Sun, Jun 18, 2017 - Page 16 News List

Walmart to acquire online clothing retailer Bonobos

AP, NEW YORK

Wal-Mart Stores Inc is buying online men’s clothing retailer Bonobos Inc for US$310 million in cash, showing that its appetite for hip clothing brands shows no sign of abating as it looks for ways to gain on Amazon.com Inc.

It is a sign of the aggressive direction Walmart is taking since buying Jet.com Inc last year and keeping its founder as head of its online division.

Walmart has since bought clothing seller ModCloth Inc, footwear retailer ShoeBuy.com Inc and outdoor-gear seller Moosejaw as it focuses on brands that appeal to younger shoppers.

Bonobos, which started out selling pants online, caters to male shoppers looking for help putting together a wardrobe.

Targeting Bonobos is a good move for Walmart as it tries to compete with Amazon, which has been quickly expanding its clothing business, Internet consultant Sucharita Mulpuru-Kodal said.

“If you roll up enough of these online start-ups, you create a meaningful share” of business, she said.

While Walmart keeps trying to compete against Amazon by pushing harder into online, Amazon announced a bold move into brick-and-mortar stores on Friday by saying it would buy Whole Foods Market Inc.

The Bonobos deal, announced on Friday, is expected to close at the end of the second quarter or the beginning of the third quarter of this fiscal year.

Bonobos chief executive officer and founder Andy Dunn is to report to Walmart’s US online chief executive officer operations Marc Lore.

“Adding innovators like Andy will continue to help us shape the future of Walmart,” Lore said. “They’ve created an amazing product and customer experience, and that will not change.”

Bonobos started online, but like many similar start-ups, has also opened some showrooms. Customers at the Guideshops can try on pants, shirts, ties, belts and jackets with suggestions from stylists, then order online at the store and have their clothes delivered to their home or office a few days later.

The company operates more than 30 stores in US cities like Chicago, New York and Atlanta, and plans to have 100 by 2020.

For Bonobos, the acquisition by Walmart would help expand its business.

Still, Mulpuru-Kodal said, it is a bit of “a game of Monopoly.”

“Walmart has huge coffers. Even if one of them shows promise, it pays for the rest,” she said.

Bentonville, Arkansas-based Walmart’s online business is gaining momentum, but remains a distant second to Amazon.

It increased 63 percent in the fiscal first quarter, up from 29 percent in the previous period. That marked the fourth-straight quarter of gains.

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