Sources close to the matter told Recode that Walmart is in “advanced discussions” to acquire the 10-year-old New York-based e-commerce apparel company. According to the sources, both Walmart and Bonobos have agreed on a price for the deal and final due diligence is all that remains to be done.
The Bonobos buy would be one in a string of e-commerce acquisitions—including ModCloth, Moosejaw and ShoeBuy—since Walmart took over Jet.com last August.
On its latest earnings call in February, Walmart CEO Doug McMillon said, “We continue to invest in e-commerce to accelerate growth. We’re gaining traction and moving faster. We’re the second-largest U.S. online retailer by revenue, one of the top three online retailers by traffic and our Walmart app is among the top three apps in retail.”
Started in 2007, Bonobos came online with the goal of giving men better fitting clothes and less hassle in the shopping process. After finding success online with its well-fit pants, Bonobos ventured into the brick-and-mortar space, opening Guideshop locations in 2011 where shoppers could get one-on-one service with personal shoppers, see the product in person and then have it shipped home.
Bonobos has banked a lot of investment funds (upward of $125 million since 2014), but now the struggle has become how to secure new investment terms that make sense for all involved considering its size.
There are no further details yet on when a Walmart-Bonobos deal might come to fruition, but the move would be in keeping with the company’s latest efforts around e-commerce.
With the Jet acquisition came Marc Lore, the founder and CEO of Jet, who is now the CEO of Walmart’s e-commerce business and behind much of these recent moves.
“Marc is moving quickly,” McMillon said.
Bonobos has between $100 million and $150 million in annual revenue, and according to Recode, the company could fetch up to 2x revenue in a deal with Walmart.
Walmart’s e-commerce sales in the fourth quarter ended Jan. 31, grew 29 percent, and gross margin value jumped 36.1 percent.