Walmart to Spend Billions to Buy Jet.com

Print Friendly, PDF & Email
Jet
Photo: Courtesy of Jet.com

Walmart has taken aim at Amazon once again.

The retail giant announced Monday that it will acquire e-commerce start-up Jet.com for $3 billion in cash, a portion of which will be paid over time, in addition to $300 million of Walmart shares.

The acquisition, which is expected to close later this year, will position Walmart for expanded e-commerce growth, in addition to revamping its app, site and stores to better serve its consumer demographic.

“We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time,” said Walmart CEO Doug McMillon. “Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”

This acquisition follows Walmart’s recent attempts to complete with Amazon in the digital marketplace. About a year ago, Walmart decided to transform itself into a seamless shopping experience for consumers by introducing Shipping Pass, a service which offers unlimited, free three-day shipping for only $50 annually, less expensive than Amazon’s Prime program. Walmart has also held its own midsummer sales to offset Amazon’s annual Prime Day.

“As we believe ‘catching’ Amazon online is an unrealistic goal for any brick-and-mortar retailer, Walmart now has a definite leg-up on its competitors in the very important race to be number two online,” said Moody’s analyst Charlie O’Shea. “Being the site next clicked following Amazon among online shoppers is very important for brick-and-mortar retailers as they morph online, and Walmart is aggressively positioning itself to be that site.”

Walmart’s acquisition of Jet will allow it to become a multi-dimensional brand for many consumers, including millennials. Jet currently reaches $1 billion in run-rate Gross Merchandise Value (GMV), has a growing customer base with more than 400,000 new shoppers monthly, technology that offers consumers savings without heavy logistics costs and more than 2,400 brand partners for shoppers.

“The combination of Walmart’s retail expertise, purchasing scale, sourcing capabilities, distribution footprint, and digital assets—together with the team, technology and business we have built here at Jet will allow us to deliver more value to customers,” said Jet CEO Mark Lore.

Jet and Walmart will remain separate brands and work together to establish technology solutions that will help consumers save money in today’s e-commerce sector.


Recent News

Financial Roundup: Abercrombie Comps up on Hollister; Gap Rides Athleta, Old Navy to Sales Gains

Abercrombie & Fitch continues to rely on Hollister gains, while positioning the Abercrombie brand for similar success. Gap sales up on Athleta, Old Navy performance.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

“Uncertainty” Over Trump Policies Makes Frenemies of Importers, Domestic Producers

The domestic textile industry and apparel importers have often been on opposite sides of U.S. trade issues, but in today’s political climate they seem to have found some common ground.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more

Lord & Taylor Teaming With Walmart, a Desperate Last Gasp or a Brilliant Move Toward the Future?

While everyone’s been focused on the "retail apocalypse," the real story to emerge from 2017 might be the strange bedfellows that have emerged as everyone tries to plot a course forward. The recent partnership between Walmart and Lord & Taylor is the latest to get people talking.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more