Business

The Bonobos-Walmart saga: Marc Lore is quickly proving to be Walmart’s man of 2017.

Recode’s Jason Del Rey dropped a bombshell of a report late last week with his scoop that Walmart is in the due diligence stage of acquiring Andy Dunn’s Bonobos for around $300M.

There’s been plenty of analysis on the pending deal since then, and one thing is becoming abundantly clear in this narrative: In former Jet.com CEO Marc Lore, Walmart has a snarling e-commerce pitbull who’s been dying to sink his teeth into Amazon. And you could argue that, in the context of the brewing Walmart vs. Amazon war for e-commerce supremacy, he might in fact be Walmart’s savviest investment (and greatest weapon) in that clash (he was installed as Walmart’s head of e-commerce after the retailer’s Jet.com acquisition).

Consider these passages collected from multiple reports on the deal:

Amazon: Clearly in Lore’s sights…

  • “There’s no love lost between Lore and Amazon. He’s been competing with the Seattle company for more than a decade, dating back to his time at the helm of Diapers.com. Bonobos would be the latest in a series of Walmart acquisitions spearheaded by Lore.” — Geekwire
  • “We’re behind,” he recently told Recode’s Peter Kafka at the Recode Code Commerce event last month. “We need to catch up.” He wasn’t kidding. — Recode
  • “Walmart e-commerce chief Marc Lore has made it known that he’s concentrating on expanding Jet’s online offerings by way of acquiring other brands.When Jet.com revealed its $70 million purchase of ShoeBuy in January, Lore told Recode that it was a ‘fair assumption’ that the company and Walmart would pursue more acquisitions of online retailers, likely in ‘categories where they are long-tail, high-margin products and harder-to-crack brands.’And that’s just what the company has done. Following the purchase of ShoeBuy, Jet.com paid $51 million for online outdoor retailer Moosejaw in February, followed by ModCloth in March.” — Consumerist

Those purchases have been key for the Walmart portfolio in 2017: “The deals have also been intended to bring new digital leadership into Walmart — the CEOs of the acquired companies have been staying in place — and to increase the selection of goods on Jet.com, with bonus points for branded goods that can’t be found on other sites, like Amazon.” (Recode)

In a similar vein, the Bonobos purchase would be great for two key Amazon competitors (Nordstrom and Walmart): “The rumored acquisition could put a feather in the caps of two Amazon competitors. Nordstrom, which has struggled in its efforts to build a digital product to compete with the e-commerce king, could see a healthy return on its investment and Walmart would secure another win in its quest to reach new customers by acquiring popular brands.” (Geekwire)

Bonobos fans do not sound too happy at the moment: “Customers have expressed their dismay on social media, calling the potential acquisition “brand suicide” and threatening to never shop at Bonobos again if it’s acquired by Walmart.

“Bonobos just lost a customer,” one person wrote on Twitter. “I do love the stretched washed chinos but no offense, I won’t go to Walmart for my clothing.” — Business Insider

But there’s sound business logic in the deal: “On the surface, the Walmart and Bonobos brands make little sense together. But Lore has been trying to buy digital-native companies with strong brands that appeal to a different demographic than Walmart does, and ones that have the potential to be healthy standalone businesses with Walmart’s backing.” (Recode)

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