Wal-Mart Snaps Up Another Online Retailer For $51 Million

Wal-Mart is buying Moosejaw a Madison Heights-based company that specializes in outdoor recreation apparel and gear and is known for its quirky, cutting-edge marketingin a bid to strengthen the global retail juggernaut's online offerings for $51 million in cash, the companies announced today.

Walmart said it will continue to operate the Moosejaw website and 10 stores as a standalone site and separate retail outlets. The employees will remain in Michigan.

"From the customer's perspective they really won't see much change in Moosejaw.com or our stores," Eoin Comerford, Moosejaw's CEO, told the Free Press. "We are going to continue to be an outdoor specialty retailer of premium brands. You are going to have the same Moosejaw voice and the same Moosejaw Madness is going to be very prevalent."

What will change, Comerford said, is that the company intends to "amplify our marketing presence." Still, balancing what will be different, so that the two companies can benefit from the deal, and what will remain the same, so that the acquisition does not harm the Moosejaw brand or erode its customer base, is the central challenge that the both companies will be wrestling with going forward.

Over the long term, Wal-Mart, based in Bentonville, Ark., hopes to leverage the privately held Michigan retailer's online sales knowledge and marketing of apparel and accessories and aims to open opportunities for Moosejaw suppliers to expand their reach on Walmart sites. But, the company does not plan to sell Moosejaw-branded merchandise in Wal-Mart stores.

"You won't go into Wal-Mart and see Moosejaw T-shirts," Comerford said. "The customers are quite different." Wal-Mart purchased Moosejaw from private equity partners Parallel Investment Partners and W Capital Partners. Enhancing e-commerce

Wal-Mart which has more than 11,000 stores has been focusing on growing online sales, which has included a buying spree of online outlets in the past year to boost its e-commerce portfolio and competing with retailers such as Amazon. Wal-Mart is expected to report its fourth-quarter earnings next Tuesday.

Last year, Walmart bought Jet, a Hoboken, N.J., start-up, that seeks to offer online shoppers items that few retailers offer for about $3 billion in cash and $300 million in Wal-Mart shares. Wal-Mart said the two company websites Walmart.com and Jet.com would operate as separate brands, but would leverage technology and talent. Jet offered more urban and millennial customers.

In January, Wal-Mart announced it also was acquiring ShoeBuy.com for $70 million, a move aimed at enhancing its footwear sales. The same month, Wal-Mart CEO Doug McMillon highlighted a new e-commerce strategy for the company that is built around a vision of a retail future in which customers are ordering products from mobile devices and expect to have it delivered or pick up the same day, or in a few hours or minutes.

"It’s up to retailers to adapt to these changes – and in some areas even lead the way or they’ll fall behind and disappear," he said at the time. Comerford's new duties include overseeing Walmart's outdoor e-commerce, including what it sells on Walmart.com and Jet.com.

Ken Nisch chairman of JGA, a Southfield consulting firm estimated that 80% to 85% of Moosjaw's sales are online. "Moosejaw is considered to be a pioneer, early adapter of social marketing," he said. "It's not a huge company, which makes it interesting from Wal-Mart's standpoint. They are not doing it for incremental sales. It has to totally be related to expertise, the culture approach to social commerce. The addition of Moosejaw's sales to Wal-Mart is not even a pinprick."

Moreover, he added, the demographics of the customers of the two retailers are quite different: Wal-Mart customers tend to be more working-class mainstream while Moosejaw's are more affluent and tend to be younger. As a general comparison, he said, Wal-Mart's shoppers are hunters, while Moosejaw's are hikers. Quirky company culture

Founded in 1992 by long-time friends Robert Wolfe and David Jaffe, Moosejaw now has about 350 employees.

Wolfe was a University of Michigan graduate, and Jaff, a University of Wisconsin grad. The duo originally planned to become wilderness guides and take people on camping trips, but instead, they decided that there was more money to be made in selling camping equipment so they opened Moosejaw Mountaineering and Backcountry Travel in Keego Harbor.

At the time they started the company, Wolfe was just 21, and his retail experience was mostly hawking T-shirts at U-M football and basketball games. In their first year, the business exceeded their expectatons. By 2007, however, the founders had sold their interest in the company to private equity.

But even after its founders exited, Moosejaw held on to the fun-loving culture that touted its stores as places to get dating advice and play hand games such as rock-paper-scissors. It did not change the tongue-and-cheek self-description on its website, which called the company "the greatest place in the world to work according to the owner's mom."

It also kept offering its zany promotions, known as Moosejaw Madness, that, among other edgy concepts had included a digital mobile app that let customers see what Moosejaw catalog models were wearing under their clothes when they hovered over the images, and a "break-up service" for couples too timid to end their own relationships.

In 2012, Moosejaw opened a temporary retail outlet in downtown Detroit for the Christmas shopping season. But, whether Moosejaw ultimately will be able to maintain its distinctive voice and culture under Wal-Mart is unclear. The goal, Comerford said, is to take what we can from Wal-Mart, and use it to amplify Moosejaw, "but not have it become a mini Wal-Mart."