Jason del Rey wrote an article for Recode titled Inside the conflict at Walmart that’s threatening its high-stakes race with Amazon.
Walmart acquired “a fast-growing but money-sucking online shopping site called Jet.com” for $3.3 billion. Jet founder and CEO Marc Lore became Walmart’s head of e-commerce. “The company is projecting losses of more than $1 billion for its US e-commerce division this year, on revenue of between $21 billion and $22 billion.”
“Amazon now accounts for nearly 38% of online retail in the US, up from 32% in 2016, according to an estimate from eMarketer. Walmart, on the other hand, accounts for just 4.7%, up from 2.6% three years ago.”
“The decision to sell ModCloth appears to stem from a realization that Walmart is going to be unable to turn around the company’s economics in the near term. The company was not performing well before the acquisition, and the business has not improved dramatically since.”
“Entering this fiscal year, Lore was still owed $291 million in cash from the acquisition over the next three years, as well as shares of Walmart stock that’s valued at nearly $300 million today.”