Executive Summary

• We believe Walmart—after acquiring a capable e-commerce team from Jet.com—is trying to build an online retail network with Jet.com in the center and other smaller e-commerce brands and retailers at the peripheral.
• Walmart recently acquired ModCloth, an online retailer of indie and vintage-inspired women’s clothing, for a price of between $50 million and $75 million, according TechCrunch. ModCloth gives Walmart a strong female millennial consumer base.
• The recent acquisitions of ModCloth, ShoeBuy and Moosejaw aim to increase the assortment of product offerings and attract a wider customer base.
• We believe the upside potential from these acquisitions remains moderate in the short term, but should become more positive over the medium to long term. The strategy is less about acquiring businesses that can be accretive to Walmart’s bottom line and more about broadening its online offerings and making its online site more competitive and a better experience for consumers.
• We expect Walmart to continue to make further acquisitions, similar to those already made.