Walmart Inc. (NYSE:WMT) has been in the spotlight today after it announced that CBL Properties had purchased Monroeville Mall for cash in an amount of $34 millions.
Although the retailer hasn’t revealed any plans specific to the mall, it’s plausible to assume that this acquisition is part its larger strategy to adapt to changing consumer trends and reimagine commercial spaces.
WMT’s opening was slightly positive following Wednesday’s announcement.
Why did Walmart purchase Monroeville Mall
Walmart can diversify their revenue streams by owning a shopping mall.
Cypress Equities, a real estate developer, is helping the multinational explore various options for this site. These include residential units, offices, restaurants, entertainment spaces and office space.
This broad transformation will allow WMT to generate revenue from multiple sources and reduce its dependence on only retail sales.
The acquisition may also help Walmart tap into the trend for experiential retail.
WMT can attract customers by offering unique services and experiences. It is especially important when consumers are looking for convenience, and want to combine online and off-line shopping.
At the time of writing, the shares have risen 12% for the entire year.
Monroeville Mall can drive traffic to WMT
The purchase of Monroeville Mall could also align with Walmart’s sustainability goals, as the company may choose to reuse existing structures in order to create a community-oriented and walkable space.
This will enable the retailer contribute to development of more sustainable and environmentally-friendly urban areas.
The acquisition is consistent with WMT’s commitment to create vibrant and multifaceted centers that provide more than shopping.
The company hopes to attract a wider audience, improve the shopping experience, and create a community by transforming its site into a destination with mixed uses.
Walmart’s stock yields 0.82%, making it a very attractive investment at the current price.
What is the current value of Walmart stocks?
Walmart’s purchase of Monroeville Mall for $34 million from CBL Properties could also show its willingness to experiment with new formats, in an effort to keep malls relevant into the 21 st Century.
This news comes a few weeks before WMT’s financial results are due to be released for its fourth quarter. The consensus is that it will earn 64 cents for each share, compared to 60 cents for every share last year.
Wall Street analysts are unanimous in their “buy” ratings of Walmart’s stock ahead of the earnings report. Price target is $113, which indicates a potential 12% increase from the current level.
WMT’s shares are up a staggering 80% over the past 12 months.
How does Monroeville’s mall fit in WMT’s overall strategy? The post appeared first on ICD
