When news broke on Friday that Walmart was acquiring the menswear startup Bonobos, many customers responded with dismay.
“Talk about a hugely shocking disappointment,” one person wrote on Bonobos’ Facebook page. “I can’t believe my favorite clothing brand sold out this hardcore. Don’t think I’ll be able to continue my support of Bonobos any longer. Sad day.”
However, Andy Dunn, Bonobos’ founder and CEO, who is now taking on the role of senior vice president of digital consumer brands for Walmart US ecommerce, says that the decision is in line with the company’s founding ethos.
“Our company exists as a series of contrarian decisions,” Dunn wrote in a blog post on Medium that was published Friday.
“When the idea first presented itself, my immediate thought was no way,” he said, noting at the time the company was “inches” from a deal that would keep Bonobos independent. “When Walmart acquired Jet, I realized the world is now changing even faster than I thought.”
Walmart’s acquisitions of Jet.com and trendy ecommerce brand ModCloth helped bring Dunn around to a new understanding of how ecommerce brands and platforms could develop.
“With our model proven, we now want to become the market leader in all of premium menswear,” Dunn wrote. “We also have a new mandate. We will be extending what we have learned to a wider ecosystem that we have helped create and come to love.”
Analysts have noted that that the acquisition could have major strategic rewards for both Walmart and Bonobos.
Bonobos offers Walmart “a brand with loyal customers, premium price points, and expertise in a differentiated niche,” Oliver Chen, an analyst at Cowen & Co., wrote in a research note as rumors of the acquisition began to circulate in April. Further, Bonobos brings Walmart fresh merchandising, fashion talent, and an entrance point into a high-margin specialty category, according to Chen.
Meanwhile, Chen said the Walmart deal could “accelerate Bonobos’ scale and share … and catapult Bonobos’ brand awareness.”