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Admittedly, today’s most mind-blowing acquisition news is that Amazon is purchasing Whole Foods for $13.7 billion, furthering what seems like its mission to take over every aspect of consumers’ lives. But elsewhere on the shopping front, there was another significant move: Bonobos, the menswear brand that launched 10 years ago with the promise of offering dudes better-fitting pants, has sold to Walmart.
Rumors that such a deal would take place have been kicking around since April, and America’s biggest corporation has now bought Bonobos for $310 million, according to a release from the company. It’s the latest and most expensive in a series of relatively small apparel acquisitions made by Walmart in the last year, including Modcloth, ShoeBuy.com, and the outdoor e-tailer Moosejaw.
What do all of these names, plus Bonobos and Jet.com, which it acquired last August for $3 billion, have in common? They’re e-commerce ventures. Though Walmart is America’s biggest corporation, bringing in revenue of $485.9 billion during fiscal 2017, it has historically relied too heavily on its brick-and-mortar stores to drive growth and failed to innovate in online shopping. Now it’s trying to catch up with Amazon, the clear leader in that space, while capturing a customer that’s younger, urban, and more affluent than the one it already has — the type of bro who buys his work wardrobe at Bonobos, say.
Part of Walmart’s strategy here is to promote acquired brands’ leadership to oversee the categories they know best across all of Walmart. Andy Dunn, the founder and CEO of Bonobos, is taking on the company’s portfolio of “digitally native vertical brands (brands born online, and owned from design through distribution),” according to a rep for Bonobos. That includes Modcloth, too.
Walmart’s newest acquisition may be small and digital, and Amazon’s massive and real-world, but they’re going for a very similar customer. While the shrinking middle class is depriving flailing mall chains of a key customer base, Walmart and Amazon have fixated on one that’s growing and growing up: the young and moneyed.