Walmart is buying another niche clothing company to add to its expanding portfolio of exclusive consumer brands. The world's largest retailer announced Friday that it plans to acquire Bonobos, a high-end, online-only menswear label, for $310 million.
After the deal closes, Bonobos founder and CEO Andy Dunn will move over to Walmart's US e-commerce division under Marc Lore, former CEO of Jet.com and current chief of Walmart's online operations, to oversee the company's collection of digitally-native vertical brands.
Bonobos eventually will become an exclusive brand sold on Jet.com, which Walmart acquired in 2016 for $3 billion in a bid to reach more urban, millennial customers.
The deal comes at an interesting moment in Walmart's evolution. The discount retailer is pouring millions into its e-commerce business and recently reported a 63 percent increase in comparable sales online.
With Lore at the helm of e-commerce, Walmart has started prioritizing the fashion category and seeking out unconventional online shops that could add to the company's assortment of marketplace brands and expand its reach to new audiences.
"We're seeing momentum in the business as we expand our value proposition with customers and it's incredible to see how fast we're moving," Lore said in a statement. "Adding innovators like Andy [Dunn] will continue to help us shape the future of Walmart, and the future of retail."
In March, Walmart acquired indie online retailer ModCloth. On the surface, ModCloth and its website still operate independently, but officially function as a complementary brand to Walmart's other e-commerce sites.
Both Bonobos and ModCloth stand to benefit from Walmart's deep financial coffers, logistics resources, and massive consumer reach through Jet.com and its other e-commerce sites. Walmart gains footing in key long-tail categories -- including fashion, general apparel, and home -- to bolster its broader e-commerce strategy.
As an interesting side note, Walmart's acquisition announcement came out just as Amazon revealed its plans to purchase Whole Foods for $13.7 billion. The deal ups the rivalry between the two retail giants, with Amazon vying for a bigger slice of the grocery market -- a space that happens to be one of Walmart's key categories.