Walmart buys Bonobos for $310m in cash
Walmart announced last Friday that it has entered into an agreement to acquire US-based online menswear company Bonobos for $310 million in cash.
The deal confirms speculation since April that Bonobos would become Walmart’s latest e-commerce acquisition, following the retail giant’s purchase of ShoeBuy, Moosejaw and Modcloth in recent months.
Bonobos founder and CEO Andy Dunn will report to Marc Lore, president and CEO of Walmart U.S. eCommerce, and oversee the company’s collection of digitally-native vertical brands.
In a statement about the Bonobos acquisition, Walmart said its e-commerce brands will be offered on Jet.com and possibly through other Walmart brands in a variety of countries over time.
The retail giant has reportedly seen 63 percent growth in US e-commerce sales in its most recent quarter, as it ratchets up the competition against Amazon.
The majority of that growth comes from organic growth in Walmart.com, which has rolled out services like two-day free shipping with no membership fee and a discount for choosing click-and-collect.
“We’re seeing momentum in the business as we expand our value proposition with customers and it’s incredible to see how fast we’re moving,” said Lore, adding that bringing on innovators like Dunn will help shape the future of Walmart.
Dunn founded Bonobos in 2007 as a pureplay online retailer specialising in dress pants designed to fit athletic men.
The brand has since expanded into new categories, including dress shirts, and opened 30 bricks-and-mortar stores, where customers can get fitted and order items for home delivery.
But while Dunn said the Bonobos brand will remain unchanged in the acquisition, many customers have taken to the company’s Facebook page to express their disappointment.
One of the most-liked comments said:
We all get that this was a move based on economies of scale. But it’s also a move that your loyal customer base sees as the ends justifying the means. You’re joining an organization that millennials, your core consumers, loath and vilify as destructive, unethical, and cheap – essentially the polar opposite when previously thinking about Bonobos. In doing so you’ve alienated the voice of your customer – that which heavily contributed to the Bonobos brand initial success. In the mind of the consumer, the connection has been made and the perspective of quality tarnished.
Over the weekend, Dunn posted an article on Medium explaining the decision to work with Walmart in more detail.
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.