Costco Wholesale Corporation Acquisition to Further Last Mile Capacity
Costco Wholesale Corporation announced it has completed the acquisition of Innovel Solutions, a leading provider of third-party end-to-end logistics solutions with nationwide capabilities. Innovel was subsidiary of Transform Holdco, which operated Sears and Kmart stores. The purchase price of $1 billion was funded from Costco’s existing cash balance.
Innovel has for decades provided Sears, and more recently, third parties with ‘final mile’ delivery, complete installation and white glove capabilities for ‘big and bulky’ products across the US and Puerto Rico. Innovel’s network offers coverage to nearly 90 percent of the US and Puerto Rico. Products served through Innovel include: major appliances, furniture, mattresses, televisions, grills, patio, fitness equipment and wine cellars. Innovel consistently ranks in the top quartile of customer satisfaction scores. Some of the other attributes that are unique to Innovel include it:
- employs more than 1,500 people
- operates 11 distribution/fulfillment centers
- houses more than 100 final-mile cross-dock centers with more than 15 million square feet of warehouse space
- operates dedicated call centers
Costco has been a customer of Innovel since 2015. According to Craig Jelinek, Costco’s CEO, “We have had a great relationship with Innovel and share a philosophy of taking care of our members. We believe the acquisition will allow us to grow our e-commerce sales of ‘big and bulky’ items at a faster rate.” Under Costco’s ownership, Innovel will continue to serve Sears and other existing third-party customers.