Walmart invested $310 million on Friday, July 16th, 2017 and bought the online men’s clothing company Bonobos in an effort to improve their offering against Amazon on eCommerce and more specifically in fashion.
The announcement was made the same day that Amazon announced the Whole Foods Market acquisition for $13.7 billion.
This is the latest Walmart acquisition in their effort to grow the eCommerce side of the business, heavily driven by the huge growth that Amazon has achieved in the eCommerce industry. Walmart is the world’s biggest physical retailer and they are in a unique position to compete against Amazon in order to become a big or at least significant eCommerce retailer or at least a hybrid of the physical and digital retailer. Walmart operates more than 11.000 stores.
Women’s and Men’s clothing in Walmart
Fashion is one of the industries that the two retailers compete and for some reason, Walmart has chosen to invest heavily in the fashion sector, perhaps they believe they have or can grow fast some sort of advantage!
In the last two years Walmart acquired and operates the following fashion eCommerce retailers:
- Women’s Fashion eCommerce Modcloth in March 2017
- Outdoor Moosejaw in February 2017 for $51 million
- Home furnishing e-tailer Hayneedle in March 2016 (acquired through Jet.com in February 2016)
- Shoe retailer ShoeBuy for $70 million in
- eCommerce startup Jet.com for $3.3 billion in 2016
Walmart in May 2017 reported that eCommerce sales were up 63% for Q1 2017 leaving a lot to be expected for the all of these recent eCommerce acquisitions in terms of contribution to growth and revenue. The biggest probably difference for Walmart eCommerce operations is that Walmart merged logistics and supply chain operations with Jet.com and that allowed Walmart to offer free two-day shipping on millions of items for orders over $35.
Bonobos CEO Andy Dunn will join Walmart and will be overseeing Walmart’s digital vertical brands. Andy Dunn will be reporting to Marc Lore (Jet.com Founder), president and CEO of Walmart U.S. eCommerce.
Bonobos raised $128 million in 10 years, including $55 million in 2014 by Nordstrom, that also sells Bonobos products in their stores. That makes the acquisition price 2.5 times of the total funding.