Walmart announced Friday it is buying online apparel company Bonobos for $310 million to further beef up its e-commerce operation as it continues to compete with Amazon.
The move comes the same day as Amazon announced plans to buy Whole Foods Market for $13.7 billion to further expand into the grocery world.
Andy Dunn, founder and CEO of Bonobos will stay on, and he will oversee Walmart’s collection of online-based brands. Dunn will report Marc Lore, the Jet.com founder who became Walmart’s e-commerce chief after the retail giant acquired the startup for $3.3 billion.
Lore has been competing with Amazon for more than a decade, dating back to his time at the helm of Diapers.com. Bonobos is the latest in a series of Walmart acquisitions spearheaded by Lore, including ModCloth, ShoeBuy, and others. Walmart said in a press release that these online brands will be offered on Jet.com in several countries.
The transaction still has to clear regulatory hurdles, and Walmart expects the deal to close toward the end of the second quarter or beginning of the third quarter.
Bonobos was founded at Stanford in 2007 as an online-only men’s retailer. In 2011, the New York City-based company began opening brick-and-mortar “Guideshops,” including a location in Seattle, where men could get fitted for suits and other clothing and then have their items delivered to their homes a few days later.
The unusual model caught the attention of Seattle-based retail giant, Nordstrom, which invested $55 million in 2014 and began carrying Bonobos items in stores.
In a post on Medium, Dunn gave a little insight into his mindset in making the decision to sell to Walmart. A lot of it had to do with Lore, who has been a mentor to him for years.
When the idea first presented itself, my immediate thought was no way. At the time we began discussions a couple months ago, we were an inch from signing another deal that would have kept us on an independent path.
So why do this?
When Walmart acquired Jet, I realized the world is now changing even faster than I thought.
Marc Lore has been a mentor of mine for a long time. He taught me how to hire people and how to do the hardest thing in business, which is to make a great culture. I believe Marc is the most innovative and ambitious e-commerce entrepreneur on the planet.
When we sat down and started talking in the context of Walmart x Jet x Bonobos, my mind exploded. Even more so than I realized, Marc and I have a mind meld on how brands and platforms will develop in this rapidly changing environment.
Marc is the best in the world at building upstart third-party brand e-commerce properties. He and I will now leverage our combined know-how and, with the biggest company in the world behind us, take on creating the leading vertical e-commerce platform.
These acquisitions show just how heavily Walmart, traditionally known for its more than 11,000 brick and mortar stores, has invested in its e-commerce operation in recent years. The company says e-commerce sales in the U.S. grew 63 percent in the last quarter.
In addition to the billions it has spent acquiring e-commerce companies, Walmart has also emphasized shipping. To rival Amazon’s Prime program, Walmart introduced free two-day shipping on millions of items for orders over $35. A month later, Amazon lowered the threshold of purchases eligible for free shipping from $50 to $35, though those orders ship in five to eight days rather than two.
Editor’s Note: The purchase price has been corrected since the original post.