Big-box retailer announced this week that it is winding down Jet.com, its acquisition of $3.3 billion that it made just four years ago.
Walmart acquired the e-commerce site back in 2016 and CEO Doug McMillon credited the acquisition for “jump-starting the progress we have made the last few years” with e-commerce.
According to McMillon, Walmart gained more than a name. “While the brand name may still be used in the future, our resources, people and financials have been dominated by the Walmart brand because it has so much traction,” he said. “We’re seeing the Walmart brand resonate regardless of income, geography or age.
McMillon said the company does not “anticipate a significant accounting charge due to this decision.” He said most employees had been moved to roles tied to the Walmart brand. Jet.com’s founder, Marc Lore, leads Walmart’s e-commerce business in the U.S.
Moody’s retail analyst Charlie O’Shea said on CNBC’s “Squawk Box” this week that the coronavirus pandemic has pushed more customers to try new retailers, get comfortable picking out groceries online and discover the convenience of curbside pickup.
“You’ll see online growing much more rapidly than we thought it would prior to this,” he said. “You’re going to see a lot of the brick and mortar retailers demonstrate to consumers that ‘Hey, it’s not just an Amazon world here online. We’re here as well.’”
Disclaimer: We have no position in Walmart Inc. (NYSE: WMT) and have not been compensated for this article.