walmart to buy bonobos but shares dip on amazonwhole foods deal
Last Updated : GMT 06:49:16
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Last Updated : GMT 06:49:16
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Wal-Mart to buy Bonobos, but shares dip on Amazon-Whole Foods deal

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Arab Today, arab today Wal-Mart to buy Bonobos, but shares dip on Amazon-Whole Foods deal

A man walks by the Bonobos Guideshop in New York's Financial District
Jeddah - Arab Today

Wal-Mart Stores Inc. said on Friday it would buy online men’s fashion retailer Bonobos Inc. for $310 million, in its fourth e-commerce deal in under a year, as it seeks to bridge the gap with e-commerce leader Amazon.com Inc.
However, Wal-Mart’s shares fell about 7 percent to $73.65 in morning trading after Amazon unveiled a $13.7 billion deal to buy upmarket grocer Whole Foods Market Inc.
A slew of other retailers’ shares also fell on the news, including shares of Kroger Co, Target Corp. and Europe’s Tesco Plc and Carrefour.
“When Amazon is serious, frankly, there is no limit to what they can do in terms of disrupting the space ... essentially relegating everything that currently exists in the business obsolete,” said David Tawil, president of hedge fund Maglan Capital.
Amazon’s deal to buy Whole Foods comes as Wal-Mart is engaged in a price war with rivals such as Aldi and Kroger in the grocery segment, which makes up about 56 percent of Wal-Mart’s revenue.
Amazon’s move only adds to the pressure on Wal-Mart, as over time, the convenience and grocery delivery offered by the e-commerce giant would likely cut into Wal-Mart’s sales, said Ken Perkins, president of research firm Retail Metrics.
However, analysts said other retailers such as Kroger would be hit harder by Amazon’s latest bet.
“Wal-Mart has prepared for this day,” said Michelle Grant, head of retailing at Euromonitor International.
Whole Foods customers had been happy to shop at other retailers including Wal-Mart, for similar products at lower prices, but it was unlikely that a Wal-Mart customer would shop at Whole Foods, even if the upmarket grocer were to cut prices, Grant said.
Online shopping spree
Bentonville, Arkansas-based Wal-Mart, the world’s largest brick-and-mortar retailer, has been beefing up its online presence to better compete with online rival Amazon.
Wal-Mart bought Internet retailer Jet.com for about $3 billion last year in the largest-ever deal for an e-commerce startup.
In the first three months of 2017, Wal-Mart snapped up online women’s fashion retailer ModCloth, outdoor clothing and gear retailer Moosejaw and footwear retailer Shoebuy.
Wal-Mart said Bonobos’s clothes and accessories will be offered on Jet.com.
The acquisition is expected to close toward the end of the second quarter or the beginning of the third quarter of Wal-Mart’s fiscal year ending January 2018, the company said.
Technology news website Recode reported in April that Wal-Mart was in talks to buy Bonobos and that the company generated $100 million to $150 million in annual revenue.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Additional reporting by Gayathree Ganesan; Editing by Anil D’Silva and Sai Sachin Ravikumar)

Source: Arab News

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walmart to buy bonobos but shares dip on amazonwhole foods deal walmart to buy bonobos but shares dip on amazonwhole foods deal

 



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