Walmart Could Stand to Lose At Least $1 Billion This Year


 
 
11:23 07/04/2019

Big-box retailer Walmart WMT , in its efforts to go head to head with Amazon, may be about to lose a lot of money.

According to a new report from Vox's Recode, Walmart stands to lose a lot of money this year.

The report published on Wednesday, says that Walmart is expected to lose a minimum of $1 billion in its e-commerce division and that the company could sell off money-losing units.

“It’s taking longer than I thought it was going to,” McMillion told analysts last October, regarding the e-commerce unit’s profitability, “and I have been surprised at just how many brands there are out there to get signed up. ... Who knew we needed 2,000 of them. I didn’t.”

Vox’s Recode cited multiple sources and claims that the retail giant is struggling to compete with Amazon. Walmart's e-commerce unit is projecting losses of over $1 billion on revenues between $21-22 billion, according to the report.

The report also said Walmart is frustrated with its online shopping site Jet, which the company acquired for $3.3 billion in 2016. Vox said the losses from this site have put CEO Marc Lore's position as leader on the hotseat.

According to Vox, Walmart’s board of directors and CEO, Doug McMillon, want Lore and his online business to cut losses.

Vox also reports that Walmart will look to sell at least one of its three unprofitable fashion brands that was bought under Lore: Bonobos for $310 million, Eloquii for $100 million and Modcloth for less than $50 million.

Despite its struggle to head off with Amazon, Walmart had recently reported strong quarter results with a 43% boost in online sales.

Walmart does not disclose figures publicly and declined to comment on the report.

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This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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