Walmart (WMT:NYE) has announced the sale of its apparel brand Bonobos for a total of $75 million to WHP Global and fashion retailer Express (EXPR:NYE). Walmart originally purchased Bonobos in 2017 for $310 million, so this represents a substantial discount. WHP Global will pay $50 million for the Bonobos brand, while Express will pay $25 million for the operating assets and liabilities of the company.
In an endeavor to expand its online business, Walmart acquired a number of apparel and fashion brands, including Bonobos. However, many of these acquisitions fell short of expectations, resulting in Walmart selling them at a discount. Prior to the sale of Bonobos, Walmart sold Moosejaw to Dick’s Sporting Goods and ModCloth, a women’s apparel company.
The company has been shedding non-core enterprises and brands in an effort to improve efficiency and accelerate growth. Walmart recently shut down four Chicago stores, citing unprofitability. Walmart intends to achieve unit cost improvements through supply chain innovation, with a target of a 20% improvement in unit cost averages.
Walmart Stock Forecast:
Despite the company’s efforts to increase efficiency and growth, the Walmart stock forecast shows that it has a consensus rating of Strong Buy. The average price target of $162.18 suggests an upside potential of 10.17 percent.
