Amazon has overtaken Walmart as the top apparel retailer in the U.S. partly because of the pandemic-linked increase in online buying, according to Wells Fargo analysts cited by Business Insider Thursday.
The analysts said Amazon had 20% to 25% more apparel sales last year than Walmart, and the online discounter will exceed $45 billion in apparel and footwear sales this year.
Amazon now has 11% to 12% market share of all apparel sold in the U.S. and 34% to 35% share of all apparel sold online, Wells Fargo analysts Tom Nikic and Ike Boruchow wrote in a note.
As falling foot traffic in shopping malls dealt a heavy blow on sales at stores like JCPenney and Macy's, Amazon grew its accessory and clothing business.
For years, Wall Street analysts have projected Amazon to outperform Walmart to become the No. 1 retailer in the U.S. apparel market. The company found early success by launching a broad array of basics, but it has since expanded its fashion business.
As COVID-19 forced millions of American consumers to order online, for both basic and non-essential items, Amazon's total sales hit a record $386 billion last year, up 38% from the previous year.
Hatem Dhiab, managing partner at Gerber Kawasaki Wealth & Investment Management, says Amazon is one of the winners from the ongoing global health crisis.
"As we all are more comfortable buying everything online, even apparel, so they will continue to gain market share as these habits will stay even post-COVID," Forbes quoted Dhiab as saying.
Amazon estimates sales of between $100 billion and $106 billion, up 33% to 40% from the previous year's figures. Walmart, on the other hand, said its apparel sales fared poorly in the fourth quarter as a result of "weaker demand," hurting the company's operating margins.
