WMT Walmart Inc

By Sarah Nassauer 

Walmart Inc. is shutting down its Jetblack personal-shopping service and laying off most of its roughly 350 staffers after the retailer abandoned plans to find investors for the unprofitable operation.

The New York City-based unit, which offers fast product delivery on orders placed through text message, will stop delivery services on Feb. 21, a Walmart spokesman said. The Wall Street Journal earlier reported that Walmart was planning to end its Jetblack service and restructure the organization.

Some members of Jetblack's technology and design team will become part of Walmart's wider customer organization, continuing to work out of New York, the spokesman said. Walmart will lay off 293 of Jetblack's employees, he said.

Last year, Walmart worked to spin off the money-losing unit, which had less than a thousand customers as of last year. The retailer discussed an investment with several potential partners including Microsoft Corp., and venture-capital firms including New Enterprise Associates, the Journal reported at the time.

Those talks have ended, people familiar with the situation said.

Jetblack Chief Executive Jenny Fleiss left last year, succeeded by Nate Faust, Walmart senior vice president of e-commerce logistics, who had worked previously for Jet.com, the e-commerce startup Walmart bought in 2016.

Jetblack was launched publicly in 2018 as part of an innovation arm at Walmart dubbed Store No. 8, where the company intends to build technology and business units that aren't immediately profitable but could be integrated into the larger company in the future.

Walmart executives have talked about Jetblack as a potential avenue of growth and research, not as a profit center. As of last summer, Jetblack was losing about $15,000 per member annually, the Journal reported.

Jetblack members pay $600 a year to order anything except fresh food by text message. Their orders go to a Jetblack office where agents sitting at computers field customer inquiries, from diaper reorders to requests for suggested yoga attire. Couriers fetch the items so they can be hand delivered, usually the same day.

Walmart aimed to use Jetblack's human agents to train an artificial-intelligence system that someday would power an automated personal-shopping service, preparing Walmart for a time when web-browser search bars disappear and more shopping is done through voice-activated devices, Ms. Fleiss said last year.

Walmart, which reports quarterly earnings next week on Tuesday, has worked to stem losses from its smaller e-commerce units over the past year, selling units or cutting staff in those businesses. Walmart folded most of the remaining Jet.com staff into the rest of its operations last year and laid of workers at Bonobos, the men's apparel retailer it owns.

Last month Walmart closed the Omaha corporate headquarters of Hayneedle, the online furniture site it inherited along with Jet.com. "We are integrating the Hayneedle business" within Walmart but keeping the website open for business, a spokeswoman said earlier this month.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

February 13, 2020 12:00 ET (17:00 GMT)

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