Walmart today doubled down on its efforts to
continue building out a online retail fashion business in its
bid to outpace Amazon in the wider world of commerce and
specifically e-commerce. Today it announced that it would acquire menswear
site Bonobos for $310 million in cash.

The deal is part of a bigger strategy at Walmart, the world’s
largest physical retailer, to grow its e-commerce business,
partly to offset competition from Amazon. But — perhaps in a
very intentional bit of timing — almost at the same time that
Walmart announced its Bonobos acquisition, Amazon announced it would be buying Whole Foods for
$13.7 billion
, giving it a very, very significant leg up in
its budding food retail business. That underscores even more
how important it is for Walmart to continue expanding into new

In fashion specifically both have been making several
acquisitions and launching labels to expand their customer

Walmart’s Bonobos deal follows and complements several other
acquisitions that the retail giant has made in the area of
online fashion. They include Modcloth in March 2017, outdoor retailer Moosejaw for $51 million in
February 2017, Hayneedle in March 2016, and
Zappos-style shoe retailer ShoeBuy for $70 million from IAC. Many of these have
been fuelled by its acquisition of, which it purchased
in 2016 for $3 billion.

Rumors had been circulating of the deal
between Bonobos and Walmart for a while, and as predicted, this
in part is a way to bring Andy Dunn, who had founded and was
leading Bonobos, into a wider leadership role at Walmart. He
will be “taking on a bigger and new role for us at eCommerce,”
a Walmart spokesperson said, “overseeing our digital vertical

“We now have a strong brand and offering for Women in ModCloth
and a strong brand and offering for Men in Bonobos.  Andy
will oversee both and has the chance to really play offense in
this space.”

He will be reporting to Marc Lore, president and CEO of Walmart
U.S. eCommerce (who joined with the acquisition).

“We began Bonobos ten years ago to give men a completely
different product and shopping experience: better fitting,
higher quality clothing, in new and imaginative ways. That will
always remain our mission,” Dunn, who will oversee Walmart’s
collection of “digitally-native vertical brands,” said in a
statement. “We are excited about applying all that we have
learned to help shepherd in the next era of retail.”

Walmart, the world’s biggest physical retailer, has been
looking for more ways to grow its e-commerce business in
competition with Amazon, and it sees fashion and targeting
younger users as a key part of that strategy.

Walmart said that in the last quarter its e-commerce sales were
up 63 percent, with “the majority coming from organic growth in” — meaning it has yet to prove that its big
acquisition play to buy into “digitally native” brands has or
will pay off.

“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,” said Lore in a statement. “Adding innovators
like Andy will continue to help us shape the future of Walmart,
and the future of retail. I’m thrilled to welcome Andy and the
entire Bonobos team. They’ve created an amazing product and
customer experience, and that will not change. In fact, Andy
will be a great influence on the company, especially in leading
our collection of exclusive brands offered online.”

Bonobos had raised just under $128 million, with the last round
in 2014, and had always said it had its sights set on an IPO. Clearly,
things took a different turn. In a Medium
 published today, Dunn noted that the company was
on the verge of closing a new round of funding, although in the
end, it chose the acquisition route instead.

One of the big issues is that to win in e-commerce, you need
economies of scale, and in that regard it may have proven to be
too much of a challenge for the company. What’s interesting is
that one of Bonobos’ specialties has been building a connection between online and offline
, which is something that Walmart may be interested
in tapping.

There is another interesting parallel between Walmart and
Amazon in its acquisition strategies: both are very much taking
a page from Apple’s playbook of aiming at premium customers.
Whole Foods is sometimes known as “Whole Paycheck” for being so
expensive to shop in. Bonobos and other fashion purchases that
Walmart has made, meanwhile, are not known for cut-price goods.
In both cases, Amazon and Walmart have built reputations on
being super competitive (read: cheap) on pricing, but they both
appear to be turning a new leaf with their new waves of

Updated with clarification on Dunn’s role at Walmart, and
adding more information about Bonobos’ funding story.