Wal-Mart To Buy Bonobos In Challenge To Amazon
LULU GARCIA-NAVARRO, HOST:
There's a head-to-head going on right now between Wal-Mart and Amazon for the future of retail. This week, online giant Amazon announced it's buying Whole Foods the same day Wal-Mart announced it's spending $310 million to buy Bonobos, a small upscale e-commerce retailer. NPR's Sam Sanders looks at what the Bonobos deal says about where this big retail battle could be headed.
SAM SANDERS, BYLINE: Forty-five-year-old Chris Marino has been a loyal Bonobos customer for a while.
CHRIS MARINO: I have been wearing pretty much exclusively Bonobos for the last five years.
SANDERS: And when you're shopping Bonobos, it's not cheap.
MARINO: Five pairs of their, you know, $185 wool dress pants. And I probably have a dozen or so dress shirts.
SANDERS: For instance, right now on Bonobos' website, a pair of their upscale men's sweatpants cost $118. So when the first rumors came out a few weeks ago that Wal-Mart was going to buy Bonobos, it raised some eyebrows. Marino even tweeted about it. You said, @walmart most disappointing news all year, exclamation point. Time to find another brand. #ImNotYourClientele #downstream #bonobos.
Talk about what made you want to write that tweet.
MARINO: Yeah, so actually it came...
SANDERS: Marino had a pretty long answer, but he ended up saying this.
MARINO: The initial comment was a knee-jerk reaction to Wal-Mart socks.
SANDERS: He and other customers think the company will tarnish Bonobos' high-quality brand. So why did Bonobos say yes to this? Shelly Banjo is a columnist at Bloomberg. She covers retail and consumer goods. She has two guesses.
SHELLY BANJO: For Bonobos, they're looking for some financial muscle. When it comes to Wal-Mart, they've been buying up a number of these smaller brands that they hope will help them kind of gain a better foothold to fight against Amazon.
SANDERS: For some time now, Amazon has been leading a retail revolution. People are shopping online more than ever before. And that's hurting big brick-and-mortar retailers like Wal-Mart, which is all making for a big fight. Wal-Mart is the country's biggest grocer. But now Amazon is stepping in that lane by buying Whole Foods. And Amazon is the country's biggest online retailer. Wal-Mart is trying to get in that market by buying web-first companies like Bonobos.
BANJO: Bonobos has been super creative when it comes to pushing the boundaries on how people shop.
SANDERS: Bonobos began in 2007 online only. Years later, they began to open brick-and-mortar stores. You can try things on in the stores, but you still got to order online. They're flipping retail on its head. Wal-Mart could use that expertise. The question for these more upscale brands being bought up is how much they'll be forced to change. Andy Dunn is the CEO of Bonobos, and he says the company will remain autonomous.
ANDY DUNN: We've got no plans to sell Bonobos at Wal-Mart or on walmart.com
SANDERS: But he did say Bonobos will be sold on jet.com very soon. That's another online retailer that Wal-Mart recently acquired. I also asked Dunn about customers who were mad about the Wal-Mart deal.
DUNN: I saw that tweet. And...
DUNN: ...I saw you tweet back at him. I would've tweeted back and said let's get lunch. I totally empathize with his perspective.
SANDERS: Dunn says he couldn't tweet anything until the deal was public. And he says he also had his own doubts about Wal-Mart. But as a deal came together, the company pleasantly surprised him. And, Dunn says, even after weeks of rumors about the Wal-Mart deal, Bonobos sales - they haven't dropped yet. Sam Sanders, NPR News.
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