Walmart to Fold Jet.com Staff Into Operations -- WSJ

By Sarah Nassauer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 13, 2019).

Walmart Inc. is absorbing what remains of Jet.com staff into the rest of its operations, winding down the startup it bought for $3.3 billion three years ago while continuing to run the Jet.com website.

Walmart said it isn't planning to cut jobs and expects existing Jet employees to move to new roles within the retail giant. It declined to say how many employees work at Jet, an online seller of groceries, clothes and electronics, whose main offices are in Hoboken, N.J.

Soon after Walmart bought the startup, Jet executives, including founder Marc Lore took over responsibility for all of Walmart's U.S. e-commerce business. "We're now merging the rest of our Jet teams," including marketing, technology and analytics, Mr. Lore said in a company blog post.

Walmart is eliminating remaining Jet leadership roles. Jet President Simon Belsham will stay through early August to manage the transition, Mr. Lore said.

In recent years, Walmart has narrowed Jet's focus to attracting high-income urban shoppers to differentiate it from Walmart.com, scaling back sales expectations for the startup which launched pitching inexpensive everyday goods to a swath of shoppers. Jet's premium pitch has lured some brands that won't sell directly through Walmart.com, including Nike.

Last year, Jet relaunched as an e-commerce site focused primarily on New York and offering local goods, everyday items and groceries. Jet will focus on serving urban shoppers in areas where Walmart has few or no stores, including New York, said Mr. Lore.

The point of the Jet acquisition was to "infuse Walmart with additional experience and talent in the e-commerce space," said a Walmart spokesman. For example, Jet executives have retooled Walmart e-commerce-fulfillment centers to speed online delivery, he said.

The retailer is working to hire "so many technologists right now. We are trying to leverage the ones we have," across the company, he said.

When Walmart bought Jet in 2016, it was a highflying startup which raised over $500 million from investors. Before the acquisition, Jet predicted it would burn through hundreds of millions of dollars, much of that on marketing to build its shopper base. Mr. Lore won over investors in part because of his success running Diapers.com parent Quidsi Inc., which was sold to Amazon.com Inc. for about $550 million in 2010.

At an investor conference soon after Walmart purchased Jet, the retail giant's chief executive, Doug McMillon, said Walmart.com would be the larger e-commerce brand for the company, but "we want to continue to have the trajectory of Jet continue on as it would have." In the long run, Mr. Lore "will look for synergies between those two brands," Mr. McMillon said at the time.

Write to Sarah Nassauer at [e-mail]

(END) Dow Jones Newswires

June 13, 2019 02:47 ET (06:47 GMT)

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