Walmart plans a restructure after billion losses

Posted by IEC International on July 4th, 2019

Walmart the multinational retail corporation has recently said that the company expects to lose over billion USD this year in its e-commerce business division. And with that in mind the company are currently working on creating a plan to sell off money losing units, as the company are faced with the challenge of trying to compete with Amazon. Multiple sources close to the company have claimed that Walmart’s current efforts to challenge the Giant Amazon are falling short of where they should be, which has led to internal strains on the company, and are forcing their hand to curb their losses in its e-commerce division. As it stands this part of Walmart is projecting losses of over Billion on revenues of Billion.

According to a recent publication, Walmart is facing troubles with Jet, an online shopping retail site that the company acquired in 2016 for .3 Billion USD. With the mounting losses the company are facing, CEO Marc Lore is certainly sat in the hot seat against the Walmart’s board of directors, with fears of lack of leadership. The board at Walmart and CEO Doug McMillon have said that they want Lore and his team at Jet to cut losses quickly. In addition Walmart heads are not happy with the way that Jet has received praise and credit in the media for the growth that Walmart has seen.

As well as improving the internal machine at Walmart, the company are also looking to relieve themselves of at least one of their three fashion brands, which came alongside the acquisition of Jet. The three business’ being Bonobos, Eloquii, and Modcloth are all showing their inability to turn a profit, and Walmart are planning to tackle this head on.
Walmart for a long time have been seen as a retail powerhouse, and recently saw the share price of the company rally to new 52 week highs, topping out near 2 USD. The recent positive move by the company’s stock, came after strong quarter results, which investors saw online sales surge over 43%.
Walmart has been pushing hard to offer the most comprehensive online retail selection, however in a battle with trillion dollar Amazon, the company has seen a lesser effect than predicted. To compare both companies, Walmart currently has 20 warehouses to aid in their online retail service, while Amazon are currently able to make use of over 110. Walmart’s next quarter results could be make or break to company, unless significant changes are made to their business model.

Graham Mitchell – IEC International