Walmart will pay $310 million to buy fashion e-commerce brand Bonobos. It’s clothing, however, won’t be sold in Walmart stores, but instead made available on its online marketplace Jet.com. Walmart will also learn from Bonobos.
It’s been quite a weekend for e-commerce this week. The head-to-head war between Amazon and Walmart competing for the crown in retail. On the same day that Amazon announced it will buy Whole Foods Market, Walmart publicised confirmation that it will purchase men’s online fashion retailer Bonobos for US $310 million. The deal has been on the
The deal has been on the grapevine since April this year, and Walmart says it’s expected to close later this year.
Bonobos, a fashion e-commerce company formed in New York 10 years ago, began by selling simple “better fitting” chino pants online. The company has since expanded its clothing range to now offering men’s shirts, suits, outwear and accessories, as well as opening a dozen bricks and mortar stores it calls “guideshops” in locations around the US.
Walmart in the meantime, has been busy acquiring online fashion brands including women’s fashion online retailer Modcoth, outdoorwear retailer MooseJaw and online shoe store ShoeBuy, and it has now purchased one of the most successful online fashion brands to date.
The plan isn’t to sell Bonobos’ $128 dress shirts or $98 chinos in Walmart stores. Instead, it will be available on Jet.com, the online marketplace Walmart recently bought for US $3 billion. Walmart is also looking to learn from Bonobos. CEO and co-founder of Bonobos, Andy Dunn, will remain with Walmart in an expanded role, overseeing its growing collection of digitally native vertical brands, including Modcloth.
The acquisitions are part of Walmart’s larger strategy to expand its online footprint against Amazon, with this already starting to take hold; last year Walmart’s e-commerce sales in the US grew 63%, however, most of that growth came from its flagship online store.
It may seem on the surface that Walmart and Bonobos don’t go together, but Walmart CEO, Marc Lore, has been aggressively buying digital-native companies with strong brands also to appeal to a different target market than Walmart does.
Initially a pureplay retailer, Bonobos has been featured numerous times on Power Retail as a shining example of sound strategy and upward growth in e-commerce, so Walmart is certainly playing its cards right with this purchase in order to fulfil its menswear clothing spot further, and learn from the brand.
Bonobos multichannel model has been very successful since launching into the physical space in 2015, with its guideshops being a big part of its growth strategy. Last year Dunn said the company is looking to ramp up its physical presence.