Walmart has purchased the online footwear retailer ShoeBuy for approximately $70 million in a move aimed at helping its subsidiary Jet.com offer shoppers a larger selection of shoes and sneakers.
Jet co-founder Marc Lore said ShoeBuy’s online catalogue of more than one million items from 800 footwear and clothing brands will speed up Jet.com’s penetration of those categories by several years. In 2015, clothing and accessories became the largest online retail category for the first time, and Walmart and Jet rival Amazon is leading the way.
The ShoeBuy purchase follows the same acquisition strategy Jet employed when it paid a reported $90 million to buy the online home furnishings retailer Hayneedle to help boost its assortment in that area.
In an interview with Recode, Lore said it’s “a fair assumption” that Jet and Walmart will pursue more of these types of acquisitions, most likely “in the categories where they are long-tail, high-margin products and harder-to-crack brands,” said Lore, who runs both Jet and Walmart.com following Walmart’s $3 billion acquisition of his startup.
ShoeBuy was founded in 1999 as one of the first online sellers of footwear along with Zappos, but never grew into a household name. The Boston-based company was venture-backed before being sold in 2006 to Barry Diller’s IAC, which owned it up until this deal.
Lore declined to comment on ShoeBuy’s revenue or profitability, other than saying the company “had been pretty self-sufficient and hadn’t needed a lot of capital.”
Internet Retailer estimated ShoeBuy brought in $315 million in revenue in 2013. If its revenue number is still that high or higher, a $70 million purchase price could indicate that sales are stagnant or the company is unprofitable — or both.
ShoeBuy will continue to exist, and its CEO, Mike Sorabella, will continue to oversee the company’s 200-plus employees out of Boston.
But Jet will also court brands that sell on ShoeBuy to sell on Jet.com and potentially Walmart.com later down the line. Lore expressed confidence that Walmart’s relationships, size and pricing power on things like shipping rates will help improve ShoeBuy’s own business.
“It can be worth a lot more than $70 million in the future,” he said.
This article originally appeared on Recode.net.