Walmart (WMT) is moving on from its partnership with Bonobos and is taking a financial bath on the deal in the process.
The retail titan had purchased Bonobos, an emerging menswear brand, for $310 million in 2017. The deal to sell Bonobos to fashion retailer Express Inc. (EXPR) and brand management firm WHP (which has a 60% stake in Express)is valued at $75 million, representing a $235 loss for Walmart.
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Walmart seems to be in shedding mode in early 2023 – it sold its Moosejaw apparel brand to Dick’s Sporting Goods in February.
One reason could be that Walmart seems to have hits stride in digital sales of late, racking up 12% in annual online sales growth. The retailer has also ramped up online sales to small businesses and could be moving away from direct partnership with brand name retailers.
For its part, Express seems to be a better fit for Bonobos, a former online retailer which has opened about 60 physical stores. Bonobos generated approximately $200 million in sales in 2022.
“Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realizing operating synergies and other economies of scale,” said Tim Baxter, Express Inc. CEO in a statement.
The Walmart-Express deal is expected to close in July, 2023. Express, which has seen its share price plummet amidst delisting rumors, saw its shares rise the day after the deal was announced.
