Wal-Mart Hoping To Stitch Together A Strong Online Apparel Identity With Potential Bonobos Purchase
A popular saying holds that good things come in threes, but Wal-Mart Stores Inc. is hoping to add one more digit to the sentiment. Having acquired ShoeBuy, MooseJaw and ModCloth since late December, the Arkansas-headquartered corporation is making yet another push to bolster its online sales by courting Bonobos, a high-end men’s clothing retailer.
Though its fiscal 2017 revenue reached a staggering $485.9 billion, Amazon generates only around 3 percent of its total sales through online transactions. Given its distinction as the world’s most profitable provider of in-store-available garments, with sales greater than $23 billion, Wal-Mart certainly could benefit from increasing its internet integrity, especially in the quest to keep ahead of fellow heavyweight Amazon.com Inc. in overall financials.
The aforementioned buys come as products of Wal-Mart’s August purchase of e-commerce newbie Jet.com. The latter’s CEO, Marc Lore, then set himself to bolstering Wal-Mart’s reputation by making the trio of deals. The recent additions collectively peddle footwear, apparel, outdoor wear and women’s clothing. And while they definitely have clout, securing an alliance with Bonobos would likely cause Wal-Mart CEO Doug McMillon and his peers to go ape with excitement.
According to a Friday-issued Recode article, extensive discussions have occurred between the parties, with the website reporting that they have agreed on an undisclosed price. While speculating on its size could prove interesting, what seems more compelling is considering what effects the deal might ultimately have.
Based in New York City, Bonobos, which records between $100 million and $150 million in annual revenue, has a very loyal line of customers, many of whom have decried the likely union, owing to perceptions of Wal-Mart as low-end. Pedigree matters aside, the probable purchaser could be orchestrating a portfolio that it could come to manage online, offline or in combination. With respect to the fashion sector, the tie between Wal-Mart and Bonobos could help the former to lessen the strange-hold that Amazon has on online sales, with the Jeff Bezos-led behemoth registering $13 billion in clothing and footwear transactions last year.