US retail giant Walmart is to wind-down the operations of its Jet.com brand just four years after its purchase.
In its first-quarter trading update, the retailer said it will discontinue the e-commerce site, which Walmart said was “critical to accelerating our omni strategy”.
The company bought Jet.com in a US$3bn cash deal in August 2016 in a move to grow its online business at a faster rate and reach more millennial customers. It has since bought other digital businesses such as menswear firm Bonobos.
On a call with analysts yesterday (19 May), CEO Doug McMillon credited the acquisition with “jump-starting the progress we have made the last few years”. He pointed to Walmart’s curbside pickup, home delivery, and expansion of categories such as apparel and home decor.
“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 most Jet.com employees had been assigned other Walmart brand roles, and he doesn’t anticipate a significant accounting charge due to the wind down.
In its first quarter, the retailer saw US e-commerce sales grow 74%. Group earnings, meanwhile, increased 3.9% on last year to $3.99bn, while revenues were up 8.6% to US$134.6bn.