Bloomberg reports that Walmart is selling its Bonobos menswear brand for $75 million – $235 million less than it paid for the brand a half-dozen years ago.
Bonobos is being sold to “WHP, owner of such brands as Anne Klein and Joseph Abboud, will pay $50 million for the Bonobos brand,” as well as a part owner of the Express retail brand.
Bloomberg writes that “the deal adds to a list of fashion flops for Walmart, which has a record of acquiring apparel businesses only to offload or shutter them later. In 2020, the company announced the sale of its footwear website, Shoes.com, and its lingerie brand, Bare Necessities. The previous year, it announced the sale of ModCloth, a women’s fashion apparel business.”
The Information writes that Walmart “once hoped it and other direct-to-consumer brands, including retro clothing brand ModCloth and plus-size fashion line Eloquii, would lure younger shoppers to its e-commerce site. But that strategy, which was led by serial entrepreneur and Jet.com founder Marc Lore, was initially plagued by heavy losses, and the company shifted its focus to its membership program and online grocery business. Walmart most recently sold outdoor brand Moosejaw, which it purchased in 2017 for around $51 million, to Dick’s Sporting Goods for an undisclosed price in February.”
This could be seen as deja vu all over again for Walmart. Bloomberg notes that “over the years, Walmart has frequently stumbled in its efforts to sell apparel beyond essential items such as socks and underwear. In 2010, the company vowed it was ‘going back to basics’ by focusing on customers’ ‘everyday needs’ after a push to go more upscale failed to gain traction.
A year later, Walmart closed its New York apparel office as part of its retrenching. ‘We don’t need to be on Broadway to sell socks and underwear and T-shirts,’ a spokesman said at the time.”
“Bonobos joined the Walmart family to expand our assortment and expertise in menswear,” Walmart said in an emailed statement to Bloomberg. “Since acquiring Bonobos, Walmart.com has grown from 70 million to hundreds of millions of items. After nearly six years, we’ve decided it’s the right time to sell Bonobos.”
KC’s View:
I know Walmart likes to talk about “always low prices,” but this isn’t exactly what it had in mind.
I remember when Walmart went on that buying spree a half-dozen years ago, acquiring a number of fashion brands that seemed out of step with its core brands. But rather than criticize Walmart for these moves, almost all of which have been undone, I’d like to suggest that it should be applauded for trying new things and making unconventional moves. If Walmart learned from the experiences, that’s a good thing. A costly lesson, sure, but Walmart can afford it.
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