Lost in the shuffle today amidst the news of Amazon acquiring Whole Foods was that the long-rumored acquisition of Bonobos by Walmart for $310 million in cash.
The purchase is part of a sweeping effort by the world’s largest retailer to redefine itself as it builds out its digital ecosystem. While the transaction provides an avenue for sales growth, more importantly it gives Walmart access to younger, millennial shoppers who typically don’t shop at the big box retailer.
It also part of the company’s broader strategy of bringing expertise in niche categories outside of Walmart’s traditional wheelhouse through acquisitions of smaller brands. Bonobos is Walmart’s sixth acquisition since August 2016 which include Modcloth.com, Moosejaw, Hayneedle.com, Shoebuy.com, and most importantly Jet.com.
Bonobos, founded 10 years ago in New York, began by selling simple chino pants online. In recent years it has expanded to offer shirts, suits and other men’s clothing, and has opened dozens of brick-and-mortar locations, as well as boutiques in Nordstrom department stores, a previous investor.
As Bonobos has become a more conventional retailer, it has maintained its online ethos, offering generous shipping and return policies and calling its customer-service agents “ninjas”.
Walmart is working aggressively to transform itself into a dominant force in e-commerce to better compete with Amazon. When the company bought Jet.com last year for $3.3 billion, it installed the Jet founder, Marc Lore, as its e-commerce guru and gave him a mandate to expand quickly.
The deal is expected to close toward the end of second quarter or the beginning of the third quarter of this fiscal year.
Following the close of the deal, Bonobos CEO, Andy Dunn will report to Lore.