2017 has been a busy year for Wal-Mart. To date, the company has bought four separate ecommerce brands and it has been revealed this week that it is in talks to take over its fourth ecommerce brand of the year. A move that is reported to cost over $300 million, it’s the latest move in the company’s bid to increase its online presence and sales in the face of increasing competition.
At the Code Commerce conference in Las Vegas in March, CEO Marc Lore told Re Code Senior Editor Jason Del Rey that the company was set to make more acquisitions.
“We’re being pretty active, yeah. We’re behind. We need to catch up. We’re seeing what these acquisitions have done for the business. It’s definitely a nice surge, so we will continue to do it.”
It seems that Mr Lore has turned these words into action this week as according to various sources, Wal-Mart Stores Inc are close to acquiring the leading men’s fashion retailer Bonobos in a deal that is reported to be worth up to $300 million.
Who Are Bonobos?
Bonobos was founded in 2007 by Chief Executive Officer Andy Dunn and Brian Spaly and started as a specialty men’s fashion retailer, specialising in selling dress pants designed to fit athletic men. With early success it soon expanded its range and began selling shorts and colourful plaid shirts too as well as selling through Nordstrom in addition to its own website. Prices at Bonobos range from just under $100 for dress shirts and from $550 for suits.
Known as primarily as an online retailer, Wal-Mart is likely to be attracted by its unique business model which sees it turn a profit even with its free shipping and returns policy. In online retail, this makes them one of the few. It’s mainly thanks to its emphasis on giving their customers the right fitting items which ensures that they have a high customer satisfaction rate as well as much less returns than may be expected.
However, over the last few years, Bonobos have expanded into bricks and mortar retails stores, opening over 30 ‘Guideshops’ where customers can get fitted for their purchases that can then be delivered to their home. Much of this expansion has been thanks to investment from Mousse Partners, Lightspeed and and Forerunner Adventures.
Wal-Mart’s three other recent acquisitions are Jet.com that was bought for $3.3 billion in a deal that not only saw them expand their web operations but also saw them inherit a fresh team of experienced ecommerce executives. ModCloth, the online female fashion retailer co-founded by Susan Gregg Koger was next followed by the acquisition of Moosejaw.com, the online outdoor apparel retailer.
Its spate of acquisitions has run concurrently with the company’s expansion of its own online channels, with its own online shelves growing from eight million items in 2016 to over 35 million in 2017 and this growth looks set to continue.