Walmart looks to entice millennials with latest fashion acquisition

BENTONVILLE, Ark., and NEW YORK — While Amazon was making headlines for snagging Whole Foods and disrupting the U.S. grocery market, Walmart was beefing up its fashion portfolio with the acquisition of Bonobos.

The Big Box giant has entered into an agreement to acquire the menswear online retailer — popular among millennials — for $310 million in cash. Following the deal’s closing, Andy Dunn, founder and CEO of Bonobos, will report to Marc Lore, president and CEO of Walmart U.S. e-commerce, and oversee the company’s collection of digitally native vertical brands.

Walmart has been building a millennial-friendly portfolio that includes recent acquisitions and popular online women’s fashion retailer ModCloth. Bonobo brands will be offered on and will be eventually joined by other Walmart own brands, including ModCloth, in a variety of countries.

The acquisition, which is subject to regulatory approval, is expected to close toward the end of the second quarter or the beginning of the third quarter of this fiscal year.

The announcement comes at a time of growth and innovation in e-commerce for Walmart. In its most recent quarter, Walmart saw U.S. e-commerce sales soar by 63% — the majority coming from organic growth in The company credits its compelling offering of low prices, more choices and new levels of convenience. Since the beginning of the year, the company sought to disrupt Amazon Prime by rolling out free two-day shipping with no membership fee, and by offering an extra discount to shoppers who pick up orders in store. It also revamped its website with the aim of making it easier for online shoppers to reorder. And, of course, has opened an opportunity to connect with urban, millennial consumers.

“We’re seeing momentum in the business as we expand our value proposition with customers and it’s incredible to see how fast we’re moving,” said Lore. “Adding innovators like Andy will continue to help us shape the future of Walmart and the future of retail. I’m thrilled to welcome Andy and the entire Bonobos team. They’ve created an amazing product and customer experience, and that will not change. In fact, Andy will be a great influence on the company, especially in leading our collection of exclusive brands offered online.”

The plan is to create via its acquisition of Bonobos and Dunn’s leadership more new products for consumers and new ways to buy them.

“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. That will always remain our mission,” Dunn said. “We are excited about applying all that we have learned to help shepherd in the next era of retail.”

Citi is serving as financial adviser to Bonobos for the transaction, while Fenwick & West is serving as its legal adviser; Weil, Gotshal & Manges and Hogan Lovells are serving as legal advisers to Walmart.


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