The company said Wednesday that it will buy apparel manufacturer Womanshoes for $4.2 million, the biggest deal in its history and the biggest acquisition in apparel.
Womenshoes was founded in 1872 and had been in business since 1884.
It has over 25,000 employees in the United States, Australia, New Zealand, and Canada.
Walmart said it plans to use the money to grow its retail and consumer services businesses and expand into more categories of clothing.
Walmart has struggled in the apparel market, particularly after Amazon bought Whole Foods.
But Womaniys was a pioneer in making women’s clothing in the 19th century, said Jeff Liedtke, an analyst at BGC Partners.
“It was very, very important in the American women’s wardrobe and for a long time, it was the go-to brand,” LiedTke said.
Walmart also said it will invest $1 billion in a factory in India that will produce its own clothes.
Walmart plans to invest $2 billion in new factories in China and Mexico, and to expand into new categories such as apparel, retail and wholesale, it said.
Womshoes, founded in 1865, has been known for its handmade garments and has been part of Walmart’s family since 1885.
It had a turnover of $1 million in 2016, according to its website.
Walmart, the nation’s largest private-sector employer, said it would pay $8 billion in dividends in 2019, including $2.9 billion to shareholders, to keep the dividend payment rate as low as possible.
In its earnings call, Walmart said that the deal is expected to be completed by the end of 2019.
“Our goal is to be able to operate at a profit,” Chief Financial Officer Bill Dolan said on the call.
“The key to profitability is to operate with a competitive advantage.”
The deal will make Womains annual revenue $3.9 million, and it will generate $3 billion in cash.
Walmart had expected Womanos annual revenue of $7 billion, but it said Wednesday’s deal will bring the company’s total annual revenue to $13.7 billion.
Womans head of global business development, Karen Henneman, said the deal was not contingent on Walmart making any new investments.
Amazon has been a big force in the clothing business, as it has spent billions of dollars on expanding its retail operations in recent years.
The company has been able to do this because it has been flexible and is able to take advantage of changing demand and supply chains, said Mark Zandi, an economist at Moody’s Analytics.
Amazon has also built warehouses for its online retail stores, which it has leased to its own suppliers.
The company is also looking to expand its apparel business, including into women’s wear.
Walmart is the second-largest clothing retailer in the world, behind Gap Inc. Walmart’s purchase of Womands apparel is one of the biggest acquisitions in its long history.
Walmart was the second largest apparel company after Gap, according the company.
Walmart is a leading apparel retailer and a leader in its field of health care, home goods, home furnishings and consumer goods, as well as in technology.
Last year, the company made $7.9 trillion in profits, according an analysis by the Wall Street Group.
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