Here’s Why Walmart Is Acquiring ShoeBuy?
Recently WalMart (NYSE:WMT) announced that its subsidiary Jet.com had acquired online footwear, clothing and accessories retailer, ShoeBuy for approximately $70 million. In August last year, Walmart had acquired Jet.com for more than $ 3billion with a goal to augment its e-commerce business. This acquisition allowed Walmart to tap into Jet’s innovative leadership to build its own e-commerce segment, which was struggling to grow. The acquisition of ShoeBuy is an indication that Walmart is looking to strengthen Jet.com and expand its consumer offerings. ShoeBuy’s large assortment of products, strong industry relationships and rich content is likely to enhance Jet.com’s consumer experience. Jet.com has maintained its distinct brand and website since it was acquired by Walmart. We believe the acquisition of ShoeBuy will ensure that the company continues to grow and attracts users with a wider assortment of products. This should enable to company to compete better with Amazon which is reportedly working on building its own apparel line.
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Bolstering Jet.com’s Position In The Online Apparel Market
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Walmart’s acquisition of Jet.com was aimed at giving a boost to its e-commerce initiatives and building a competitive edge against online retail giant Amazon. Reports suggest that Amazon is pushing its apparel business and might even be interested in acquiring bankrupt company American Apparel. Walmart appears to be ensuring that it is better prepared to face Amazon in the online apparel segment by bolstering Jet.com’s position. ShoeBuy.com was founded in the year 1999 as one of the first companies to sell shoes online. It carries more than 800 brands and over a million products including footwear, clothing and accessories. This association with brands will help Jet.com enhance its product portfolio and attract more customers. In addition, this acquisition gives ShoeBuy’s suppliers the ability to sell on Jet.com, increasing the products available on its platform. As Walmart looks to strengthen its online channel through Jet.com, providing an enriching experience to Jet.com’s users is critical for this goal. While the company struggled to grow e-commerce revenues in the first few months of 2016, it offered its largest Cyber Week assortment during the holiday season of 2016. This is part of the company’s e-commerce strategy to trigger growth by offering consumers wider choices to choose products on its online channel. We believe the acquisition of ShoeBuy.com fits well in this strategy and should aid in the growth of Jet.com’s revenues over the long term.
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