Wal-Mart buys Shoebuy for $70 million to bolster Jet.com
Wal-Mart Stores Inc. has accessorized its recently acquired online marketplace Jet.com by buying it one of the largest shoe e-retailers in North America.
Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, today announced it bought online shoe and apparel retailer ShoeBuy.com Inc. (No. 101 in the 2016 Top 500) for $70 million. The deal will help expand Jet’s apparel and footwear selection, Wal-Mart writes. The move comes 11 months after Jet acquired home furnishings e-retailer Hayneedle Inc. to boost its indoor and outdoor home furnishings assortment. Wal-Mart acquired Jet.com in a $3.3 billion cash and stock deal in August.
This deal appears to be as much for ShoeBuy’s talent and brand name as its product assortment.
“ShoeBuy CEO Mike Sorabella, his executive team, and ShoeBuy’s 200-plus employees will continue to be based in Boston and will join our e-commerce organization,” Wal-Mart says. Additionally, the ShoeBuy online store will remain operational and maintain its brand name as part of the deal.
ShoeBuy generated an Internet Retailer-estimated $374.2 million in online sales in 2015, up 8% from $346.5 million in 2014, according to Top500Guide.com. In spite of those figures, given the purchase price, experts say they think Shoebuy’s growth may have stagnated.
“In all likelihood they lose a lot of money,” says Stuart Rose, managing director of investment banking firm Tully & Holland. “I’m not sure ShoeBuy is still growing, and I doubt they were profitable.”
According to Top500Guide.com, ShoeBuy launched in 2000 and sells on a number of online marketplaces including Amazon.com Inc., Shop.com, and Google Shopping among others. The company has 3,200 affiliates in its affiliate marketing network, and its audience skews predominantly female (56.12%).