Walmart Inc is selling menswear brand Bonobos to Express Inc and WHP Global for $75 million, a far lower price than what it paid nearly six years ago.
Bonobos, which Walmart acquired for $310 million in June 2017, sells menswear ranging from suits and trousers to swimwear online.
The deal marks the first acquisition since brand management firm WHP Global, which owns Toys “R” Us and fashion labels such as Anne Klein, partnered with Express earlier this year and took a 7.4% stake in the clothing retailer.
WHP Global will acquire the Bonobos brand for $50 million, while Express will acquire the operating assets and assume related liabilities of the Bonobos business for $25 million, the companies said on Thursday.
Shares of Columbus, Ohio-based Express rose about 22% to 82 cents in extended trading.
While Walmart purchased Bonobos in a bid to build a cachet of upmarket online brands and attract young shoppers, the retail giant struggled to make the brand profitable and laid off dozens of employees in 2019.
Walmart has more recently concentrated on building out alternative revenue streams such as advertising and delivery than adding brands to its assortment.
“We’re now in a phase that is less about scaling… eCommerce assortment… and more about execution and operating margin improvement,” Walmart CEO Doug McMillon said at its investor meeting last week.
Express in March reported a 14% fall in fourth-quarter sales at $514.3 million, hit by weakness in its women’s business. Meanwhile, its men apparel division posted a record year, gaining market share in denim, knitwear and chinos categories.
The deal is expected to close in the second quarter, following which WHP and Express will enter into an exclusive license agreement, giving Express the right to use the intellectual property acquired by WHP to run the Bonobos business.