GNX and WWRE to merge as single Internet exchange for retail industry

More than five years after they each launched with promises of revolutionizing the retail industry, GlobalNetXchange and the WorldWide Retail Exchange will merge in an effort to bring Internet-based connections faster and more cheaply to retailers and suppliers, the organizations said today.

“We now have a common vision to build a single technology platform to connect retailers and manufacturers faster and more efficiently,” GNX CEO Joe Laughlin, who will serve as CEO of the yet-to-be-named combined company, said in a conference call today.

Kara Romanow, analyst with AMR Research Inc., says the merger should be good for the retail industry by helping to push ahead data-sharing standards and trading partner collaboration, leading to an improvement in the way retailers and suppliers deliver products to stores in a timely manner. “When you combine these two entities, it’s a who’s who in the retail industry that will drive data standards and collaboration processes and positively impact the supply chain of the whole retail industry,” she says.

The new company will serve more than 8,000 companies, including equity partners such as Federated Department Stores Inc., Best Buy Co. Inc., Safeway Inc., Sears Holdings Corp., Tesco plc, and METRO Group.

Christopher Sellers, CEO of WWRE, will serve as the new company’s executive chairman. The merger, which has been approved by the boards of both organizations, is expected to close by the end of June. GNX and WWRE have each agreed to contribute $10 million to the new entity, which will have 250 employees and major offices in Chicago and Alexandria, VA.

The combined GNX and WWRE will pare redundant offerings in areas such as supply chain collaboration services, but continue to focus on four core areas of sourcing (including auctions and e-procurement), supply chain collaboration, supplier performance management, and private label product development.

One area in which the new company remains relatively weak is data synchronization services, Romanow says. “The merger is a good thing overall, but the data synchronization issue is not resolved,” she says, adding that the new company could benefit from an alliance with Transora, a Chicago-based trading exchange formed by manufacturers that is also used by retailers.

Although Laughlin and Sellers have not commented on potential cooperation with Transora, which is located within walking distance of GNX/WWRE’s new Chicago offices, they say they’re interested in developing more data synchronization services. In addition, Transora’s former president and COO Ken Fleming recently joined GNX as vice president of supply chain services. “Data synchronization and other collaboration services are areas we clearly want to develop,” Laughlin says.

Transora would be open to any cooperation with GNX/WWRE that would add value to its members, a spokesman says.