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Shares of apparel retailer Express Inc. soared more than 20% in extended trading Thursday after announcing a deal to buy menswear brand Bonobos from Walmart Inc. for a fraction of what the mega-retailer paid to acquire it in 2017.
Express
EXPR,
and brand management firm WHP Global announced late Thursday they are buying Bonobos for a combined purchase price of $75 million. Walmart
WMT,
bought Bonobos for $310 million in 2017 as part of a major effort to acquire buzzy online brands to boost its e-commerce business.
Walmart’s e-commerce expansion turned out to be a flop, and the retail giant has sold off many of its acquisitions in recent years, including ModCloth, Shoes.com, Bare Necessities and specialty retailer Moosejaw.
Express Chief Executive Tim Baxter said Thursday the deal will create shareholder value and spur growth. “Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realizing operating synergies and other economies of scale,” he said in a statement, adding that he expects the deal will boost Express’s operating income and be free-cash-flow positive in fiscal 2023.
Express is partially owned by WHP, which also owns brands such as Anne Klein, Joseph Abboud and Toys R Us.
Bonobos began as an online-only brand in 2007, and has expanded to about 60 brick-and-mortar locations, with 2022 net sales of more than $200 million.
Express shares soared more than 22% in after-hours trading Thursday following news of the deal. Its stock is down 34% year to date, however, and down 80% over the past 12 months.
Walmart shares were little changed in after-hours trading. The stock is up 5.4% year to date, and down 4.8% over the past year.
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