Walmart is buying Bonobos for $310 million

Lookout for Price Target? Wal-Mart Stores, Inc. (WMT), AGNC Investment Corp. (AGNC)

Lookout for Price Target? Wal-Mart Stores, Inc. (WMT), AGNC Investment Corp. (AGNC)

Launched online in 2007 with its signature line of better-fitting men's trousers, Bonobos is one of the leading apparel brands ever built on the web in the United States.

"With Walmart's recent acquisition of Bonobos, it is really showing other brick and mortar chains how to take the lead in layering an ecommerce component to its operations", said Michael Levine, VP of Marketing at Photon.

For Walmart, the deal marks at least its fourth acquisition of a digital-first retailer since Marc Lore took over as head of e-commerce in the US last fall - others have included Modcloth and ShoeBuy.

"They've created an incredible product and customer experience, and that will not change", Lore said in the statement. "That will always remain our mission", Dunn said in a statement.

Bonobos' clothes and accessories will be offered on Wal-Mart's Jet.com, the company said in a statement. In March it bought ModCloth, an online retailer of women's vintage-inspired clothing.

Not to be outdone by rival Amazon buying Whole Foods Market for a whopping $13.7 billion, Wal-Mart Stores on Friday said it would shell out $310 million for a purchase of its own - online men's clothing retailer Bonobos. It sent stock prices of many grocery chains downward; Walmart shares were down 5.2 percent in early trading.

However, Andy Dunn, Bonobos' founder and CEO, who is now taking on the role of senior vice president of digital consumer brands for Walmart US ecommerce, says that the decision is in line with the company's founding ethos. Since just the beginning of the year, Walmart.com has rolled out two-day free shipping with no membership fee, an extra discount for picking up orders in stores and the ability to easily reorder online or store purchases. "In fact, our new customer acquisition is growing more rapidly this year than it did in 2016, and we grew a lot in 2016". The retailer also has rapidly expanded its online assortment to more than 50 million items as well. The brands appeal to a different segment of shopper than those who frequent Wal-Mart, giving the retailer a chance to reach customers who may not stroll through its stores. "They each have a very distinct voice and I think you can argue that Wal-Mart doesn't have really deep penetration with any of those audiences". In Wal-Mart's most recent quarter, the store says it saw 63 percent growth in USA e-commerce sales.

Wal-Mart is gathering e-commerce expertise with each deal.

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