Bonobos, the DTC menswear brand bought by Walmart in 2017 and sold in 2023, is looking at new ownership yet again.
In 2017, Walmart acquired Bonobos for $310 million, part of a broader initiative by the retail giant to expand its e-commerce footprint. This acquisition was driven by Marc Lore, who had joined Walmart after the company acquired Jet.com in 2016 for $3.3 billion. Lore's strategy aimed to challenge Amazon by adding premium, niche digital-native brands to Walmart’s portfolio.
In 2023, Bonobos was sold to Express Inc. and WHP Global for $75 million, a fraction of what Walmart had originally paid for the brand. Express and WHP viewed Bonobos as a strong addition to their portfolio, with Express CEO Tim Baxter lauding Bonobos for its strong sales growth and brand loyalty.
However, shortly after this acquisition, Express filed for Chapter 11 bankruptcy, throwing Bonobos’ future into question once again.
Despite this turmoil, Bonobos continued to perform relatively well in the short term.
During the third quarter of 2023, the brand contributed $52.1 million in sales to Express, helping to offset declines in Express’s other brands.
But as Bonobos faced yet another ownership change, questions lingered about the brand’s ability to sustain its DTC model and maintain its identity amid financial restructuring.
Looking forward, the fate of Bonobos remains uncertain. With Express undergoing bankruptcy proceedings, it is unclear how Bonobos will fare under its new ownership structure. However, the brand’s strong sales growth and loyal customer base suggest that it may continue to thrive, even as it navigates the complexities of the current retail environment.
The story of Bonobos and other digital-native brands acquired by Walmart highlights the challenges these companies face when absorbed into traditional retail environments. While these brands often bring strong customer loyalty and innovative business models, they can struggle to maintain their identities and profitability within larger corporations focused on cost efficiency and mass-market appeal.
Alongside Bonobos, Walmart also purchased ModCloth, Moosejaw, and ShoeBuy, all part of a larger effort to diversify its offerings and attract a more affluent, fashion-forward consumer base.
Bonobos, which had developed a loyal customer base with its tailored menswear, especially its khakis, was an attractive target for Walmart. Its DTC model, with a strong e-commerce presence and a network of Guideshops where customers could try on products but place orders online, aligned with Lore’s vision of expanding Walmart's e-commerce capabilities.
Bonobos also complemented other recent Walmart acquisitions, like ModCloth, which focused on vintage women’s apparel, and Moosejaw, which specialized in outdoor gear.
However, while these brands fit into Lore's vision of turning Walmart into a more sophisticated e-commerce player, they did not mesh well with Walmart’s value-oriented core business model. This divergence would lead to challenges in integrating these premium brands into Walmart's larger ecosystem.
In an attempt to navigate this tension, Walmart positioned these brands on its subsidiary platform, Jet.com, which was geared toward urban, affluent consumers. However, even this strategy faltered.
By 2019, Walmart began divesting from many of these brands, selling ModCloth to Go Global Retail and eventually shutting down Jet.com in 2020. The closure of Jet.com marked the end of Lore’s ambitious strategy to rival Amazon by targeting wealthier shoppers.
Walmart’s divestments also extended to other digital-native brands.
In 2020, the company sold Shoes.com, a website it had acquired in 2017, and in early 2023, Moosejaw was sold to Dick’s Sporting Goods. Like Bonobos, Moosejaw's premium outdoor gear and lifestyle products never quite aligned with Walmart’s customer base, which tends to skew more rural and value-conscious.
The sale of Moosejaw marked another step in Walmart’s broader strategy shift toward refocusing on core businesses that offer higher margins and more scalable growth potential, like groceries, healthcare, and financial services.
Walmart's attempts to integrate these niche brands faced several obstacles. The premium price points and distinct customer bases of these brands contrasted sharply with Walmart’s traditional focus on offering low-cost goods to a mass-market audience. For instance, ModCloth’s retro-inspired fashion and Bonobos' upscale menswear were not natural fits for Walmart's typical shopper, who prioritizes savings and convenience over brand differentiation.
While Marc Lore’s strategy of acquiring niche brands was initially intended to diversify Walmart’s product offerings and attract wealthier consumers, it ultimately proved difficult to align these brands with Walmart’s broader value-focused mission. Bonobos, ModCloth, Moosejaw, and others catered to distinct customer bases that were not easily integrated into Walmart’s ecosystem, leading to financial and operational difficulties.
The closure of Jet.com in 2020 marked a significant turning point in Walmart’s e-commerce strategy. Jet.com had been a key piece of Marc Lore’s plan to compete with Amazon by offering a more sophisticated e-commerce experience to urban consumers. However, after several years of attempting to scale the platform and integrate its digital-native acquisitions, Walmart decided to shut down Jet.com and focus on expanding Walmart.com instead.
Lore’s departure from Walmart in 2021 underscored the end of this era. While his tenure had significantly expanded Walmart’s e-commerce operations, particularly through the integration of Jet.com’s technologies, the company ultimately decided to concentrate on more scalable growth areas. Today, Walmart continues to compete with Amazon, but through different channels, such as its Walmart+ subscription service and the growth of its third-party marketplace.
Walmart’s acquisition of Bonobos and other digital-native brands provides a fascinating case study of the evolving retail landscape. While these acquisitions initially seemed poised to transform Walmart’s e-commerce strategy, they ultimately revealed the difficulties of integrating niche brands into a larger, value-driven corporation.
As Walmart continues to refine its strategy, focusing on core competencies like omnichannel services and expanding its third-party marketplace, the lessons learned from Bonobos and other brands will likely shape its approach to future acquisitions and growth.
