Wednesday, 28 June, 2017

Walmart to acquire online men's clothing retailer Bonobos

A general view shows a Wal Mart store in Monterrey Mexico A general view shows a Wal Mart store in Monterrey Mexico
Juana Turner | 18 June, 2017, 01:08

Global mega-retailer Wal-Mart has reached a deal to buy Bonobos, a men's clothing online retailer, for $310 million in cash, the companies announced.

"Adding innovators like Andy will continue to help us shape the future of Wal-Mart, and the future of retail", Wal-Mart's Lore said in a statement.

When it was reported in April that Walmart was in talks to buy Bonobos, some loyal fans of the suitmaker were disturbed by the news.

Admittedly, today's most mind-blowing acquisition news is that Amazon is purchasing Whole Foods for $13.7 billion, furthering what seems like its mission to take over every aspect of consumers' lives.

Indeed, as with Dunn's planned role at Walmart, Shoebuy CEO Mike Sorabella now heads up footwear for all of Wal-Mart's e-commerce, including Jet.com and Walmart.com, while Moosejaw CEO Eoin Comerford similarly runs the company's outdoor e-commerce vertical.

Walmart shares tumbled on over 5% in mid-morning trading, a sign investors are betting Amazon's e-commerce strategy will continue to dominate the industry, its shares jumped about 3%. It also means that Bonobos clothing is not available on Amazon.com.

The Bonobos deal is another example of Wal-Mart's push to rethink its US e-commerce strategy.

In March 2016, the also bought Hayneedle in March 2016, and Zappos-style shoe retailer ShoeBuy for $70 million from IAC. Women's online retailer ModCloth drew a similar negative reaction after it was snapped up by Walmart earlier this year.

However, even as Bonobos had become a more conventional retailer, it had maintained its online ethos, offering generous shipping and return policies.

Dunn said in a blog post the "bold decision" to sell his company to Wal-Mart "bets our future on taking our core capability in building a brand in the digital age and spreading it across a wider ecosystem". The retailer also has rapidly expanded its online assortment to more than 50 million items as well. Wal-Mart reported its US e-commerce sales jumped 63 percent during the first quarter of the current fiscal year, but much of the growth was because of the two-day free shipping program and other initiatives introduced by Lore. "They have access to brands, buying teams ... they have merchants and software engineers that might not move to Bentonville or Silicon Valley", he said.

Always one step ahead and ever the big brother, Amazon beat Walmart to its merger announcement by nine minutes, and by that time, Walmart stock had already plunged 4 percent.

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