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ShoeBuy, the Boston-based e-commerce site that has been selling loafers, sneakers, and stilettos online since 1999, has been acquired by Jet.com and its parent company Walmart Stores Inc. for $70 million. The deal, which was announced on Thursday, closed on Dec. 30.
The acquisition is part of Walmart’s aggressive strategy to go all-in with online shopping. Realizing that its role as the world’s largest retailer hinged largely on its brick-and-mortar stores, Walmart has begun shift its focus to e-commerce, acquiring the online marketplace Jet.com in August for $3.3 billion.
That deal was largely seen as a way to hedge the fallout that big box stores are experiencing as shoppers continue seek out Internet deals. It’s also a way for the Walmart brand, which has largely been associated with discount offerings, to begin to expand its reach to new customers through its hipper Jet.com platform.
ShoeBuy’s 200 staffers will continue to operate out of its Boston offices in Downtown Crossing and ship from its Woburn distribution center, said the company’s chief executive, Mike Sorabella. The site will run independently of the Jet.com and Walmart.com, though shoe brands that sell on ShoeBuy will have the option of expanding their reach onto the other sites.
Jet’s founder, Marc Lore, an e-commerce veteran behind Diapers.com, had designed the company to compete directly with Amazon.com, undercutting its prices by giving bulk discounts. Jet gave Walmart an instant foothold in the e-commerce. And it now seems ShoeBuy will help better establish that foothold in a more literal sense.
ShoeBuy was an early entrant to online shopping, launching in Boston the same year that its more prominent competitor, Zappos.com, got its start. In 2006, ShoeBuy was acquired by Barry Diller’s InterActiveCorp (figures were not disclosed at the time, but it the sale was rumored to be north of $60 million). Zappos eventually emerged at the dominate player in the category and was acquired by Amazon.com in 2009 for $1.2 billion.
Today, ShoeBuy carries over 800 brands, sells more than a million items on its site, and receives over 3 million unique visitors on a monthly basis, according to the company.
While those numbers may fall far short of Zappos’ traffic, the acquisition gives Walmart an edge in the shoe category, said Keith Anderson, a vice president at e-commerce consulting company Profitero. The company, he said, has been feeling a “great urgency” from investors to find a path to growth, and the fastest, easiest way to do so — and to compete with Amazon in the process — is through acquisition.
The purchase “reflects the growing urgency to adapt through partnerships or acquisitions,” Anderson said. “The pace of change is greater than the pace some of these number one and two retailers can evolve.”’
The move is an important one for Walmart and Jet, said Walmart spokesman Ravi Jariwala. Apparel and accessories are now the top category for online commerce, outpacing computer hardware for the first time last year. “A lot of customers are already going to ShoeBuy,” he said, “and in the space of e-commerce it’s critical to be where your customers already are.”
Through the acquisition, Sorabella said, ShoeBuy is better able to continue to innovate and more closely align with a team of fast moving e-commerce players. “I think we found the absolutely best fit in this acquisition,” he said.Janelle Nanos can be reached at firstname.lastname@example.org. Follow her on Twitter @janellenanos.