|
Retailers in B2B alliance
|
 |
March 31, 2000: 7:00 p.m. ET
K-Mart, Target among 11 companies to form Web-based Worldwide exchange
|
NEW YORK (CNNfn) - K-Mart, CVS and Target are among a group of 11 retailers jointly forming a new Web-based business-to-business exchange for the food, general merchandise and drugstore sectors, the companies announced Friday.
The group of traditional bricks-and-mortar retailers expects the Worldwide Retail Exchange to become operational in mid-2000. The companies said the exchange would facilitate and simplify trading between retailers and more than 100,000 suppliers, partners and distributors.
Other retailers involved in the partnership are Safeway Inc., Albertson's, French retailers Auchan and Casino, British retailers Kingfisher, Marks & Spencer and Tesco, and Royal Ahold of The Netherlands.
 Together, the group operates more than 30,000 stores and posted combined sales of more than $300 billion last year.
The companies said they expect an initial investment in the new company of about $100 million in the first few years. The exchange would eventually become an independently managed company.
The founding members are currently searching for a technology partner to help run the site.
Retailers will be able to buy and auction goods and supplies directly from vendors on the exchange, enabling the companies to significantly cut costs, officials said. The companies did not release specific savings estimates Friday.
The founding companies will each initially have a 5 percent stake in the new company, but that will change as other retailers are invited to join. Cora, a French-Belgian retailer, has already expressed interest in joining the exchange, officials said.
"It's obviously the in-vogue thing to do at this stage of the game," said R.T. Quinn, a Paine Webber retail analyst. "It's a good move, sure. I don't think it's a major commitment either way at this stage, but it's definitely the way the supply chain is going."
Kurt Barnard, president of Barnard's Retail Trend Report, agreed.
"It seems to be that a lot of these large chains are gravitating toward the advantages inherent in joint buying and obtaining lower prices and saving a lot of money in the process," Barnard said. "...It is very likely to be a powerful weapon in the retailer's arsenal to reduce the cost of buying and operating. And given the world of the Internet, which makes possible these alliances, it has to be recognized that consumers will find it so much easier these days to compare prices because all they have to do is click away."
The announcement comes in the wake of a growing tide of other retailers that have announced B2B alliances in the past few months. Recently, Sears and Carrefour, Europe's largest retailer, announced a partnership with Oracle to start up a Web-based B2B exchange with 50,000 suppliers. Supermarket company Kroger also recently announced a B2B venture. 
|
|
|
|
|
|
K - Mart
Target
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
