While Walmart seems to be excited about the addition to its growing number of acquisitions, some don’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 months ago, Walmart acquired Jet.com in a cash-and-stock deal, attempting to give Amazon a run for its money.
The deal brought Walmart a new, more digitally savvy customer base and expanded the U.S.’ largest retailer’s already formidable eCommerce presence.
Walmart officially announced the closing in an Instagram post back on Sept. 19.
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“Jet brings a unique approach and technology that puts customers in control of their experience, helping them find additional ways to save,” Walmart President and CEO Doug McMillon said in a statement. “Jet will help Walmart expand the ways we serve our current customers and reach new customers online.”
Walmart bought Jet for $3 billion in cash and an additional $300 million in Walmart shares. Although Walmart intends to keep Jet as a separate brand, the two companies will now commingle all their technology, talent and resources, which Walmart is banking will make it an even bigger player in the eCommerce marketplace.
