Los Angeles Times

Retailer buying online clothier

Wal-Mart plans to acquire Bonobos for $310 million as it tries to outpace Amazon.

- Associated press

Wal-Mart Stores Inc. is buying online men’s clothing retailer Bonobos for $310 million in cash, showing that its appetite for hip clothing brands shows no sign of abating as it looks for ways to gain on Amazon.com Inc.

It’s a sign of the aggressive direction Wal-Mart is taking since buying Jet.com last year and keeping that company’s founder as head of its online division. WalMart has since bought clothing seller ModCloth, footwear retailer ShoeBuy.com and outdoor gear seller Moosejaw as it focuses on brands appealing to younger shoppers.

Bonobos, which started out selling pants online, caters to male shoppers looking for help putting together a wardrobe.

Targeting Bonobos is a good move for Wal-Mart as it tries to compete with Amazon, which has been expanding its clothing business, Internet consultant Sucharita Mulpuru-Kodal said.

“If you roll up enough of these online start-ups, you create a meaningful share” of business, she said. She also said Wal-Mart can learn from millennial customers.

While Wal-Mart keeps trying to compete against Amazon by pushing harder into the online space, Amazon announced a bold move into bricks-and-mortar stores Friday by saying it would buy Whole Foods Market in a deal valued at about $13.7 billion.

The Bonobos deal, announced Friday, is expected to close at the end of the second quarter or the beginning of the third quarter this year. Bonobos Chief Executive and founder Andy Dunn will report to Marc Lore, the CEO of Wal-Mart’s U.S. online operations.

“Adding innovators like Andy will continue to help us shape the future of WalMart,” Lore said. “They’ve created an amazing product and customer experience, and that will not change.”

Bonobos sought to reassure customers that the deal wouldn’t hurt its brand. “Everything from our product quality, to design, to our customer service will stay the same,” it said on Twitter.

Bonobos started online but, like many similar startups, has also opened some showrooms. Customers at the Guideshops can try on pants, shirts, ties, belts and jackets with suggestion­s from stylists. They can order online at the store and have their clothes delivered to their homes or offices.

The company operates more than 30 stores in cities including Los Angeles, Chicago, New York and Atlanta, and it has planned to have 100 by 2020. The acquisitio­n by Wal-Mart will help Bonobos expand its business.

Still, Mulpuru-Kodal said, it is a bit of “a game of Monopoly.”

“Wal-Mart has huge coffers. Even if one of them shows promise, it pays for the rest,” she said.

Bentonvill­e, Ark.-based Wal-Mart’s online business is gaining momentum but remains a distant second to Amazon. It rose 63% in the first quarter, up from 29% growth in the previous period.

Under Lore’s direction, Wal-Mart also has been working to accelerate the integratio­n between Walmart.com and Jet.com, and trying to take advantage of its scale in areas such as shipping and sharing its products. Wal-Mart also is starting to offer discounts on thousands of online-only items when customers elect to have them shipped to one of the company’s stores for pickup rather than shipped to their homes.

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