Published: Sun, June 18, 2017
Economy | By Guillermo Lane

Walmart to acquire online men's clothing retailer Bonobos

Walmart to acquire online men's clothing retailer Bonobos

The New York-based online company becomes the fourth gobbled up by the Bentonville retailer this year as it transforms its e-commerce segment.

In March, Walmart bought online retailer ModCloth for an undisclosed amount. It purchased Jet.com a year ago for $3.3 billion. Wal-Mart has not said exactly what it paid for ModCloth, but said the transaction was "along the same lines" as ShoeBuy and Moosejaw.

The acquisition, which is subject to regulatory approval, is expected to close toward the end of the second quarter or the beginning of the third quarter of this fiscal year.

Wal-Mart said its e-commerce sales were up 64% last quarter, with "the majority coming from organic growth in Walmart.com".

Targeting Bonobos is a good move for Walmart as it tries to compete with Amazon, which has been quickly expanding its clothing business, says internet consultant Sucharita Mulpuru-Kodali. Lore added that Dunn will help "shape the future" of Walmart and the "future of retail". Company CEO and founder Andy Dunn will be soon be overseeing Walmart's digital brands.

"Bonobos is a continuation of Wal-Mart's apparel and fashion-focused forays", Spieckerman said.

Moosejaw, a clothing company, for $51 million on February 15. But Bonobos clothing won't be sold on Walmart's website or stores.

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"Call me insane, but I'm hoping we can build something standalone", Dunn said.

"When the idea first presented itself, my immediate thought was no way", Dunn said. "So with so many customers shopping there.as you're looking to grow your e-commerce presence, it's important to be where your customers are". "In fact, Andy will be a great influence on the company, especially in leading our collection of exclusive brands offered online". The retail giant seems to be following suit with the Bonobos deal.

Bonobos started online but like many similar startups, has also opened some showrooms.

The strategy also includes acquisitions which have given Wal-Mart more ground to stand on in high-margin categories like apparel. "Your customers are mainly people like me, millennials who shop online so as to avoid giving our dollars ... to community-killing super stores", one user wrote on Facebook.

Bonobos is a menswear retailer. They fit really well, and I don't want to buy them from Walmart.

The strategy is beginning to take hold: Last quarter, Walmart's USA e-commerce sales grew by 63%, although most of that growth came from Walmart's flagship website.

Wal-Mart is gathering e-commerce expertise with each deal. These are brands born online, and owned from design through distribution. And, Jet.com continues to provide a strong avenue for reaching an urban, millennial customer.

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