Walmart, the world’s biggest retailer, announced this Friday that it is going to acquire Bonobos, the online men’s fashion retailer for $310 million in cash. This is the fourth e-commerce acquisition of the retail giant in this year. The reason behind this move of Walmart is to stay competitive with its rival Amazon.com. Recently, Amazon announced that it would acquire the organic grocery chain Whole Foods Market.
The recent deal between Walmart and Bonobos follows several other acquisitions that the retail giant has made in the area of online fashion. Walmart has acquired Hayneedle in March 2016, outdoor retailer Moosejaw for $51 million in February 2017, Modcloth in March 2017, and Zappos-style shoe retailer ShoeBuy for $70 million from IAC. Many of these have been stimulated by its acquisition of Jet.com, which the retail giant has purchased in 2016 for $3 billion.
Bonobos, the company founded 10 years ago in New York started by selling simple chino pants online. But in the past few years, the company has expanded its area of online fashion by offering shirts, suits, and other men’s clothing. The company now has dozens of brick and mortar locations and boutiques as well in Nordstrom department stores.
According to a source, Bonobos co-founder and CEO Andy Dunn, and other top executives can earn an extra $20 million combined if they remain with Walmart for four years, overseeing its growing collection of “digitally native vertical brands.” Walmart is working insistently to transform itself into a dominant force in e-commerce under the management of new e-commerce Chief Marc Lore and Chief Executive Doug McMillon. The retail giant has also been continuously seeking for more and more ways to grow its e-commerce business in competition with its rival Amazon, and it sees fashion as well as targeting the younger users as a key part of that strategy.
The announcement of the deal between two companies comes at a time of growth and innovation in e-commerce for Walmart. In its most recent quarter, the sales of the retail giant Walmart has surged by 63 percent in U.S. e-commerce sales and the majority coming from organic growth in Walmart.com. The retail giant’s efforts in e-commerce are empowering the customers with low prices, more choices and also the new levels of convenience. Since its beginning, Walmart.com has started with two-day free shipping along with no membership fee, an extra discount for taking the orders in stores and the ability to easily reorder online or store purchases. And, Jet.com continues to provide a strong avenue for reaching an urban, millennial customer.
Walmart said that the deal is expected to close towards the end of the second quarter or the beginning of the third quarter of Wal-Mart’s fiscal year ending January 2018.