Walmart in Talks to Acquire Bonobos

Late last year Bonobos CEO and founder Andy Dunn announced the company was seeking investors to raise $100 million to expand its physical footprint further, however this may have been harder than expected since it’s already raised a fair bit for a retailer its size.

To date, the company has raised US $127 million from investors, who also include Lightspeed Venture Partners and Acel Partners.

It’s unknown what the cost will be for the purchase of New York based Bonobos, but one thing is apparent – Walmart is under an acquisition streak, and it looks like its fiercely looking to enter the fashion game, in a holistic sense. The company only just acquired online discount store in August 2016, with other buyouts including women’s fashion online retailer Modcoth, outdoor wear retailer MooseJaw and online shoe store ShoeBuy.

Wamart’s largest deal to date under its digital chief Marc Lore was for Modcloth acquired for US $70 million, but Bonobos could likely go for more, since the company is in better financial shape than Modcloth, reporting annual revenue between US $100 million and $150 million, and valued at $300 million when it raised $55 million in 2014.

It may seem on the surface that Walmart and Bonobos don’t go together, but Lore has been aggressively buying digital-native companies with strong brands to appeal to a different target market than Walmart does. When the deal does go through, it’s likely that Dunn will remain in place as CEO of Bonobos, as has done so with the CEO’s of the other acquired companies.

Initially a pureplay retailer, Bonobos has been featured numerous times on Power Retail as a shining example of sound strategy and upward growth in e-commere, so Walmart would certainly be playing its cards right with this purchase if it wants to fill in its menswear clothing spot.

The brand was established in 2007 by Andy Dunn and Brian Spaly as an online store selling tailored pants to fit athletic men. Since then, Bonobos has evolved into selling a suite of menswear, including shirts, suits, outwear and accessories, and has also gone onto selling at US Nordstrom stores as well, who are also investors of the brand. To date, the company has raised US $127 million from investors, who also include Lightspeed Venture Partners and Acel Partners.

Bonobos has told us its multichannel model has been very successful since launching into the physical space in 2015, with its guideshops being a big part of its growth strategy. The brand now operates over a dozen of its guideshops in the US, with Dunn saying the company is looking to ramp up its physical presence.

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