Walmart Inc.-owned Bonobos is laying off a number of employees. The move is part of Walmart’s broader push to rein in its ecommerce losses that are expected to reach $1.7 billion this year, according to Morgan Stanley estimates. That’s up from an estimated $1.4 billion last year.
“We made the difficult decision to part ways with valued members of the Bonobos team,” a Bonobos spokeswoman says. “These decisions are not taken lightly, but we believe they are necessary to set the brand and business up for long-term success. People are a large part of what makes Bonobos special, and we will continue to support all employees past and present as we build Bonobos into an iconic menswear brand.”
Walmart bought the menswear brand in 2017 for more than $300 million as part of a spending spree that also included online clothing retailers ModCloth and Eloquii, as well as online mass merchant Jet.com. The acquisitions were intended to attract a customer base that had little overlap with Walmart’s online or offline customers, according to a Walmart spokesman at the time of acquisitions.
For example, more than two-thirds of customers who shop at five of the companies Walmart acquired in 2016 and 2017—Bonobos, Jet, Shoebuy, Moosejaw and ModCloth—had a college degree versus less than half for Walmart.com, and more than 57% live in households with annual income in excess of $75,000 versus 41.5% for Walmart.com shoppers, according to a Bizrate Insights analysis based on data from nearly 1,000 consumers who shopped online in April 2017 at Walmart.com and the other five companies’ websites.
While Walmart’s spending spree expanded its reach, it failed to deliver a profit. That’s why the retailer is in the midst of rethinking its ecommerce strategy. For example, Walmart in June outlined its plan to fold all Jet.com employees into the larger company and shrink the unit’s management team. Last week it announced plans to sell the assets of digitally native women’s fashion retailer ModCloth to Go Global Retail, a brand investment platform that has worked with companies such as VF Corp. and Billabong.
And Bloomberg has reported that Walmart is considering selling or spinning off JetBlack, the text-based concierge shopping service that was the first business to emerge from its internal incubation arm.
Walmart is No. 3 in the Internet Retailer 2019 Top 1000.Favorite