Published: Sun, June 18, 2017
Markets | By Erika Turner

Walmart to acquire online men's clothing retailer Bonobos

Walmart to acquire online men's clothing retailer Bonobos

Rumors had been circulating of the deal between Bonobos and Walmart for a while, and as predicted, this in part is a way to bring Andy Dunn, who had founded and was leading Bonobos, into a wider leadership role at Walmart running all of its fashion and related lifestyle operations. It purchased Jet.com previous year for $3.3 billion. Under the new deal, Bonobos clothing will not, as of yet, be sold in Walmart stores; it's not clear yet what will happen to the brand's current presence in Nordstrom or Bonobos' own brick-and-mortar locations, if anything.

Bononos, a men's clothing brand, launched online in 2007 and quickly expanded offline to open Bonobos Guideshop stores and gained a partnership with Nordstrom Inc.

"Adding innovators like Andy will continue to help us shape the future of Walmart, " said Lore.

In March, Walmart bought online retailer ModCloth for an undisclosed amount.

The acquisition 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, the company said. But - perhaps in a very intentional bit of timing - nearly at the same time that Walmart announced its Bonobos acquisition, Amazon announced it would be buying Whole Foods for $13.7 billion, giving it a very, very significant leg up in its budding food retail business.

US Fed raises rate, plans to trim portfolio
The benchmark lending rate was lifted by a quarter percentage point to a target range of 1 per cent to 1.25 per cent. Inflation was expected to be at 1.7 percent by the end of this year, down from the 1.9 per cent previously forecast.

Bonobos' clothes and accessories will be offered on Wal-Mart's Jet.com, the company said in a statement.

"What Moosejaw, ModCloth, Bonobos all have in common is not only that they are apparel retailers, but they have very authentic voices with a particular group", said Laura Kennedy, an analyst with research firm Kantar Retail.

Those new customers are in demographic groups that don't generally frequent Wal-Mart stores; the average Wal-Mart customer is less wealthy and quite a bit older than those typically shopping at Target and Amazon. Wal-Mart reported its US e-commerce sales jumped 63 percent during the first quarter of the current fiscal year, but much of the growth was because of the two-day free shipping program and other initiatives introduced by Lore. They fit really well, and I don't want to buy them from Walmart. The company continues to operate each acquisition as a stand-alone site while the leaders of each online brand have been retained and placed in charge of their respective categories across Wal-Mart's platforms.

Always one step ahead and ever the big brother, Amazon beat Walmart to its merger announcement by nine minutes, and by that time, Walmart stock had already plunged 4 percent.

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