Walmart to acquire Bonobos
Walmart (WMT) continues to buy small and in-vogue brands to strengthen its position in the digital space against bigger rival Amazon (AMZN). On June 16, Walmart announced that it has agreed to acquire Bonobos, an online men’s clothing brand for $310 million.
Apparel is one of the best-selling categories in the digital space, and Walmart is leaving no stone unturned to fortify its position in this area. Earlier, the company acquired ModCloth, an online based women’s fashion retailer, for an undisclosed amount. These acquisitions help the company to gain hold of young and affluent shoppers and drive its online sales.
After the closing of the deal, which is expected to be at the end of the second quarter or the beginning of the third quarter, Andy Dunn, the founder and CEO of Bonobos, will report to Marc Lore, the president and CEO of the company’s US e-commerce business.
Walmart’s digital business is thriving
Walmart’s digital sales in the US (SPY) jumped 63% during fiscal 1Q18, up from the 29% growth registered in fiscal 4Q16. The company’s broad offerings, consumer-friendly moves including pickup discounts and two-day free shipping, and low prices are driving its online sales.
Management noted that much of this growth has come organically. However, the company’s acquisition of Jet.com last year for about $3.3 billion was a primary factor in the growth. Building on this success, Walmart acquired many smaller brands including Moosejaw and ShoeBuy, which have enhanced its category expertise and positioned it well in the digital business.