Dive Brief:
- Walmart has been talking with potential buyers for its JetBlack concierge service, according to a Bloomberg report that cited anonymous sources. A Walmart spokesperson declined Retail Dive's request for comment.
- Inquiries into the unit included interest in partnership, spinoff or outright sale of JetBlack, according to Bloomberg, which noted that Walmart did not initiate the talks.
- The news service also reported that Jet co-founder Nate Faust could get a leadership position at JetBlack going forward. But talks around the unit are still preliminary and may not lead to a deal.
Dive Insight:
It's been a little over a year since Walmart officially announced its JetBlack service with much fanfare. As the story goes, Walmart's head of e-commerce, Marc Lore, who founded Jet, pitched the program to Rent the Runway co-founder Jenny Fleiss when trying to lure her away from the apparel rental service.
The text-based service aims to bring high-level convenience to well-to-do urban dwellers. Lore told employees and shareholders this year that JetBlack members engage weekly and spend an average of $1,500 a month.
The service uses both artificial intelligence and human know-how to help shoppers. Today it offers curated recommendations, courier delivery pick-up for returns, free gift-wrapping and other services.
That Walmart may be open to unloading JetBlack so soon after launching it is a testament to the growing pains Walmart's online business is going through. This year it folded Jet into its broader e-commerce operations, nixing a lead executive role for the unit in the process. The move came about three years after Walmart bought Jet.com for $3.3 billion — the largest e-commerce acquisition at the time — and brought in Lore in the process.
Lore said in a June blog post that Jet had an evolving role at Walmart, mainly to serve urban areas like New York where the mass merchant has minimal presence. Still, the move marked a departure for past strategy around Jet and was a signal that Walmart.com was the company's main focus.
Shortly after Walmart picked up Jet, it bought trendy apparel brands — including ModCloth and Bonobos, among others — with the plan of selling those brands only on Jet (not Walmart.com). But Recode reported this summer that the company is facing a $1 billion loss on its e-commerce operations, and could sell ModCloth and other recently acquired brands. That about-face comes as pressure builds for Lore and frustration mounts over the division's money-losing initiatives, according to Recode.
A sale of JetBlack could further such loss-cutting that Walmart is reportedly considering. It would also free the retailer to focus on its core brick-and-mortar and online business, which has done booming business this year, leading much of the retail world.
Small Business
via https://www.aiupnow.com
Ben Unglesbee, Khareem Sudlow
