Walmart to sell menswear brand Bonobos to Express, WHP Global for $75 million (updated)

Express

13/04/2023 23:41

(Adds details on Walmart; Updates shares)
       April 13 (Reuters) - Walmart Inc  WMT.N  is selling
menswear brand Bonobos to Express Inc  EXPR.N  and WHP Global
for $75 million, a far lower price than what it paid nearly six
years ago.
    Bonobos, which Walmart acquired for $310 million in June
2017, sells menswear ranging from suits and trousers to swimwear
online.
    The deal marks the first acquisition since brand management
firm WHP Global, which owns Toys "R" Us and fashion labels such
as Anne Klein, partnered with Express earlier this year and took
a 7.4% stake in the clothing retailer. 
    WHP Global will acquire the Bonobos brand for $50 million,
while Express will acquire the operating assets and assume
related liabilities of the Bonobos business for $25 million, the
companies said on Thursday.
    Shares of Columbus, Ohio-based Express rose about 22% to 82
cents in extended trading.    
    While Walmart purchased Bonobos in a bid to build a cachet
of upmarket online brands and attract young shoppers, the retail
giant struggled to make the brand profitable and laid off dozens
of employees in 2019.
    Walmart has more recently concentrated on building out
alternative revenue streams such as advertising and delivery
than adding brands to its assortment.
    "We're now in a phase that is less about scaling...
eCommerce assortment... and more about execution and operating
margin improvement," Walmart CEO Doug McMillon said at its
investor meeting last week.      
    Express in March reported a 14% fall in fourth-quarter sales
at $514.3 million, hit by weakness in its women's business.
Meanwhile, its men apparel division posted a record year,
gaining market share in denim, knitwear and chinos categories. 
    The deal is expected to close in the second quarter,
following which WHP and Express will enter into an exclusive
license agreement, giving Express the right to use the
intellectual property acquired by WHP to run the Bonobos
business. 

 (Reporting by Deborah Sophia in Bengaluru and Siddharth Cavale
in New York; Editing by Shweta Agarwal)
 ((DeborahMary.Sophia@thomsonreuters.com;))