Walmart is riding high. It just beat analyst estimates with its second-quarter earnings, sending its stock up nearly 3% in early trading.
The world’s largest retailer by revenue also raised its projected results for the year despite revealing that those profits would be dented to pay for the $3.3 billion acquisition of e-commerce retailer Jet.com, which was announced last week (Aug. 8). The deal is expected to close in the fourth quarter of the year.
A big part of Walmart’s future rests on its ability to compete against e-commerce players, specifically Amazon. And that’s down to Marc Lore, Jet.com’s founder. It was announced during today’s call that he’s been named president and chief executive of e-commerce at Walmart.
Lore’s new role means he’ll be in charge of both the Jet.com brand, which will continue to operate, and Walmart’s e-commerce functions, in the US. He will report directly to Walmart’s president and chief executive, Doug McMillon. “Marc is a passionate merchant and innovative thinker who will definitely add value to our business. I look forward to working with him,” McMillon told investors on the call.
Lore knows Amazon well, selling his firm Quidsi, which owned Diapers.com and other niche retail sites, to Jeff Bezos’ company for $545 million in 2011. He left Amazon after two years to once again take it on as a competitor. After raising more than $800 million in funding for Jet, but apparently failing to gain the scale he said was required (paywall) to validate its business model, he found a savior in Walmart. Recode reported that he could earn as much as $750 million from the Jet.com sale.
Current Walmart e-commerce chief Neil Ashe will be eased out, just months after being named head of technology. The online media veteran, who ran CNet and CBS Interactive, had been with Walmart for four years, and will be with the company through the end of its fiscal year. Ashe led talks between Walmart and JD.com, which saw the US retailer take a 5% stake in the Chinese e-commerce giant. JD.com also took control of Walmart’s Chinese e-commerce platform as part of the deal, which was announced in June.