Express shares soar on Walmart Bonobos deal
Walmart paid $310M in 2017 to acquire the online retailer of menswear
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Shares of Express are higher on Friday after the fashion and apparel company purchased the menswear brand Bonobos from Walmart for $75 million in partnership with global brand management firm WHP Global.
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.
Walmart bought Bonobos for a much larger price tag of $310 million back in June 2017.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| EXPR | EXPRESS INC. | 1.47 | -0.81 | -35.53% |
The deal marks the first acquisition since WHP Global partnered with Express in early 2023 for a 7.4% stake in the clothing retailer.
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Despite Walmart taking on Bonobos to lure young shoppers, the world's largesr retailer struggled to make the brand profitable and laid off dozens of employees in 2019.
Bonobos store exterior
Under the current economy, Walmart is now concentrating on building out alternative revenue streams, such as advertising and delivery, rather than adding brands to its assortment.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 59.27 | -0.38 | -0.64% |
In March, Express reported a 14% fall in fourth-quarter sales at $514.3 million as the women's business struggled, while the men’s apparel division posted a record year, gaining market share in denim, knitwear and chinos categories.
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The deal is expected to close in the second quarter, after 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.
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Reuters contributed to this report.