A garment factory worker packing Bonobos brand shirts in a factory in Hanoi, Vietnam.
Manan Vatsyayana | AFP | Getty Images
Walmart originally purchased Bonobos in 2017 for $310 million while it was attempting to grow its online presence and compete with Amazon under Lore, who founded Jet.com. It was just one of the DTC brands the mega-retailer picked up under his tenure and later sold, including Bare Necessities, Shoes.com and ModCloth. Lore left Walmart in 2021.
WHP, which took a 60% stake in Express in December, will acquire the Bonobos brand for $50 million, the company said in a news release. Express will get Bonobos’s operating assets and related liabilities for $25 million.
As part of the deal, Express will enter into a licensing agreement with WHP that will allow it to run Bonobos in exchange for royalty fees.
The transaction is expected to close in Express’s second fiscal quarter of 2023, which typically ends in late July.
“Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realizing operating synergies and other economies of scale,” Express CEO Tim Baxter said in a statement.
“This is a compelling addition to our brand portfolio, and I expect the transaction will be accretive to operating income and free cash flow positive in fiscal 2023.”
Once the acquisition is finalized, WHP’s portfolio will include more than 10 consumer brands that are nearing $7 billion in total retail sales, said Yehuda Shmidman, WHP’s Global Chairman and CEO.
In a statement, a Walmart spokesperson said the company decided “it’s the right time to sell Bonobos” after nearly six years.
“Bonobos joined the Walmart family to expand our assortment and expertise in Menswear. Since acquiring Bonobos, Walmart.com has grown from 70 million to hundreds of millions of items,” the spokesperson said.
Online sales accounted for about $53.4 billion — or nearly 13% — of Walmart U.S.′ total net sales in the past fiscal year, which ended in late January, according to company filings. That’s a jump from $15.7 billion, or roughly 5% of Walmart U.S.′ total net sales, in 2019.
Last February, Bonobos launched Bonobos Fielder – a more affordable riff on the original brand that sold athleisure on its website, Walmart.com and select Walmart stores.
A few months ago, Walmart decided to discontinue the brand because it overlapped with its men’s activewear and casual lines, the spokesperson said, adding the decision to discontinue the line wasn’t related to the sale of Bonobos.
Bonobos CEO John Hutchinson will become brand president of Bonobos and report to Baxter after the deal closes.
“This is an exciting moment for Bonobos as we embark on the next phase of our growth,” said Hutchison. “Born a digitally native vertical brand, we plan to build on our strength in eCommerce and customer loyalty, leverage EXPR’s expertise in omnichannel retailing and scale through WHP Global’s partnerships in licensing and distribution.”
Additional reporting by CNBC’s Melissa Repko