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Walmart has purchased Moosejaw for $51 million, a move aimed squarely at besting Amazon in the apparel and sporting goods categories as the battle heats up. Walmart will now have a presence in a category reeling from consolidation and disruption.
Moosejaw is largely an online seller of outdoor gear and activewear, with 10 brick-and-mortar locations.
The past year has seen outdoor retailers flounder. Sports Authority was liquidated in May 2016 after failing to find a buyer. Eastern Mountain Sports filed for bankruptcy last week and Gander Mountain is said to be near a bankruptcy filing, according to several reports.
Cabelas is being acquired by Bass Pro Shops (although the deal is not yet done) and strong athletic brands including Under Armour are having trouble competing.
There's a big hole in the retail landscape here that provides Walmart entry into a critical category: apparel.
Moosejaw carries more 400 apparel brands in addition to outdoor gear. These existing vendor relationships are important to Walmart as it tries to grow the category. Moosejaw also has a reputation as a quirky brand and leader in social media marketing, keys to winning with Millennials and not a real strength for Walmart.
"Apparel and accessories is now the number one category for digital commerce, according to comScore, and we gain the experience of another well-established e-commerce player, this time in the active outdoor category," Walmart said in a statement. "Moosejaw has a large assortment of specialty apparel and accessories, strong industry relationships, and rich product content. Their expertise will help us further enhance our customer experience."
Amazon has been growing its presence in apparel and recently began offering low-priced intimates aimed at taking market share from mass merchants and is poised to become the largest seller of apparel in the U.S.
Apparel is considered one of two linchpin product categories for Amazon, the other is grocery (more on that later).
Walmart completed the purchase of Moosejaw on Feb. 13, two days before the news was made public. Michigan-based Mooesejaw will continue as a standalone company and complementary brand to Walmart's other e-commerce sites, according to the company.
At least for now.
Walmart's efforts to grow e-commerce have exploded in the past year. First, there was the concentrated growth of its online marketplace program that lets other brands and independent retailers sell on Walmart.com. Then last month Walmart bought ShoeBuy. It also operates other standalone brands including Hayneedle, by way of its Jet.com division.
The purchase of Jet.com for more than $3 billion last summer really jump started things. This added not just a new business - online bulk ordering - but new technology, a new customer demographic, and intellectual capital in Marc Lore.
Lore founded Jet.com and hails from Amazon following the acquisition of Quidsi (Diapers.com), which Amazon ultimately purchased. In Lore, Walmart may have finally found the leader it needed to grow digital and he now serves as president and CEO of Walmart U.S. eCommerce.
Admittedly, Walmart had been slow to invest in online commerce. Former CEO Mike Duke called it his biggest regret.
Moosejaw isn't game changing, but it doesn't have to be. With more than 4,500 stores (excluding Sam's Club) and roughly 90% of purchases still made in person, Walmart has some time to grow e-commerce around this new strategy, but not a lot. Not with Amazon innovating and growing at its current pace.
Next up: grocery.
