Wal-Mart in Talks to Buy Men's Clothing Retailer Bonobos for About $300 Million
April 18 2017 - 1:20PM
Dow Jones News
By Sarah Nassauer and Patience Haggin
Wal-Mart Stores Inc. is in talks to buy men's clothing retailer
Bonobos for about $300 million, according to people familiar with
the situation, the latest in a string of deals aimed at attracting
wealthier shoppers and more fashion-forward brands than its own
website.
The acquisition would be Wal-Mart's fourth purchase of a small
online-focused retailer since it bought Jet.com Inc. for $3.3
billion last September, putting founder Marc Lore at the head of
its sluggish U.S. e-commerce operations. Last month Mr. Lore led
the purchase of hipster clothing website ModCloth. In February
Wal-Mart bought outdoor specialty retailer Moosejaw and the month
before, online shoe seller ShoeBuy.
The talks between Wal-Mart and Bonobos were reported earlier by
Recode.
Bonobos was valued at nearly $300 million during its most recent
round of funding in 2014, according to an estimate from PitchBook,
around the price being discussed with Wal-Mart, said a person
familiar with the situation. That would make it Wal-Mart's priciest
acquisition thus far under Mr. Lore's leadership.
"Assortment is driving a lot of these acquisitions," Wal-Mart
Chief Executive Doug McMillon told investors last month before the
ModCloth acquisition became public. "There are some suppliers that
don't want to sell on Wal-Mart."
The company also wants the talent and product expertise the new
employees provide, executives say.
Bonobos, started as an online-only retailer in 2007, produces
its own clothing line appealing to fashion-forward men. It opened
its first physical store in 2011 and now operates more than
two-dozen "guideshops, " which don't hold inventory to sell
directly, instead letting shoppers trying on clothes which they can
order on-site and have mailed to them.
The deal would make Bonobos the latest online retail startup to
get acquired as a boom in venture capital funding for retail
subsides. Funding for retail startups surged in 2015, when venture
capitalists invested a record-setting $1.8 billion in retailers,
according to industry tracker Dow Jones VentureSource. Funding for
the sector dropped more than 60% in 2016.
Meanwhile, mergers and acquisitions for the sector surged, with
deals for 17 venture-backed retailers in 2016, according to
VentureSource. That was up more than four times from the 3 deals
done in 2015.
Write to Sarah Nassauer at sarah.nassauer@wsj.com and Patience
Haggin at patience.haggin@wsj.com
(END) Dow Jones Newswires
April 18, 2017 13:05 ET (17:05 GMT)
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