Walmart's Latest Acquisition Could Add $300 Million to Its Annual Sales

Walmart (NYSE: WMT) recently agreed to buy online art and wall decor retailer for an undisclosed sum. The all-cash deal, which is expected to close in early 2019, could add more than $300 million to Walmart's annual revenue, according to CNBC.

Walmart calls, which was founded in 1998, the "world's largest online retailer" of art and wall decor. Its portfolio will add 2 million curated images -- in posters, prints, and other art pieces -- to Walmart's home goods business. allows customers to customize its products online, most of which are printed on-demand after an order is placed -- so it doesn't house large inventories of posters and prints. It also provides custom mounting and framing services with each order. will continue operating as a stand-alone site, but its products will also be offered on,, and

Another brick in its e-commerce wall

Over the past two years, Walmart acquired,, Moosejaw, Modcloth, Bonobos, Parcel, Flipkart, Cornershop, Eloquii, and Bare Necessities to strengthen its e-commerce ecosystem and widen its moat against (NASDAQ: AMZN).

Its $3 billion takeover of U.S. e-commerce site and $16 billion buyout of Indian e-commerce site Flipkart were the two largest acquisitions. The other purchases -- which reportedly cost between $50 million to $300 million -- expanded its portfolio into specialty markets like shoes, menswear, lingerie, and outdoor products.

Those moves could all help Walmart counter Amazon's expansion into private-label products -- which now include apparel, shoes, toys, baby products, food, and even mattresses. The retailer could also counter Amazon's expansion into brick-and-mortar stores with its acquisition of Whole Foods, its introduction of Amazon Go stores, and a new 4-star store in New York that features home goods, toys, and other products. targets consumers who purchase art and wall decor on Amazon -- which currently offers mainly products in specific sizes (mostly from third-party sellers) instead of fully customizable products. Walmart believes that the U.S. art and wall decor market could be worth $10 billion in annual sales, so bundling's products with other home goods across its other e-commerce sites could shore up its defenses against Amazon. Walmart can also leverage its massive network of over 3,500 Supercenters across the U.S. to quickly expand's reach.

$300 million is still a drop in the pond

Annual revenue of $300 million may sound like a big figure, but it would represent only about 0.06% of Walmart's estimated revenue for fiscal 2020, which starts on Feb. 1, 2019. However, $300 million is still higher than the revenue generated by many of Walmart's past purchases. Modcloth, Bonobos, and Moosejaw all generated about $100 million in revenue before being acquired.

However, all those acquisitions form part of Walmart's larger defense against Amazon, and the retailer's latest earnings report -- which revealed a 43% year-over-year jump in U.S. e-commerce revenue -- indicates that those efforts are paying off. Walmart's e-commerce revenue accounts for a single-digit percentage of its top line, but it indicates that it won't be rendered obsolete by Amazon anytime soon.

However, investors should note that these acquisitions (particularly and Flipkart) -- along with rising wages, integration costs, price competition, and tariffs -- could all throttle Walmart's near-term earnings growth. The company hasn't revealed much information about the profitability of newer e-commerce assets like That's why analysts expect Walmart's earnings to slip 3% next year, even as its revenue rises 3%.

The bottom line

Walmart's takeover of isn't surprising, since it expands its e-commerce ecosystem and complements the recent redesign of -- which highlights the expansion of its home goods category. The purchase probably won't move the needle for Walmart on its own, but it's definitely another step in the right direction.

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