The Dell Boys
The Dell Boys

Wal-Mart Agrees to Acquire Bonobos as Amazon Steals Spotlight

Amazon dominates online purchases, while Walmart owns traditional retail so hard that it made more money previous year than Apple and Exxon, the second- and third-biggest USA companies, combined.

However, Andy Dunn, Bonobos' founder and CEO, who is now taking on the role of senior vice president of digital consumer brands for Walmart US ecommerce, says that the decision is in line with the company's founding ethos.

US stocks dipped on Friday as shares of Wal-Mart and other retailers were hammered after announced its entry into the brick-and-mortar retail business with its $13.7 billion deal to buy upscale grocer Whole Foods. "In fact, Andy will be a great influence on the company, especially in leading our collection of exclusive brands offered online".

"We began Bonobos 10 years ago to give men a completely different product and shopping experience: better-fitting, higher-quality clothing, in new and imaginative ways", Dunn said.

It appears Walmart's emphasis on clothing and e-commerce does little to impress investors against Amazon's technological gains and expansion into new industries, such as its latest grocery play.

"If you roll up enough of these online startups, you create a meaningful share" of business, she said. Even though Bonobos now has stores, its roots are in the online business and even its brick-and-mortars serve as massive showrooms where customers try items on, make a purchase, but then have it mailed to them. She noted that Walmart can learn from these millennial customers. It also means that Bonobos clothing is not available on Customers at the Guideshops can try on trousers, shirts, ties, belts and jackets with suggestions from stylists.

"Unfortunately, while this may make sense on a spreadsheet or in a conference room, in the real world it represents the end of the Bonobos brand, " he said, adding that some Bonobos customers were not pleased with news of the pending deal. The company now operates more than 30 stores in cities like Chicago, New York and Atlanta, and plans to have 100 by 2020.

The incursion by Amazon increases pressure on Wal-Mart to improve its e-commerce business - something the Bonobos deal is meant to address. It increased 63% in the fiscal first quarter, up from 29% growth in the previous period. That marked the fourth straight quarter of gains.

Walmart's Bonobos deal follows and complements several other acquisitions that the retail giant has made in the area of online fashion.


editors' picks