Walmart Inc. Agreed to sell its Bonobos menswear line to WHP Global and Express Inc. For $75 million — $235 million less than what the retail giant paid for the business in 2017.
WHP, owner of such brands as Anne Klein and Joseph Abboud, will pay $50 million for the Bonobos brand, according to a statement Thursday. Express, which is partly owned by WHP, will acquire the Bonobos operating assets and related liabilities for $25 million.
The deal adds to a list of fashion flops for Walmart, which has a record of acquiring apparel businesses only to offload or shutter them later. In 2020, the company announced the sale of its footwear website, Shoes.com, and its lingerie brand, Bare Necessities. The previous year, it announced the sale of ModCloth, a women’s fashion apparel business.
“Bonobos joined the Walmart family to expand our assortment and expertise in menswear,” Walmart said in an email. “Since acquiring Bonobos, Walmart.com has grown from 70 million to hundreds of millions of items. After nearly six years, we’ve decided it’s the right time to sell Bonobos.”
Andy Dunn, who founded Bonobos in 2007 as a website, initially oversaw the brand following Walmart’s purchase of it, but left the retail giant in 2019.
Moosejaw Sale
Walmart has pruned away other businesses with online origins like Bonobos. In February, the Bentonville, Arkansas-based company agreed to sell Moosejaw, a retailer of outdoor gear and apparel, to Dick’s Sporting Goods Inc. Walmart had purchased Moosejaw in 2017 for about $51 million. Terms of the sale weren’t disclosed.
The Bonobos deal is expected to close this summer. John Hutchison, the head of Bonobos, will stay on as brand president and report to Tim Baxter, chief executive officer of Express.
“Bonobos is delivering double-digit sales growth and we plan to continue that momentum,” Baxter said in the statement, adding he expects the transaction to contribute to operating income and generate cash in fiscal 2023.
Walmart stock was little changed at 9:55 a.m. In New York. Express surged as much as 25%, the biggest intraday gain in more than four months. The increase pared the apparel chain’s year-to-date stock decline to about 20%.
Back to Basics
Over the years, Walmart has frequently stumbled in its efforts to sell apparel beyond essential items such as socks and underwear. In 2010, the company vowed it was “going back to basics” by focusing on customers’ “everyday needs” after a push to go more upscale failed to gain traction.
A year later, Walmart closed its New York apparel office as part of its retrenching. “We don’t need to be on Broadway to sell socks and underwear and T-shirts,” a spokesman said at the time.
The pendulum swung back as e-commerce boomed. Walmart purchased Jet.com for $3.3 billion and brought in its founder, Marc Lore, to take on Amazon.com Inc. Lore pledged “to elevate the Walmart.com brand” and oversaw the purchase of Bonobos and other businesses.
Lore has since departed the company, but he helped to build out Walmart’s web operations. Recent data shows that Walmart+, an online subscription service that competes with Amazon’s Prime service, is helping the retailer chip away at the Seattle-based e-commerce giant’s lead among wealthier shoppers. Walmart has also started a third-party marketplace on its website, dramatically expanding its selection of available goods.
In spite of missteps in fashion, Walmart hasn’t abandoned its apparel aspirations, and the category remains an important part of the business. The Bentonville, Arkansas-based retailer hired fashion designer Brandon Maxwell two years ago in a bid to entice shoppers with more stylish clothes.
Last year, Walmart unveiled a new sleepwear and underwear line called Joyspun. Some brands it has acquired, such as plus-size label Eloquii, remain available on the company’s website.