Kmart, Wal-Mart bring Internet units in-house
By Brian Carroll -- Furniture Today, September 3, 2001
NEW YORK — Kmart and Wal-Mart have joined a trend in e-commerce by bringing their Internet retailing operations in-house. Both say they hope to better leverage their bricks-and-clicks strengths.
Operating online as BlueLight.com, Kmart brought the separate unit under control of its parent company. Wal-Mart did the same with Walmart.com, previously a separate company. Both discounters initially set up separate online selling operations to be more nimble competitors and to better attract investment money.
Kmart has agreed to buy the 40% of BlueLight.com it did not already own. Wal-Mart said it has bought out the venture capital firm that had taken a stake in Walmart.com at its launch in January 2000.
The moves are a recognition that the wedding of clicks to bricks outweighs the potential advantages — mainly big IPO payouts — of operating stand-alone Internet divisions. Other retailers such as Staples have been reeling in the dot-coms they had previously sought to spin off into lucrative initial public offerings.
Wal-Mart President and Chief Executive Officer Lee Scott said, "It is clear to us that the next evolution for Walmart.com is to establish an even deeper integration between our online business and the operations of our stores."
Almost two years old, BlueLight.com was owned by Kmart, Softbank and Martha Stewart Living Omnimedia. Martha Stewart, along with Kathy Ireland, is one of Kmart's signature lines.
Terms of Kmart's and Wal-Mart's buyback deals were not disclosed.
