Costco Wholesale Corporation has acquired delivery and logistics company Innovel Solutions for $1 billion. The company was previously a subsidiary of Transform Holdco LLC the operator of Sears and Kmart stores. Innovel has provided services for Costco with respect to delivery of major appliances, televisions, fitness equipment and other large items. The CEO of Costco, Craig Jelinek stated, “We have had a great relationship with Innovel and share a philosophy of taking care of our members.” He added, “We believe the acquisition will allow us to grow our E-commerce sales of big and bulky items at a faster rate.”
Innovel operates 1,000 delivery vehicles and makes four million deliveries annually through eleven distribution and fulfillment centers. Innovel will continue to serve Sears and third party customers but the primary focus will be the 786 Costco warehouse clubs of which 547 are located in the U.S., 100 in Canada and 39 in Mexico.
The acquisition allows Costco to compete more effectively with Walmart, Amazon and Target and emphasizes the importance of an omnichannel business model.