Walmart on Thursday announced the acquisition of the assets of Art.com, which Walmart in a blog post described as the world’s largest online retailer in the art and wall décor category. The company expects to close on the deal early next year; the deal price was not disclosed. A person familiar with the matter told CNBC that Art.com was recently reporting more than $300 million in annual sales.
The company plans to operate Art.com as a standalone e-commerce website while also adding its merchandise to Walmart.com, Jet.com and Hayneedle.com, Anthony Soohoo, SVP and group general manager of home at Walmart U.S. eCommerce, wrote in the company blog post.
According to a separate fact sheet, Walmart said it views wall décor, a $10 billion market, as fundamental to winning the home category. On-demand and customization are also desirable services that will add to Walmart's current offerings.
Right through the end of the year, Walmart has continued its quest to collect digital-first brands to bolster its online business.
Walmart looks at acquisitions in the digital space in two ways: The first focuses on digital companies with category expertise and assortment (think Shoes.com, Moosejaw and most recently Bare Necessities). The second centers on "unique and differentiated" experiential brands (think trendy millennial brands Bonobos, Modcloth and Eloquii).
Art.com fits into the first bucket. The company launched online in 1998 with a plan to personalize the experience of shopping for art, offering "affordable and chic" posters and prints as well as loft art pieces and a custom framing service. "...the addition of [Art.com's] two million curated images — including a growing exclusive assortment – will create an even richer, deeper customer experience across [Walmart's] home category," Soohoo said.
Much has changed at Walmart.com since the company's 2016 acquisition of Jet.com, which brought in U.S. e-commerce chief Marc Lore. Also the founder of Quidsi (sold to Amazon in 2011) and Jet.com, Lore is known for building digital brands. And for Walmart, he's not stopping at just a few. Earlier this year at the ShopTalk retail conference in March, he said the company was "talking to more companies right now than we ever have." He also told investors this fall that the company could have up to 40 brands.
Lore and his team have been careful to shelter some of these brands from the reputation and price point of Walmart.com. Bonobos, for instance, launched on Jet.com this fall, and executives have said other brands like Modcloth and Eloquii could join it as Jet.com transforms into a hub for urban millennial shoppers. Art.com, however, is apparently a brand that Walmart sees fitting across the board with Walmart, Jet and even Hayneedle shoppers.
Home is a major category for Walmart and rivals Target and Amazon. This year Target has doubled down on private labels in the space with brands like Opalhouse and Made By Design. As competition heats up in the space, retailers are chasing new brands that offer differentiation and convenience.
Correction: An earlier version of this story included the wrong data about the size of the home category. The home category is an estimated $250 billion market, while the wall decor category is an estimated $10 billion market.