Bonobos, Nordstrom ink strategic dealWhat do a five-year-old internet startup and a 111-year-old retailer have in common?

More than one would think.

Founded in 2007 by Andy Dunn, Bonobos was designed to upend the fashion world. Dunn's vision of a company that operated completely in the digital realm may now seem rather conventional, but it was one of the first such companies to find success in its novel approach to driving sales.

The New York Times reports although Dunn had initially envisaged Bonobos as a marked departure from traditional brick-and-mortar store chains, he recently inked a deal that belies the firm's digital roots. Bonobos has teamed with Nordstrom, the luxury purveyor of apparel, in a deal that could have far-reaching repercussions within the retail sector.

For its part, Bonobos is set to receive $16.4 million in cash, and its products will appear in brick-and-mortar stores for the first time in company history. The exposure will help the brand's identity, Dunn asserted, adding the partnership with Nordstrom would ensure it is not diluted. Nordstrom, on the other hand, will gain expertise in email and digital marketing, according to The Times.

"We've been thinking about where growth is going to come from across all retail over the next 10 years," Nordstrom.com head Jamie F. Nordstrom said. "And certainly square-footage growth is not where that growth is coming from."

Seattle, Washington-based Nordstrom has a reputation of pushing boundaries within the fashion world. The retailer was one of the first such chains to overhaul supply chain management and strategic sourcing. What's more, the company has one of the most advanced inventory-tracking systems of any major retail chain, a scheme that allows the firm to exert enhanced control over its product offerings.

Both Bonobos and Nordstrom stand to benefit from the unorthodox partnership. Nordstrom executives will be given a crash course in digital marketing, while Bonobos will effectively augment its customer base. Forrester Research analyst Sucharita Mulpuru said large companies are often at a competitive disadvantage over their smaller counterparts in terms of implementing new strategies.

"These guys are usually slow and lumbering giants," Mulpuru noted. "But they need to make proactive investments. Because, left to their own devices, they could never emulate those businesses."

Nordstrom is hoping to buck such a characterization through its new partnership. Analysts said the move underscores how the retailer has leapfrogged rivals in its pursuit of online growth. In February 2011, the company purchased HauteLook for $180 million, and it is expected to continue to forge unconventional alliances as it works to lure shoppers – both to its brick-and-mortar stores and its e-commerce site.




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