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Walmart to Buy Bonobos, Men’s Wear Company, for $310M
- egonschiele 9y agoWHY? I've bought most of my clothing from Bonobos for the last few years, I guess I'll look elsewhere now. > Partnering with Walmart — the biggest bricks-and-mortar retailer around — might have seemed extremely off brand for Bonobos. YES it is. And "I think Walmart is misunderstood in some ways." isn't an explanation. Bonobos and Walmart are totally different in my mind, I can't imagine I'm the only Bonobos customer disappointed by this change.
- sotojuan 9y agoFrom what little I've heard, Bonobos hasn't been doing too well. Maybe it was either sell or go out of business eventually?
- joelrunyon 9y ago> But for now, there are no plans to offer Bonobos’s $98 chinos or $128 dress shirts in Walmart’s 5,000-plus stores. Instead, Walmart is hoping to learn from Bonobos. Its co-founder and chief executive, Andy Dunn, will oversee Walmart’s digital brands, which also include the independent women’s brand ModCloth.
- sotojuan 9y agoI don't think that pricing is very good. $100 for pants is not enough for "better" quality/craftsmanship like designer labels have, but it's not low enough to be an easy purchase. Honestly, the $100 pants (from a few brands) I've worn don't feel any better (or last much longer) than $40-50 Uniqlo pants. I've always been curious about this market niche (better than fast fashion, but not designer quality).
- joelrunyon 9y agoWell somebody thinks that pricing is good enough because Bonobos just got bought. This comment is more to point out to the OP that while Walmart might have bought Bonobos, it doesn't mean he's gonna go shopping at the actual Walmart building.
- samsolomon 9y agoFor many clothing brands the sticker price isn't what many people pay. Sales occur every few weeks knocking 20 to 40 percent off of items. I think their shorts and pants are exceptional and worth the $50 to $70 you can get them for during sales.
- sotojuan 9y ago> Sales occur every few weeks knocking 20 to 40 percent off of items. I think their shorts and pants are exceptional and worth the $50 to $70 you can get them for during sales. Is selling most of your stock during sales profitable? If so, interesting business practice and I'm curious if it's more common than I thought (J. Crew could be doing the same).
- opportune 9y agoYes, because even during sales the margins are still high. They're just less high. In fact, as JC Penney proved to consumers, you often make more money setting prices at $50 and having frequent sales at $30 than you do setting the price at $30 but having no sales.
- sotojuan 9y agoI stand corrected then. Thanks!
- frgtpsswrdlame 9y agoWelcome to the merge economy. Support anti-trust.
- fashionofftopic 9y agoIs it though? I've found Bonobos to be of mediocre quality and boring design which doesn't call for the price point they are at. For $125 you can start getting some really nice shirts from other brands (Saturdays NYC, La Paz, etc). I think they probably can lean on Walmart to lower their production costs and possibly cut their prices to offer Walmart customers an option that is above their typical retail choices.
- egonschiele 9y agoYou're right. I only buy during sales, and mostly I buy because I hate shopping and the clothes fit me (I have long limbs). The quality of their pants is not great, they do get worn out quickly.
- dmoy 9y agoShit, for $120 you can get a near perfect fit tailored shirt shipped from HK (if you're ok with massively high latency and waiting for someone to come by and take a dozen measurements).
- hourislate 9y agoFor $20 bucks you can get an nice dress shirt from Costco. Does anyone really think anyone else gives a shit how much someone spent on a shirt? or what their pants cost. Zuck shows up in sweat pants and t-shirt to work. He probably has never spent $100 on a dress shirt in his life.
- opportune 9y agoI wouldn't use him as an example because he dresses the same way every day to project an image. But I agree. You can find clothes that fit well for very cheap. If you're associating with people that care how much you spent on your clothes, you should maybe consider associating with other people.
- x0x0 9y ago
- philfrasty 9y agoIs this a regular ecommerce valuation? Would be 2x revenue @150 Mio [1]. [1] http://www.retaildive.com/news/report-bonobos-raising-100m-to-expand-brick-and-mortar-footprint/429879/ http://www.retaildive.com/news/report-bonobos-raising-100m-t...
- snowman311 9y agoThat multiple doesn't seem crazy for a relatively early stage ecommerce startup. But, I'm guessing the acquisition price was based more on Bonobos' private valuation. Bonobos has raised ~$125 million so a $310 million valuation would be reasonable. https://www.crunchbase.com/organization/bonobos#/entity https://www.crunchbase.com/organization/bonobos#/entity
- cocktailpeanuts 9y agoHow interesting to see Amazon and Walmart making major acquisitions on the same day. One is for offense, the other is for defense. Goes to show that the future is Amazon and not Walmart.
- athenot 9y ago> One is for offense, the other is for defense. I wouldn't be so sure of that. In our tech circle, Amazon is indeed the darling and we love to hate on Walmart. However the latter is definitely skilled at logistics and supply chain optimization. Walmart is skilled in cut-throat margin markets, with the power to shift the upstream supply in order to meet its own goals. They are also better positioned to serve a wider demographic than just the upper middle class.
- exolymph 9y ago> Walmart is skilled in cut-throat margin markets, with the power to shift the upstream supply in order to meet its own goals. Granted, so is Amazon.
- bsder 9y agoAmazon is the darling. Where have you been, boy? Seriously, Amazon comes in for more than its fair share of (often deserved) hate here on HN.
- qmarchi 9y agoThough never quite reaches the level of WM
- champagnepapi 9y agoLooks like it is a big day for M/A
- cookiecaper 9y agoI like Walmart and I think they're in a very strong position to compete with Amazon. Hopefully acquisitions like this one indicate that they recognize the "disruptive" nature of ecommerce on their traditional business, which necessitates a separation so that the bigger business unit does not accidentally crush the smaller business unit.
- wonder_bread 9y agoIf only Wal-Mart had better branding...
- tryitnow 9y agoThis might be what they're trying to buy here, dunno if it will work, but they've got the capital to try out a variety of things.
- wonder_bread 9y agoVery true, it just remains to be seen whether the "main street murderer" stigma will remain despite this push
- pitt1980 9y agoseems like 2 different aspects of the brand the perception here seems to be that Wal Mart only sells stuff that 'people of Wal Mart' want to buy there's is probably plenty of room in Wal Marts brand to get at - 'we sell everything, down market stuff and up market stuff' -------- wal mart's impact on Main Street - while (somewhat) real - is a separate question
- Chaebixi 9y ago> If only Wal-Mart had better branding... The only way that has a chance of working is if they never let this brand touch one of their stores or their logo. Otherwise the association will wash away any kind of cachet the brand originally had.
- yalogin 9y agoI have never heard of bonobos before. Also, Walmart is trying to get more into online business and Amazon is getting into brick and mortar stores to marginalize walmart and target even more. Interesting.
- hourislate 9y agoBonobos is super expensive. I don't know how folks can afford to shop there. It would kill me to spend $300 on 3 dress shirts when I can get the Kirkland Brand for a fraction of the price. Even their sweat shorts are $80 and the Nikes I have were $15 on sale. The cheapest you can get a pair of jeans for is $100, Eddie Bauer has really nice jeans for half of that when they are on sale. I get the feeling Walmart is desperate to compete and will buy anything these days when all they really need to do is build a Web site that is easily navigable and works. You think a company with their resources could afford the talent required to build a site like AMZN has.
- wtf_is_up 9y agoI buy the Bonobos pants on eBay from time to time, when I can find my size available. The pants are really nice, but not worth retail price.
- toomuchtodo 9y ago> I get the feeling Walmart is desperate to compete and will buy anything these days when all they really need to do is build a Web site that is easily navigable and works. You think a company with their resources could afford the talent required to build a site like AMZN has. They have Walmart Labs [1], which to your point, doesn't seem to have the ability for whatever reason (don't discount the talent, its entirely possible that the bureaucracy in Bentonville, AR is holding them back). [1] http://www.walmartlabs.com/ http://www.walmartlabs.com/
- pembrook 9y agoI suspect talent is a huge issue for them. How many designers and engineers who have the choice between Apple, Google, Facebook, Airbnb, Uber, Lyft....or literally any other company...would choose Walmart? The company known for using the United States welfare program as supplemental income for their hordes of low-wage employees? Their brand image is a big turn-off for the upper-middle class yuppies who make up the majority of tech talent. They would be smart to lean much heavier on the jet.com brand in the future when it comes to recruiting.
- jpeg_hero 9y agoIs this a good outcome for those involved? or was it a mercy deal a la modcloth? I know long haul for everybody, esp Andy. Looks like money raised is less than purchase price, so is there some meat on the bone in this acquisition?
- opportune 9y agoLooks like an acquihire. Andy seems to be getting a pretty decent position within the upper management of the ecommerce division at Walmart. This is all speculation: Perhaps it's part of some sort of internal coup within Bonobos, where Andy wasn't happy with some internal board/finance shenanigans. By taking a lesser valuation but moving into a big position within Walmart (likely with huge bonuses), he could end up getting reimbursed at a level disproportionate to his equity at Bonobos.
- alangou 9y agoThis is a great move by Walmart. It is targeted directly at competing more effectively with Amazon. I don’t believe either company is worried about dilution of their respective brands. What Walmart needs is to keep leveraging its existing strengths — logistics and supply chain, as well as immense amounts of capital — while invigorating its online retail division so that over the next 20 years, they can appeal and sell to their target demographics (which is what millenials will become) with the same stickiness that Amazon does. Bonobos is popular among young male professionals that are relatively fashion-conscious. There are many workplaces in New York where the majority of new grads and millenials buy most of their wardrobe from Bonobos. The key — Bonobos is often the first place they look at. Andy Dunn has demonstrated he knows how to build a business that’s both sticky and appealing. He’s joining an online retail division headed by Marc Lore, and a Walmart that is shifting gears to face the Amazon behemoth. Purchasing Bonobos is part of their strategy of capturing audiences and market-share in the short-term, and of building a portfolio of brands that they can continue to expand for the long-term. Bonobos (as well as other recent acquisitions), and Jet.com, which Walmart acquired August 2016, are brands that were born online and grew online. These acquisitions mean people like Marc Lore and Andy Dunn, well-versed in the art of courting a customer base through primarily-online channels, are now at Walmart. And I foresee this trend continuing as Walmart’s ship slowly but steadily steers towards the age of online retail.
- rch 9y agoThe people you mention really dislike Walmart. Still a smart move as it lets Walmart snag some mid-america market share from Gap/Banana Republic/Old Navy (the last makes most of the money anyway).
- ajmurmann 9y agoYes, as someone who almost exclusively wears Bonobos and is a relatively young professional I'm super worried about this. I've been to Walmart probably not more often than the times. I can only assume and hope that Walmart did this to get access to people like me and not to transform Bonobos to cater to people who wear three wolf shirts.
- mmmpop 9y agoI heard of Bonobos quite a while back but never handled a pair of their chinos until about a year ago while shopping at Nordstrom. They certainly hit a price point for people that would get sticker shock from some brand like Adriano Goldschmied, but the quality of the pants is a bit out of line even for $90... so I guess there is a bit of irony in Walmart buying them :)
- xxSparkleSxx 9y agoThat's too bad. I've heard a lot about them, but never tried on a pair. However, I do have a pair of AG chinos that I bought on sale and they fit like heaven.
- mmmpop 9y agoI wanted to like them but the material just felt shoddy. AG chinos are undeniable proof of a higher power... they are incredible pants and worth every penny.
- jimmywanger 9y agoAG jeans are the brand I wore for a long time. They fit great and flatter me right out of the box, no tailoring required. But the material is a bit thinner and doesn't hold up as well as raw denim. However, raw denim is a bit more of an investment. It takes 2 weeks of constant wear for raw denim to feel "right", and you're supposed to buy undersized and let them stretch to your body. Once you do that, they're really nice. However, before that happens, it's like wearing a lower body straitjacket.
- hkmurakami 9y agoYeah I felt them at Nordstroms and thought the Nordstrom in house brand was much better quality. Then again Bonobos is probably more fashion forward wrt the cut and style.
- lis 9y agoI am wondering what this means for solidus.io. It's the shop system powering bonobos, which is basically just a fork of Spree Commerce.
- tildedash 9y agoHighly worried for Solidus. I just started using it for one of my side projects. Is this the time for another fork of spree/solidus?
- qmarchi 9y agoDisclosure: Am at WMTech. The project won't cease to see improvement in the open source version. Hell, we have a large team dedicated to open source for stuff exactly like this.
- trondogdale 9y agoI know some folks who work there. While they we're using Solidus at one point, they've moved away from it a while ago and maintain a custom backend.
- losteverything 9y agoIf i recall lore and/or Mcmillon said they are going to become experts in the product and online merchandising in Wal-Mart's various departments. Like apparel, sporting goods, housewares & domestics, pets, jewelry, auto, craft & celebration, gaming. To be the best at knowing at the product level.
- theprop 9y agoThis is going to be a disaster. They are anti-Walmart. Walmart needs to stay true to its vision of low price, high quality. Bonobos is high price, high end. "But for now, there are no plans to offer Bonobos’s $98 chinos or $128 dress shirts in Walmart’s 5,000-plus stores. Instead, Walmart is hoping to learn from Bonobos." Anytime you spend $310 million "hoping to learn"...you have no idea what your plan is and that means you fail when you're in e-commerce and aren't focused.
- aisofteng 9y agoThat's a pretty bold claim. It sounds like speculation to me, though. Do you have anything to back it up with?
- theprop 9y agoIt's very hard to make m&a work at high valuations. Very few companies have done m&a well -- maybe just facebook & google & apple to a lesser extent. It's very hard to make e-commerce work. E-commerce is checkered with failure. Not sure why they'd acquire a hybrid high-end retailer along with a bunch of other strange e-commerce firms. They seem to be focused on apparel -- may be some plan for apparel?!
- wonderwonder 9y agoI feel like walmart through no fault of their own has a bad brand in certain groups and would be well served by creating some sort of alternate brand to umbrella its acquisitions. Some people look down on those who shop there and in order to target those negative often times web savvy people they should create a child brand.
- skywhopper 9y agoWalmart is plenty at fault for their brand's image. Until very recently, they've been on a trend of pushing workers harder, driving suppliers to produce shoddier and shoddier products, lying about potential jobs to get small towns to subsidize building stores that run local companies out of business, then moving those stores to new locations and refusing to let competition lease the empty building they left behind, intentionally screwing around with employee schedules to make it hard for them to keep the second job that they need, making life miserable for long-time workers so they can avoid paying more than entry-level wages... the list can go on. Walmart has no one but itself to blame for its image.
- wonderwonder 9y agoWhile I agree with you in regard to wages and their employees treatment, I was referring to the way monied people view the store and those that shop there.
- geori 9y agoFor those who have never heard of bonobos, their pants fit exceptionally well. Andy & co focused on doing one thing, having quality pants that fit really well. The fit of the clothing matters more than anything about bonobos and it is where most brands screw up.
- skywhopper 9y agoDo you mean they fit you really well, or that they go out of their way to provide a big variety of styles, cuts, and sizes so that they potentially fit anyone really well?
- hn_throwaway_99 9y agoNo, is not about a large variety of cuts and styles. They became well known because their pants, while generally on the slim side, don't make you look like a hipster in skinny jeans, but they also don't look like parachute pants. In the US, mass market men's pants tend to be really baggy and unflattering (aka "diaper butt") for anyone with a slim or athletic build, and that was the niche Bonobos filled. In short, their pants just make your butt look good.
- kev009 9y agoQuick, everyone buy a hipster company
- bamboozled 9y agoAmerica, what a boring place...this coupled with news of Amazon buying whole foods just solidifies the idea that people are foolishly obsessed with material objects and efficiency and don't really care about buying responsibly. Does anyone do any living of their own or just love thinking about where their next box will be delivered from and how quickly it can get to their door. Hilarious and tragic at the same time. Edit: The down votes are worth it :)
- JohnJamesRambo 9y agoRead about your own news then?
- sctb 9y agoWould you please post civilly and substantively on HN or not at all? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- bamboozled 9y agoI'm not really sure what is uncivil about having an alternate view on something? Maybe you're right, this community and it's attitude towards censoring alternate views isn't really working out for me. What's the point of having a comments section if the discussion generally only goes one way.
- 5706906c06c 9y agoWalmart Labs, their e-commerce division has been on an acquisition frenzy for a while now. I recently interviewed there for a role that was directly involved with the M&A activities regarding technology and infosec. Just look at the list of acquisitions here: https://www.crunchbase.com/organization/walmart/acquisitions https://www.crunchbase.com/organization/walmart/acquisitions
- amauta 9y agoI would rather buy from a well known brand than spend almost the same amount at Bononos lol.
- amauta 9y agoAlso what I see interesting with Walmart is that they are pushing towards blockchain. If they actually continue in this path. It would beat the shiz out of Amazon.
- amauta 9y agoI would rather buy from a well known brand than spend almost the same amount at Bononos lol.