Banking

JPMorgan Launches Disruptive Commerce Group

With a growing number of traditional retailers boosting their digital investments, JPMorgan has announced news of the creation of a disruptive commerce group, a joint venture between its consumer and retail and internet teams.

Reuters has seen the internal memo that was sent to employees on Thursday, and a company spokeswoman has confirmed the formation of the group, which will be led by internet banker Chris Grose and retail banker Jill Woodworth.

The memo was signed by Erik Oken, global head of Consumer and Retail Investment Banking, and Madhu Namburi, head of Technology Investment Banking in North America.

The decision by JPMorgan to form the group comes as U.S. retail companies spent $17 billion in 2016 acquiring eCommerce companies, an increase of 63 percent from $10.4 billion in 2012. This includes recent deals such as Walmart’s acquisitions of Jet.com, ModCloth and Bonobos, as well as PetSmart’s acquisition of online pet store Chewy, and Target’s investment in eCommerce mattress company Casper.

This merger of retail and technology companies has made establishing traditional sector lines more complicated for bankers. For example, Amazon’s recent acquisition of Whole Foods has moved the online retailer closer in category to a traditional brick-and-mortar business. The online retail giant also opened two brick-and-mortar stores last month — the first in San Jose, California and the second in Bellevue, Washington.

And for a company like Peloton, which sells an internet-connected indoor fitness bikes, it’s not clear whether it would be best served by consumer or internet bankers.

While these companies are already covered by both the consumer and retail and internet teams at JPMorgan, the creation of the new team formalizes this process. There was no explanation as to how a revenue split might work between the two groups.

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