Walmart to acquire online men's clothing retailer Bonobos

Geronimo Vena
Giugno 17, 2017

Walmart's latest e-commerce acquisition will be a takeover of menswear site Bonobos for $310 million in cash, a deal that's been rumored for months, the brick-and-mortar retail giant announced Friday. Following the closing, Andy Dunn, founder and CEO of Bonobos will report to Marc Lore, president and CEO of Walmart U.S. ecommerce, and oversee the company's collection of digitally-native vertical brands. But the new numbers that Wal-Mart is delivering in the digital space aren't just thanks to Jet or its widely heralded pricing algorithm.

Now it's adding Bonobos, which started out in 2007 selling men's trousers online but has added shirts and other clothing lines and opened many "Guideshop" locations, where customers can go try on Bonobos apparel before ordering online.

The firm has since expanded to a current total of 37 offline Guideshop stores. "They have access to brands, buying teams ... they have merchants and software engineers that might not move to Bentonville or Silicon Valley", he said.

Bonobos started online but like many similar startups, has also opened some showrooms. It continued lower until it hit a daily nadir at 6.8 percent.

Recode had reported in April that Wal-Mart was in advanced discussions to buy Bonobos and that the company had $100 million to $150 million in revenue. It makes a nice collection with other brands that Jet has acquired recently, which include women's clothing retailer ModCloth and outdoors retailer MooseJaw.

Lore has since stated that they intend to pursue acquisitions to build out the company's online offerings and develop in-house expertise to better market to a younger, online audience. Amazon dominates online purchases, while Walmart owns traditional retail so hard that it made more money past year than Apple and Exxon, the second- and third-biggest US companies, combined. So, I don't know, maybe the news is healthy, because it is bringing Bonobos to a larger stage.

According to Lore, Bonobos has created not only a great line of products but also offers an outstanding "customer experience". The acquisition by Wal-Mart will help Bonobos expand its business.

The news coincided with Amazon's own acquisition of Whole Foods (WFM) for $13.7 billion Friday.

I'm in agreement with Wal-Mart's approach but wonder if it is moving fast enough to create economies of scale, which is Amazon's strength. If you would like to discuss another topic, look for a relevant article. I am not receiving compensation for it (other than from Seeking Alpha).

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