Partnerships / Acquisitions

Walmart’s Latest eCommerce Acquisition To Help Boost Jet.com

Walmart Acquires ModCloth

Walmart announced plans to purchase 15-year-old online women’s retailer ModCloth on behalf of subsidiary Jet.com, two people familiar with the deal told Recode.

Though Recode did not confirm the purchase price of the deal, industry sources estimated that ModCloth may have received as much as $80 million.

The deal marks the fourth acquisition for Jet.com since March 2016. The moves have been aimed at helping to bolster the product offerings of the online megastore.

In January, Walmart dropped $70 million on the purchase of online shoe and apparel retailer ShoeBuy.com. While Walmart seemed to be excited about the addition to its growing number of acquisitions, some didn’t see the move as very strategic.

“In all likelihood, they [will] lose a lot of money,” Stuart Rose, managing director of investment banking firm Tully & Holland, told Internet Retailer. “I’m not sure ShoeBuy is still growing, and I doubt they were profitable.”

According to Internet Retailer, ShoeBuy generated an estimated $374.2 million in online sales in 2015, which was up 8 percent from $346.5 million in 2014. But despite growth in years past, industry experts believe the company’s growth has since stagnated.

Just last month, Walmart continued its eCommerce shopping spree with the purchase of fast-growing outdoor gear retailer Moosejaw for $51 million, which took place just weeks after the ShoeBuy purchase.

Fortune reported that while Moosejaw is a relatively small retailer — it has only 10 stores and a popular website — the attraction for Walmart is the company’s growth in clothing and accessories, the top online retail category. And while it’s been a tough time for outdoor gear stores (Eastern Mountain Sports recently filed for bankruptcy protection, and there are rumors that Gander Mountain might do the same), Moosejaw’s steady growth made it a standout buy for Walmart.

Much like the deal with ShoeBuy, Walmart will allow Moosejaw to continue to operate its website and stores as a standalone brand and remain based in its Madison Heights, Mich., location. However, there will be integration of the various sites for things like shipping rates, credit card fees and transaction processing fees.

Walmart’s online growth has re-accelerated in the last two quarters after a slow preceding eight.

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