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Amazon and Wal-Mart in secret talks

Online retailer Amazon.com is in secret talks with retail giant Wal-Mart to form a strategic alliance, according to a report in the Sunday Times.

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LONDON (Brand Republic) - Online retailer Amazon.com is in secret talks with retail giant Wal-Mart to form a strategic alliance, according to a report in the Sunday Times.

If the talks are successful, a deal could be unveiled within six weeks. The agreement would mean that Amazon would become Wal-Mart’s e-commerce supplier and, in return, Amazon would gain a presence in Wal-Mart’s stores. It would receive a cash injection and a percentage of sales. Neither company has commented on the report.

Wal-Mart has so far failed to create a strong online presence and last week laid off 10% of staff at Walmart.com, a joint venture with venture capital firm Accel Partners. The site will now focus on selling higher-priced items such as jewellery, rather than cheap clothes and cosmetics.

Amazon’s online sales management system would boost Wal-Mart’s online offering, while Amazon would benefit from Wal-Mart’s buying and merchandising power and know-how.

Amazon’s chief executive Jeff Bezos wants to develop Amazon into a multi-category online retailer but, so far, Amazon’s attempts to expand from online book-selling into other areas, such as toys and electronic goods, has left the company with huge losses.

The company’s share price has dropped 83% over the past year, and its market value has plunged from $36bn (£24.5bn) to £3.6bn (2.45bn) in two years.

Amazon shares closed on Friday at $10 (£6.79), down 44 cents on the day.

www.amazon.com

www.walmart.com



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