Why Moosejaw no longer fits in Walmart’s portfolio

“We admire what Moosejaw has accomplished over the past 30 years as a leader in the outdoor industry and look forward to the opportunity to share insights and learn from one another.” Death Spaletto, president of Public Lands and senior vice president of Dick’s Sporting Goods, said in a statement. “We believe there is potential to grow the Moosejaw business and provide its millions of loyal customers with compelling experiences and an expanded range of products.”

Walmart bought Moosejaw in 2017 for $51 million, around the same time it was buying up bonobos and Modcloth in a massive acquisition spree. However, many of those acquisitions fell apart over the next few years as Walmart changed its retail strategy and channels. Now, as has happened to others in its portfolio, Walmart is cutting ties with Moosejaw to focus on other growth horizons.

Shortly before buying Moosejaw, Walmart was heavily involved in e-commerce. In 2016, it bought Jet.com for $3.3 billion to better compete with Amazon. Upon closing of the transaction, Jet.com founder and CEO Marc Lore joined Walmart to oversee e-commerce operations in the US span a few years. It also took over Shoes.com, which Jet.com had bought from IAC for $70 million.

However, over time, Walmart began to refine its portfolio. Just two years after the acquisition, Modcloth sold it to Go Global Retail. In 2020, Walmart discontinued Jet.com. That same year, it sold Shoes.com to CriticalPoint Capital, a private equity firm that owns JackRabbit and Olympia Sports.

When it purchased Moosejaw, Walmart championed the company’s “wide array of specialty apparel and accessories, strong industry relationships, and rich product content.” It also added that “their expertise will help us continue to improve our customer experience” and called Moosejaw “another established e-commerce player, this time in the active outdoor category.”

While Walmart may have had big ambitions with Moosejaw, “there’s typically an issue in the industry in terms of integrating … standalone direct-to-consumer or digital-native vertical brands, consumer brands into larger companies,” Balaji Santhanam, Associate Partner at Infosys Consulting said. Walmart was about “bringing in all these different brands, but ultimately figuring out who their customer base was … and the brands themselves probably aren’t performing at their best,” he told Modern Retail.

Moosejaw is also culturally very different from Walmart, experts pointed out. Moosejaw mainly sells clothing and equipment for sports such as hiking, running, cycling and climbing. While it sells sporting goods, Walmart focuses more on activities like hunting and fishing. The other categories like groceries, household and electronics are very popular among consumers.

At Moosejaw, “this isn’t a core competency of Walmart,” Barry Thomas, Kantar’s senior global thought leader, told Modern Retail. “I mean, that kind of merchandising, that kind of categories, that’s just not what they do.”

As part of its acquisition spree, Walmart had hoped to upgrade its overall branding. Bonobos and modcloth tend to cater to more affluent buyers, and Moosejaw is also more high-end, selling brands like The North Face, Patagonia, and Fjällräven.

While Moosejaw and Walmart fill each other’s gaps, they ultimately fill very different roles in the market. Moosejaw “has strong ties to an independent outdoor personality,” said Karen Kelso, vice president of retail insights at Kantar’s Mass and Club Consulting Division. “They also carry brands and products that are on the higher end. So you’re going to have a lineup that’s a little bit like REI in that regard.” In terms of its audience, Walmart feels “a little more rural, a little more middle-income, and a little more outdoor, focused on very specific activities.” , she told Modern Retail.

Like Moosejaw, Dick’s Sporting Goods is more focused on experiential retail. “I would say they are among the more innovative on the market right now,” Santhanam said. To date, Dick’s has built three House of Sport locations with climbing walls, batting cages and putting greens. Moosejaw, meanwhile, organizes events in local communities, hosts an online “Gear Kitchen,” and has a digital card game called Moose Draw.

In 2017, Walmart focused on buying more retail brands. Today, it’s focused on omnichannel and better-margin services, like healthcare and finance. In 2019, Walmart launched Walmart Health to provide primary and emergency care services to local customers. The company acquired telemedicine provider MeMD in 2021, partnered with UnitedHealth Group in 2022, and is on track to build 16 new health centers in Florida by fall 2023. Last December, media outlets reported that Walmart-backed fintech startup One would launch a buy-now, pay-later service. Walmart also offers a credit card through Capital One and operates an online money transfer business.

“For Walmart to really grow, they need to go beyond traditional retail,” Thomas said. Healthcare and financial services, he explained, are helping Walmart “get where [they] has to go.” “If you’re a retailer and you’re only making a profit from selling physical products, the future is going to be very bleak,” he added. “A lot of these retailers are at the end of their rope. They’re just not going to be able to do that with anyone like Amazon and Alibaba to compete… [Walmart] must continue to build an ecosystem that is far more diversified than just selling products.”

While Walmart could have waited before selling Moosejaw, experts told Modern Retail the timing of the deal made sense. “Right now is a difficult time for mergers and acquisitions,” Thomas said. Global mergers and acquisitions reportedly fell 37% year-to-date in December. “Few buyers are buying assets right now,” he said. “So you want to take what you can get.”

Many outdoor brands also saw sales surge in 2020 and 2021 as people sought to spend time away from home. “Every sporting goods focused business that I know of has had an exceptionally good year and the last two years,” said Kelso. After that, “they kind of stopped… Now is a good time to sell, cash out any profits you’ve made during that time.”