Walmart is buying men's clothing retailer Bonobos for $310 million in cash. And the discounter is giving Bonobos founder a key online role.
The deal is in keeping with Walmart's recent efforts to better compete with Amazon by beefing up its online fashion offerings and widen its appeal by buying digitally native, hip brands that target millennials and younger consumers.
Reports about Walmart's interest in Bonobos have been circulating for months.
Founded online in 2007, Bonobos started out by selling men's pants. It has expanded its assortment to include a wider variety of apparel and has opened 35 brick-and-mortar stores ("Guideshops"), with plans to have 100 locations by 2010. It also has a partnership with Nordstrom.
“Walmart has really stepped up to Amazon’s pace, both as a hyper retail innovator and in their growing ecommerce strength through acquisitions," said Charles Dimov, director of marketing, OrderDynamics."The Bonobos acquisition is another peg in the upward direction. Kudos to them for driving retail technology with a strong omnichannel play and presence, and in breaking out of the ‘low price only’ paradigm."
Once the deal is completed, Andy Dunn, founder and CEO of Bonobos will report to Marc Lore, president and CEO of Walmart U.S. eCommerce. Dunn will oversee Walmart's collection of digitally-native vertical brands, which, in addition to Bonobos, also include ShoeBuy and ModCloth. The brands will be offered on Jet.com and possibly other Walmart brands in a variety of countries over time, the company said.
"Adding innovators like Andy will continue to help us shape the future of Walmart, and the future of retail," stated Lore. "I’m thrilled to welcome Andy and the entire Bonobos team. They’ve created an amazing product and customer experience, and that will not change. In fact, Andy will be a great influence on the company, especially in leading our collection of exclusive brands offered online.”
The acquisition is expected to close toward the end of the second quarter or the beginning of the third quarter of this fiscal year.