Walmart Drops $70M On Shoebuy

Walmart just found another way to bolster Jet.com — with the purchase of online shoe and apparel retailer ShoeBuy.com for $70 million. The deal is expected to help expand the apparel and footwear offerings of its recently acquired online marketplace Jet.com.

“ShoeBuy CEO Mike Sorabella, his executive team and ShoeBuy’s 200-plus employees will continue to be based in Boston and will join our eCommerce organization,” Walmart said. Additionally, the ShoeBuy online store will remain operational and maintain its brand name as part of the deal.

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.

“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.