Wal-Mart Stores Inc. is in talks to buy men’s clothing retailer Bonobos for about $300 million, according to people familiar with the situation, the latest in a string of deals aimed at attracting wealthier shoppers and more fashion-forward brands than its own website.
The acquisition would be Wal-Mart’s fourth purchase of a small online-focused retailer since it bought Jet.com Inc. for $3.3 billion last September, putting founder Marc Lore at the head of its sluggish U.S. e-commerce operations. Last month Mr. Lore led the purchase of hipster clothing website ModCloth. In February Wal-Mart bought outdoor specialty retailer Moosejaw and the month before, online shoe seller ShoeBuy.
The talks between Wal-Mart and Bonobos were reported earlier by Recode.
Bonobos was valued at nearly $300 million during its most recent round of funding in 2014, according to an estimate from PitchBook, around the price being discussed with Wal-Mart, said a person familiar with the situation. That would make it Wal-Mart’s priciest acquisition thus far under Mr. Lore’s leadership.
“Assortment is driving a lot of these acquisitions,” Wal-Mart Chief Executive Doug McMillon told investors last month before the ModCloth acquisition became public. “There are some suppliers that don’t want to sell on Wal-Mart.”
The company also wants the talent and product expertise the new employees provide, executives say.
Bonobos, started as an online-only retailer in 2007, produces its own clothing line appealing to fashion-forward men. It opened its first physical store in 2011 and now operates more than two-dozen “guideshops, ” which don’t hold inventory to sell directly, instead letting shoppers trying on clothes which they can order on-site and have mailed to them.
The deal would make Bonobos the latest online retail startup to get acquired as a boom in venture capital funding for retail subsides. Funding for retail startups surged in 2015, when venture capitalists invested a record-setting $1.8 billion in retailers, according to industry tracker Dow Jones VentureSource. Funding for the sector dropped more than 60% in 2016.
Meanwhile, mergers and acquisitions for the sector surged, with deals for 17 venture-backed retailers in 2016, according to VentureSource. That was up more than four times from the 3 deals done in 2015.