Express and owner WHP Global have entered a definitive agreement to acquire Bonobos from Walmart for a combined purchase price of $75 million, including $50 million for the Bonobos brand and $25 million for the operating assets and related liabilities of the Bonobos business. The deal marks the first joint acquisition made by WHP Global and Express since finalizing their strategic partnership earlier in 2023.
Walmart is parting with the menswear brand at a significant loss — the retail giant acquired Bonobos for $310 million in 2017 as part of a successful push to boost its digital sales. Walmart’s digital sales have risen steadily since then, including 12% annual growth in fiscal 2022, and it has recently expanded its online offerings to include an ecommerce site and customer experience aimed at SMBs as well as an overall revamp of its digital storefront with an emphasis on discovery.
Express plans to leverage its own strengths in the men’s fashion space to boost Bonobos’ presence in underpenetrated categories as well as drive greater brand awareness and customer acquisition. Bonobos will become the third brand in the Express portfolio, joining Express and UpWest, and will synergize with the existing brands to drive financial efficiencies, operational synergies and additional economies of scale across production and sourcing, logistics, real estate, technology and other areas.
The addition of Bonobos also could help Express, which is in danger of being delisted from the NYSE, to turn its fortunes around. Net sales for Q4 2022, which ended Jan. 28, 2023, fell 14% to $514.3 million.
“Our strategic roadmap to transform Express to create shareholder value includes achieving profitable growth in our core Express business — which is our first priority — optimizing our omnichannel platform, and accelerating our growth and profitability through our partnership with WHP Global,” said Tim Baxter, CEO at Express in a statement. “Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realizing operating synergies and other economies of scale. 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.”
CEO John Hutchison will take on the role of Brand President of Bonobos and report directly to Baxter once the transaction is completed, slated for Q2 2023. Bonobos will remain at its current headquarters in New York.
“This is an exciting moment for Bonobos as we embark on the next phase of our growth,” said Hutchison in a statement. “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.”