Less than two months after selling off Moosejaw Mountaineering to a more appropriate home at Dick’s Sporting Goods, another of Walmart’s digital-first apparel brands is being sold. This time, menswear seller Bonobos is going to Express and WHP Global for $75 million, a $235 million discount to its $310 million acquisition in 2017.
And so, the vision of former Walmart Ecommerce head Marc Lore, founder of Jet.com, to create a stable of hot DTC brands under its banner continues to be deconstructed. Earlier brand off-loadings from Walmart include Bare Necessities, Shoes.com and ModCloth. Lore departed the company in 2021.
Bonobos CEO John Hutchison will become brand president, reporting to Express CEO Tim Baxter after the transaction closes. Bonobos will remain at its current headquarters in New York, also the location of WHP. It was ahead of its time in the clicks-to-bricks trend of DTC brands, with its inventory-free guideshops for trying on then ordering apparel.
Andy Dunn, who founded Bonobos while a student at the Stanford University Graduate School of Business in 2007, was brought on post-acquisition to help Walmart grow its ecommerce operations. He left in 2020, and was applauded two years later for very publicly sharing his prior battle with bipolar disorder.
This is the first acquisition since Express and WHP Global struck a strategic partnership in December, with the aim of acquiring and nurturing their own portfolio of retail brands. At the time, WHP invested $25 million in Express stock, and the two created a $400 million joint venture in which WHP holds a 60% stake.
The deal provided a huge boost to Express as its performance had been slipping for several quarters. Last month, the retailer reported a 14% decline in Q4 net sales, a 15% drop in same-store sales and a near-tripling of its operating loss to $39.3 million.
“Bonobos is an ideal first acquisition for our new partnership with Express and will be a terrific addition to our fashion vertical,” said Yehuda Shmidman, global chairman and CEO of WHP, in a release. “Post-closing, WHP Global’s portfolio will include more than 10 powerful consumer brands approaching $7 billion in total retail sales.”
Other brands owned by WHP include Anne Klein, Joseph Abboud, Joe’s Jeans, William Rast, Isaac Mizrahi, Toys”R”Us and Babies”R”Us.
“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, CEO of Express, in the release. “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.”
Express said it plans to use its marketing and omnichannel capabilities to increase awareness and acquisition for Bonobos, reach “underpenetrated categories” in men’s apparel and realize operational efficiencies across production and sourcing, logistics, real estate and technology.