Marc Lore, who joined Walmart in September 2016 as CEO of Walmart U.S. e-Commerce with the retail giant’s $3.3 billion acquisition of Jet.com, is leaving his post at the end of the month. He will stay on as a strategic advisor to Walmart through September to protect a lucrative pay contract that included a $150 million stock allocation in the final year.
Walmart made the announcement Friday (Jan. 15) in a regulatory filing with the U.S. Securities and Exchange Commission. Walmart said Lore’s team will report to Walmart U.S. CEO John Furner. Walmart in 2020 combined its store and e-commerce teams, possibly setting the stage for Lore’s departure. But the retailer said it was an effort to stem losses and continue its transformation into a true omnichannel business.
Walmart President and CEO Doug McMillon credits Lore with the pace of Walmart’s e-commerce growth and its ability to keep up with demand and the ongoing pandemic. Lore is also credited with leading the redesign of Walmart’s website and mobile app, transforming the supply chain to allow for two-day and same-day delivery and growing the assortment of goods sold online using first party and expanded marketplace relationships.
“Marc’s leadership helped ensure we were positioned to respond to the demand driven by the pandemic this year,” McMillon said. “All of this progress is the result of good work from a lot of people, of course, but Marc’s expertise and aggressiveness have been game changing. We have learned a lot from him. I have personally learned a lot from him.”
Lore, in a LinkedIn post, said he will take some time off and plans to work with several startups.
“Reflecting on the past few years with so much pride – Walmart changed my life and the work we did together will keep changing the lives of customers for years to come. It has been an honor to be a part of the Walmart family and I look forward to providing advice and ideas in the future,” Lore said in the post.
Ben Bienvenu, an equity analyst with Stephens Inc., said Marc Lore is well known in the e-commerce space, founding various e-commerce and internet companies such as Jet.com, Quidsi and The Pit, and he has been instrumental in Walmart’s adaptation to what is now a very competitive position in e-commerce.
“While he will be missed, and it is disappointing to see Marc Lore announce his decision to leave the company, we feel that this move was inevitable, and more of a when, not if situation. That said, we expect a seamless transition given the critical mass and momentum that the business has today,” Bienvenu said in an investor note on Friday.
Stephens reiterated its overweight (buy) recommendation for Walmart shares with a target price of $170.
Scott Benedict, director for retail studies at Texas A&M University, said Lore’s departure is not a surprise. He said there are more questions than answers for how Walmart will proceed in a post-Lore era. He said the stage was set for Lore to leave given the unwinding of Jet.com, the reversal in acquisition strategies that kept Lore busy for a couple of years and merging of e-commerce and brick-and-mortar marketing and merchandising teams that before had largely operated in silos.
“We don’t know who Walmart will eventually appoint to lead the e-commerce team, it does not seem feasible for John Furner, who is very busy with 4,700 stores to also oversee the online segment long-term. It’s also interesting to look at where Walmart is going in its efforts to serve customers how and where they want. The Walmart+ subscription that further connects the online and in-store growth, the new fintech startup the retailer announced and the ongoing health investments all seem to point to Walmart’s mission to serve customers anytime, anywhere with most all their immediate needs,” Benedict said.
He said Walmart’s mission is different than its need to grow and improve e-commerce when Lore arrived. He said Walmart learned much from Lore and he is responsible for solidifying the retailer as a formidable competitor in e-commerce to Amazon. Benedict believes Walmart will now shift more investments toward services and keep trying to blend the retail businesses into an immersible shopping experience through enhanced technology.
Walmart has made no secret about the need to stem losses in the e-commerce segment. Well ahead of the pandemic, McMillon said it is taking longer than originally thought. The pandemic has changed everything in the world and retail is no different.
Benedict said Walmart offices in Hoboken, N.J., don’t make sense if Lore is gone. But it’s likely they keep the office as a remote working location for tech employees and Walmart Media Group access that needs to be near New York City. He said Lore will have an extensive non-compete with Walmart, but it will be interesting to see where he applies his talents.
Over the past year, Lore has liquidated his massive Walmart share holdings, selling $74.195 million through September of 2020. He signed a new stock trading plan in September that called for the liquidation of 710,000 shares of his Walmart holdings between December 2020 and April 2022. At the time of his resignation, Lore’s Walmart holdings totaled 1,272,729 shares valued at $185.6 million.