US retail giant Walmart is taking steps to reinvigorate its fashion offer in a move that retail watchers say could add at least £100 million to its sales.

The retailer will next week showcase its recently licensed children’s and teenage fashion brands at a major fashion event in San Francisco – Fashion on the Square. It is believed to be the first time Walmart will put on show its new licensed brands, which include jeans range Lei from Jones Apparel and Californian surfwear brand Op from Iconix.

It is also tapping into fashion trends through exclusive deals such as a tie-in with popular US rapper Master P and his son, singer Romeo.

Walmart has struggled to compete effectively in the fashion arena, producing low-price ranges without the fashionability or quality offered by rivals such as Target. Two years ago, it unsuccessfully attempted to launch a higher-priced fashion range, promoting its lines at New York Fashion Week and in a 116-page feature in Vogue.

At the start of this year, Walmart restructured its app-arel arm, closing its product development and sourcing divisions and organising it around two hubs for brand merchandising and buying. It is also in the process of rolling out Asda’s George clothing brand globally.

MHE Retail chairman Edward Whitefield said: “Walmart has tried to hit the lowest possible lead-in price points, but the fashion and quality has been low.”

He added that the move will better position Walmart to compete with fellow discount retailer Target. “Target is a fantastic example of mass-market, low-price fashion,” he said.

“Walmart’s apparel offer is still a relatively small part of its US$300 billion business, so even if it manages to grow this by a few percentage points, it could quickly add at least£100 million to its sales.”

A Walmart spokeswoman said the retailer was “working hard to bring families great prices on apparel brands they want”.