In a move that executives described as “more evolutionary than revolutionary,” Wal-Mart Stores announced Tuesday that it had bought out the minority stake in Walmart.com held by Accel Partners, the California venture capital firm, The New York Times reported.
Neither company would disclose how much Wal-Mart paid for the stake, which Accel had owned since the online shopping site was introduced early last year. Wal-Mart said it would take a charge of a penny a share for the acquisition, the newspaper reported.
The site is Wal-Mart’s second attempt to build a significant electronic-commerce business. The first version was often criticized as complicated to navigate. Wal-Mart brought in a Gap executive, Jeanne Jackson, to revitalize the site in March 2000, the newspaper reported. Ms. Jackson will remain as president and chief executive of the site.
Its executives also announced they would stop carrying some inexpensive items, like low- priced apparel and cosmetics, because of high shipping costs and emphasize more costly items, such as electronics and jewelry, the newspaper reported.
Kmart, Wal-Mart’s chief rival in the discount business, announced in a similar move yesterday that it would take over a minority stake in Bluelight.com, its Web site, the newspaper reported. Terms were not disclosed.
The decision to make Walmart.com entirely Wal-Mart’s own was made to strengthen the link between the Web site and the nation’s 2,600 Wal-Mart stores, H. Lee Scott Jr., Wal-Mart’s chief executive, said in a telephone interview with The New York Times. “It’s not that things were bad,” he said. “It’s how good things could be.”
Mr. Scott said he expected the site to generate additional business for Wal-Mart’s stores by focusing attention on Wal-Mart shoppers who might not be aware of all the products and services the stores offer. “Eighteen months ago, I would have told you that the No. 1 opportunity was buying over the Internet and delivering direct to customers’ homes,” he told the newspaper. “We had down the line this whole idea of integration and growing store sales with the Internet.”
While Walmart.com will continue to be based in Palo Alto, Calif., it will now be a division of the parent company, reporting to Thomas M. Schoewe, Wal-Mart’s chief financial officer, the newspaper reported. Scott said the renewed focus on store customers would allow the company to serve them better and capture more value for shareholders. Some customers are unaware of services or brands available at Wal-Mart, which could be rectified by communicating with them online.
The site laid off 24 people, or about 10% of its work force, in February, after the holiday shopping season. Scott said he expected no additional layoffs.