Bonobos occasionally offers substantial discounts on clothing. Thursday evening, the company’s stock was sold at a loss.
Walmart has announced that it will sell the fashionable menswear brand for $75 million to management firm WHP Global and retailer Express. Walmart acquired the brand in 2017 for $310 million in an unsuccessful effort to diversify its online presence under its previous management.
Walmart sells the clothing company Bonobos at a significant loss.
WHP Global is a relatively unknown company that owns several well-known brands, such as Toys “R” Us, Anne Klein, and Joe Jeans. In 2017, WHP acquired a 60% stake in Express. WHP is purchasing the Bonobos brand for $50 million, whereas Express has acquired “operating assets and assumed related liabilities” for $25 million.
Tim Baxter, CEO of Express, said in a statement, “Bonobos is delivering double-digit sales growth, and we plan to continue that momentum while also realizing operating synergies and other economies of scale.”
In premarket trading, Express (EXPR) shares increased by more than 16 percent. The transaction is anticipated to close later this year.
Walmart is narrowing its focus on its core retail business in anticipation of a turbulent economic climate by abandoning Bonobos. Neil Saunders, managing director at GlobalData, stated in a note that the discounted price for Bonobos “reflects the current weaker outlook across retail, but some of it is also the result of Walmart not having done much to develop the brand over the past six years.”
Saunders stated that Bonobos is a superior match for WHP and Express because they have a stronger fashion focus and an established global presence to assist the 16-year-old brand in expanding internationally. This is a “welcome diversification from its core business, which is far too exposed to the sluggish middle market,” he explained.
Network Hype Team