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Walmart paid $300 million for Bonobos. Two years later, the men’s fashion brand is laying off staff.

Walmart is currently trying to turn its money-losing digital brands into profitable businesses.

Bonobos founder Andy Dunn poses while leaning against a store’s clothing rack.
Bonobos founder Andy Dunn at a 2016 store opening.
Daniel Boczarski/Getty Images for Bonobos
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Online menswear brand Bonobos laid off dozens of employees on Monday amid a broader push by its parent company Walmart to rein in e-commerce losses.

A spokesperson would not say exactly how many jobs were cut or what prompted the layoffs, and she wouldn’t answer whether the affected employees worked in corporate roles or in Bonobos’s 60-plus retail locations in the US. She said Bonobos has around 600 employees, which includes those who work in the company’s stores.

“Today we made the difficult decision to part ways with valued members of the Bonobos team,” the spokesperson said in a statement. “These decisions are not taken lightly, but we believe they are necessary to set the brand and business up for long-term success.”

The Wall Street Journal earlier reported news of the layoffs.

Walmart purchased Bonobos for $310 million in 2017, as the world’s largest brick-and-mortar retailer looked to build out a portfolio of digital-first fashion brands that would attract a generation of younger shoppers who increasingly rely on Amazon for more of their shopping needs. Bonobos was founded in 2007 as an online seller of men’s pants and has over time expanded into shirts, suits, and swimwear.

The Bonobos acquisition was one of several Walmart purchases of digital-first brands under the leadership of US e-commerce chief Marc Lore, who himself came to Walmart when it acquired his startup for $3 billion in late 2016. Under Lore, Walmart also purchased other digital brands, like vintage-inspired clothing company ModCloth and plus-sized women’s fashion brand Eloquii.

But all three brands are still unprofitable, Recode reported this summer, and Walmart recently sold ModCloth for less than half of the low-$40 million number it paid for the clothing brand in 2017, according to a source. Walmart also this year entertained a sale of Bonobos, Recode previously reported.

While Lore suggested earlier in his Walmart tenure that he might purchase a new digital-native brand every month, Walmart leadership has largely nixed those plans as the company’s US e-commerce losses are projected to surpass $1 billion this year. So Lore will focus more on incubating new online businesses inside of Walmart that could have mass appeal, such as the new mattress brand Allswell, he said at Recode’s Code Commerce event in September.

Along the way, tension between executives has been building inside Walmart as the retailer’s primary physical store business spits out profits while losses mount inside the much-smaller online business. Still, the company is continuing to invest in some big e-commerce initiatives. In September, Walmart announced it was launching a $98-a-year grocery delivery service whose product selection it hopes to broaden over time to better compete with the giant selection offered by Amazon’s Prime delivery membership program.

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