as well,” Potthoff said.
Hy-Vee started experimenting with general fashion offerings 26 years ago
Other than sports gear, Hy-Vee first experimented with fashion in March 1998 when it opened men’s clothing boutiques in its West Lakes store at 1725 Jordan Creek Parkway and Valley West store at 1700 Valley West Drive. Smaller versions of Des Moines’ now-defunct Reichardt’s clothing store sold slacks, ties and business casual clothing. But they failed to catch on with shoppers and closed 11 months later.
In 2016 Hy-Vee revisited fashion apparel in a partnership with the upscale British clothing company F&F. Clothing lines were aimed at millennials with children, and most items were priced from $8 to $45. Several stores carried F&F merchandise, including two metro area stores.
Hy-Vee CEO Jeremy Gosch, then a vice president and chief merchandising officer, said in an interview at the time that the offerings catered to busy millennials.
“We are providing this as a convenience for our customers,” Gosch said. “It’s one-stop shopping.”
In 2019 Hy-Vee replaced F&F with Joe Fresh, a more affordable clothing line started in Toronto in 2006 for Canadian grocery chain Loblaw Corp. Today Joe Fresh sells its products in 350 Loblaw Stores and in 1,300 stores owned by Canadian pharmacy chain Shoppers Drug Mart. It also has seven freestanding stores.
“We transitioned our fashion retail partnership to Joe Fresh to offer larger product diversity with Midwestern styles that we believe will be appealing to the Hy-Vee shopper,” Darren Baty, then executive vice president of nonfoods for Hy-Vee, said at the time.
Hy-Vee’s partnership with DSW shoes followed, and DSW Designer Shoe Warehouse stores within a store opened at six Minnesota Hy-Vee locations. The shoe departments expanded to new stores in 2021, and Joe Fresh and DSW Shoe departments were in Hy-Vee’s 93,000-square-foot Grimes store, viewed as a model for the chain’s future locations, when it opened in 2021.
DSW Shoe Departments included footwear for women, men and kids and allowed customers to try on shoes from a variety of athletic, fashion and casual shoe brands. Then Hy-Vee CEO Randy Edeker said in a 2020 news release that the DSW shoe departments would “meet the unique needs of every shopper.”
“We continue to innovate and help today’s consumer by offering them an easier and more convenient way to shop quality footwear for their families,” Edeker said.
Analyst: Clothing sold in supermarkets ‘uninspiring’
Brittain Ladd, a former Amazon executive who is now a Dallas-based grocery, retail and supply chain consultant, said grocery executives want to add clothing because it could represent another revenue stream.
In 2012, Cincinnati-based Kroger, the largest U.S. grocery chain, opened a dedicated apparel section in a store in Mansfield, Ohio. The chain’s apparel offerings gradually expanded to new stores. In 2018 Kroger launched its own fashion line, Dip, designed by Joe Fresh creator Joe Mimran.
But Ladd, who served as a Kroger consultant from 2017 to 2019, said clothes that are sold in grocery stores “are incredibly uninspiring. They’re really not a fashion statement. They’re just basic apparel. These are really basic fashions to appeal to more of a value shopper.”
Hy-Vee can never stock enough merchandise to compete with larger general merchandisers like Walmart or Target, Ladd said. Instead, he said, it should look for products that complement its existing products.
“A store-within-a-store concept for something like an Ulta Beauty makes perfect sense,” Ladd said. “That’s a product that is bought continually by many, many shoppers.”
Sports shops, candy and housewares supplant ex-Joe Fresh sections
Hy-Vee in fact will use the spaces vacated by Joe Fresh and DSW departments to stock things people buy a lot of, Potthoff said. Some of the spaces where Joe Fresh merchandise was sold will be converted into Sports Shops, which sell local high school and college gear, she said. For instance, at Hy-Vee’s stores in the Kansas City area, Kansas City Chiefs merchandise sells “really well,” she said, and “the sports shops with the local schools seem to be doing really well.”
Houseware sections with plates, kitchen utensils and small appliances could get bigger, she added, and large candy aisles with hundreds of choices are a key feature of Hy-Vee’s newest stores.
Hy-Vee strikes up urgent care partnership
Hy-Vee has long promoted health and wellness. Now, Potthoff said, it is increasing its investment in the health care field.
Last week, it announced that it had acquired a 50% stake in Exemplar Care, a primary care and urgent care company with locations in West Des Moines and Ankeny and a third on the way in Bondurant. The company, Hy-Vee’s fifth health care subsidiary, will be renamed Hy-Vee Health Exemplar Care.
The company is Hy-Vee’s biggest foray into direct health care yet, and it marks the first time it has employed physicians, Potthoff said. Previously in some states, clinics operated by other companies or hospitals had clinics within Hy-Vee stores.
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Its other health care subsidiaries are Omaha, Nebraska-based Amber Specialty Pharmacy, Hy-Vee Pharmacy Solutions specialty pharmacy and pharmacy benefits manager Vivid Clear Rx, as well as West Des Moines-based telehealth provider and pharmacy RedBox Rx.
The company also recently opened Hy-Vee Health Infusion Care, which provides infusion therapy at locations in West Des Moines and Chicago. Under the partnership with Exemplar Care, Hy-Vee Chief Medical Officer Daniel Fick will manage the clinics.
Employers will be able to provide employees with unlimited primary and urgent care through monthly memberships or pair memberships with health care plans. Individuals and families also will be able to buy memberships outside of employer-funded health plans, according to a news release.
Hy-Vee views the partnership as a new health care model, Potthoff said. In a news release, Hy-Vee President Aaron Wiese said that by partnering with Exemplar Care, the combined company can reduce the cost of health care for patients and employers and provide “personalized patient care” and price transparency.
Spokesperson: Hy-Vee will continue to seek new partners
The partnerships with Joe Fresh and DSW aren’t the only recent ones that haven’t worked out quite as envisioned. Hy-Vee continues to host locations of Paul, Donnie and Mark Wahlberg’s Wahlburger restaurants at a number of its stores, but it has yet to follow through on a plan announced in 2020 to replace all of its Hy-Vee Market Grilles with Wahlburgers.
Still, Potthoff said that the company never stops looking for new partners.
“I don’t know necessarily if clothing is going to be our top priority at this point,” she said. “But we’re certainly looking for other partnerships and brands that we’re going to be partnering up with.”
Staff writer Marta Mieze of the Springfield News-Leader contributed to this article.
Philip Joens covers retail, real estate and RAGBRAI for the Des Moines Register. He can be reached at 515-284-8184, [email protected] or on Twitter @Philip_Joens.