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Walmart offloads DTC, FullBeauty in buying mode

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Illustration: Sarah Grillo/Axios

Walmart is exiting its portfolio of DTC businesses, a process underscored by its latest deal to sell the plus-sized brand Eloquii to FullBeauty.

Why it matters: Walmart has a history of buying, then shutting down or selling digital businesses, extracting e-commerce knowledge and talent to build its own online presence in the process.

Details: While terms of the transaction were not disclosed, FullBeauty financed the deal with cash, not debt, FullBeauty's CEO Jim Fogarty tells Axios.

  • Fogarty says FullBeauty paid a $203 million dividend to its shareholders following a recap financing completed last August.

What's next: Eloquii will become the anchor tenant in a new online mall to cater to a younger demographic.

  • Eloquii will be joined by brands SwimSuitsForAll and June+Vie in that new digital mall, the plus-sized conglomerate said.
  • The acquirer's existing digital mall will continue to be home to WomanWithin, Roaman’s, Catherines, Jessica London, Ellos, KingSize, Brylane Home and OneStopPlus.
  • FullBeauty continues to see opportunities to build out the business with buys of plus-sized, DTC-adjacent businesses, Fogarty says.

Of note: A strategic sale, additional dividend recaps, and an IPO are all exit options, but not in the near future, Fogarty says.

Catch up fast: Fullbeauty has been looking for deals in the plus-size category for the last year.

  • The company noted that the plus-sized apparel sector generates about $81 billion in sales a year.
  • FullBeauty's largest shareholders since emerging from Chapter 11 bankruptcy in 2019 include Goldman Sachs and Oaktree Capital Management.

Separately: Walmart went on an acquisition spree beginning in 2016 with Jet.com followed by Bonobos, ModCloth, Moosejaw and Eloquii, among several others, in the following years.

  • While the discounter proceeded to shut down Jet.com and sold off most of its DTC holdings, those buys helped inform the building of its online business.

Zoom in: Walmart still owns home goods e-commerce site Hayneedle, a spokesperson told Axios.

  • "As good stewards of our brands, we’re always open to the right opportunities but there are no current plans to sell Hayneedle," the spokesperson added.

Be smart: Walmart remains acquisitive, focusing now on retail tech companies — most recently Mexican electronic payments company Trafalgar.

Zoom in: Walmart still owns home goods e-commerce site Hayneedle, a spokesperson told Axios.

  • "As good stewards of our brands, we’re always open to the right opportunities but there are no current plans to sell Hayneedle," the spokesperson added.

Be smart: Walmart remains acquisitive, focusing now on retail tech companies — most recently Mexican electronic payments company Trafalgar.

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