AUSTRALIA’S biggest retailer JCPENNEY has revealed it is taking over the entire online shopping space of Australia’s largest retailers in the biggest online-shopping shake-up in decades.
Online shopping giant JCP has agreed to buy Wal-Marts, CVS, Boots, JB Hi-Fi and the major discount stores from Australian retail giant Walmart.
Key points:The deal is the biggest acquisition of online retail in Australia in years, as JCP will sell out of its online stores and buy retailers’ entire e-commerce storesThe deal, worth more than $3 billion, will see JCP acquire a vast majority of its retail operations in Australia, including online, and acquire the vast majority (more than 95 per cent) of its business in the USThe company said it planned to spend more than US$20 billion to open a shopping centre in Sydney, as well as more than 20 million square feet of space in the state, with a number of new online stores to be built in Australia.JCP said it expected to spend between US$30 billion and US$40 billion over the next 10 years, covering more than 80 per cent of the Australian retail market.
The online-only Wal-mart will be sold as an independent retail outlet, with the retail chain’s online stores largely left out of the deal.
Walmart Australia has been a dominant force in Australia’s retail industry, and is currently the country’s biggest online retailer.
Its dominance is due in part to its dominance in online retail, and its strong presence in the United States.
Wal-Mart Australia chief executive officer Michael Bock told reporters in Sydney that the combined company would take “significant steps to position our company for a long-term success”.
“In our view, we believe this is the right opportunity to position ourselves for the future, to take our competitive advantage and to become a leader in the world of online shopping,” he said.
“We are very confident that we will become a global player in the online shopping market, and this is a good time to do it.”‘
A very exciting opportunity’JCP has long struggled to maintain its dominance on the world’s biggest shopping websites, with Amazon, Target and WalMart dominating the online market.
However, it has recently been investing heavily in its own e-retail business, with plans to launch a new online store by the end of next year.
Mr Bock said the deal would allow JCP to continue to offer its e-store, which will be the first major e-shop in Australia and the first in the UK, with online sales expected to surpass that of Amazon and Target by the time the store opens.
“I think it’s a very exciting moment for the company, and I think it has the potential to be a very significant player in this space for a number years to come,” he told the Australian Financial Review.
“It’s an opportunity for JCP, but also for us as an Australian retailer, to have more control over our own store, to create our own vision of what our store is going to look like, and to be able to provide that for our customers.”
He said the combined store would be similar to those operated by Walmart, where it would operate online stores as well.
“The online store will be like the store at Wal-Man in the sense that it’s an online shop, but it will be completely offline, with all our e-stores, so you’ll be able do online shopping in your office, and it will all be on our own site,” he added.
Mr JCP chief executive Michael Bick said the sale of the online-focused stores would provide “great flexibility” for retailers to continue competing with Amazon and other online competitors.
“Walmart and Amazon are the two biggest online retailers in Australia,” he explained.
“They control 95 per [percent] of the market.
But they don’t have as much control of our online store, which is what we’ll be building on.”
Mr Bick also revealed that the company was seeking to increase its global presence, with new online retail stores expected to open in New York, Shanghai, Shanghai and Hong Kong.
“These are big markets for us,” he noted.
“But we also want to expand into Europe and other markets.”