Walmart acquires menswear online retailer Bonobos
Walmart is buying menswear online seller Bonobos for $310 million, intensifying retail competition with Amazon on the same day its rival announced its own blockbuster deal.
The move was immediately overshadowed by Amazon’s seismic acquisition of Whole Foods, sending shares of Walmart and many other retailers plunging.
The Bonobos purchase reflects Walmart’s bid to grow its customer base into niche areas where its stores are not as strong. The company said it would offer Bonobos brands through its recently-acquired Jet.com division and “possibly other Walmart brands in a variety of countries over time.” Bonobos has 35 physical stores.
“Bonobos is a brand with loyal customers, premium price points and expertise in a differentiated niche,” said Stephen Beck, managing partner of management consultancy cg42. “It attracts exactly the kind of buyer who does not frequent Walmart today.”
In recent months, Walmart has begun to offer free two-day shipping for a minimum purchase of $35 and sought to leverage its network of locations by offering a discount on thousands of onlineonly products if customers are willing to pick them up.
At the same time, it has been enhancing its online offering by buying other sites. In August, it acquired the online marketplace, Jet, for $3 billion. And in December, Jet bought online footwear seller ShoeBuy for roughly $70 million. Since then, Walmart scooped up Moosejaw, an online outdoor gear and clothing retailer and ModCloth, an online seller of women’s clothing and accessories.
There is concern Bonobos and Walmart aren’t tailor made for one another. Bonobos CEO and founder Andy Dunn, who is joining Walmart’s digital team, acknowledges he was “incredibly anxious” Bonobos customers would be turned off by the tie-up with Walmart. However, since news of the pending deal first leaked roughly two months ago Dunn says “we’ve seen ... no dropoffs to our growth rate” in acquiring new customers.