A garment factory worker packs Bonobos brand shirts at a factory in Hanoi, Vietnam.
Manan Vatsyayan | AFP | Getty Images
walmart originally bought bonobos for $310 million in 2017 while it was trying grow your online presence And compete with Amazon under Lore, which founded Jet.com. It was just one of the DTC brands the mega-retailer picked up and later sold during its tenure, which also included Bare Necessities, Shoes.com, and ModCloth. Knowledge left walmart In 2021.
The company said in a news release that WHP, which took a 60% stake in Express in December, will acquire the Bonobos brand for $50 million. Express will receive the operating assets and related liabilities of Bonobos 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 a royalty fee.
The transaction is expected to close in Express’ 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 realizing operational 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 to be operating income and free cash flow positive in fiscal 2023.”
Once the acquisition is finalized, WHP’s portfolio will include over 10 consumer brands Yehuda Schmidtman, WHP’s global chairman and CEO, said total retail sales are close to $7 billion.
A Walmart spokeswoman said in a statement that the company decided “the time is right” to sell Bonobos after nearly six years.
“Bonobos joins 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 roughly $53.4 billion — or about 13% — of Walmart US’s total net sales last fiscal year, according to a company filing. That’s $15.7 billion in 2019, or about 5% of Walmart US’s total net sales.
Last February, Bonobos launched the Bonobos Fielder—a more affordable riff on the original brand that sells athleisure on its website, Walmart.com, and select Walmart stores.
The spokesperson said that a few months ago, Walmart decided to discontinue the brand because it overlapped with the men’s activewear and casual line, adding that the decision to discontinue the line was not related to sales of Bonobos.
Jon Hutchinson, CEO of Bonobos, will become President of Brand for Bonobos and report to Baxter upon completion of the transaction.
“This is an exciting moment for bonobos as we enter our next phase of evolution,” Hutchinson said. “Born as a digital native vertical brand, we plan to build on our strength in eCommerce and customer loyalty, leveraging XPR’s expertise in omnichannel retailing and scale through partnering with WHP Global in licensing and distribution “
Additional reporting by CNBC’s Melissa Repko