New York (CNN) Clothes are sometimes sold at a steep discount at Bonobos. Thursday night, the company sold itself at a loss.
Walmart Announced that it is offloading a fashionable menswear brand, selling it to management company WHP Global and Express Inc. For $75 million. This is a huge loss for Walmart, which acquired the brand in Walmart 2017 for $310 million As part of a failed attempt to diversify its online presence under previous administration
WHP Global is a little known company that owns some well known brands, Including Toys R Usand Anne Klein and Joe Gaines. Last year, WHP acquired 60% of Express Inc. WHP bought the Bonobos brand for $50 million, while Express Inc. It will acquire “operating assets and assume related liabilities” for $25 million.
“Bonobos is achieving double-digit sales growth and we plan to continue that momentum while realizing operating synergies and other economies of scale,” Express Inc CEO Tim Baxter said in a statement.
pass (EXPR) Shares opened Friday up 20%. The deal is expected to close later this year.
For Walmart, getting rid of Bonobos means it is tightening its focus on its core retail business in anticipation of a rocky economic environment ahead. In a note, GlobalData managing director Neil Saunders writes that the discounted price for Bonobos “reflects the current weaker outlook across retail, but also some as a result of Walmart not doing much to develop the brand over the past six years.”
Saunders said Bonobos is the best choice for WHP and Express Inc. , because they have a stronger focus in fashion and an established global presence to help the 16-year-old brand overseas. For Express Inc, this is “a welcome diversification from its core business that is largely exposed to the stagnant mid-market,” he said.
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