New York (CNN) Clothing is sometimes sold at a deep discount on Bonobos. Thursday night, the company itself traded for a loss.
Walmart announced it is offloading the fashion menswear brand, selling it to management firm WHP Global and retailer Express Inc. for $75 million. That’s a steep loss for Walmart, which acquired the brand in 2017 for $310 million as part of a failed attempt to diversify its online presence under previous management.
WHP Global is a little-known company that owns several recognizable brands, including Toys “R” Us, Anne Klein and Joe Jeans. Last year, WHP acquired a 60% stake in Express Inc. WHP bought the Bonobos brand for $50 million, while Express Inc. acquired “operating assets and assumed related liabilities” for $25 million.
“Bonobos has delivered double-digit sales growth and we plan to continue that momentum while also realizing operational synergies and other economies of scale,” said Tim Baxter, CEO of Express Inc. in a statement.
Express (EXPR) shares opened 20% higher on Friday. The deal is expected to close later this year.
For Walmart, the disposal of Bonobos means that it will tighten its focus on its core retail business in anticipation of a rocky economic environment ahead. In a note, Neil Saunders, managing director of GlobalData, wrote that the discounted price for Bonobos “reflects the current weak outlook across retail, but some are also the result of Walmart not doing anything in developing the brand over the past six years.”
Bonobos is a better fit for WHP and Express Inc., Saunders said, because they have a stronger focus on fashion and an established global presence to help the 16-year-old brand in outside the country. For Express Inc., it’s a “welcome diversification from a core business that’s heavily exposed to the slow middle market,” he said.