US' WHP Global & EXPR to jointly acquire Bonobos for $75 mn

WHP Global will acquire the Bonobos brand for a purchase price of $50 million. EXPR will acquire the operating assets and assume the related liabilities of the Bonobos business for a purchase price of $25 million, EXPR and WHP Global said in a joint press release.

Tim Baxter, EXPR chief executive officer, said, “Our strategic roadmap to transform EXPR to create shareholder value includes achieving profitable growth in our core Express business—which is our first priority—optimising our omnichannel platform, and accelerating our growth and profitability through our partnership with WHP Global.

“Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realising 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 become brand president of Bonobos and report to Tim Baxter after the transaction closes. Bonobos will remain at its current headquarters in New York.

“Bonobos is an ideal first acquisition for our new partnership with EXPR and will be a terrific addition to our fashion vertical. Post-closing, WHP Global’s portfolio will include more than 10 powerful consumer brands approaching $7 billion in total retail sales,” said Yehuda Shmidman, WHP Global chairman and chief executive officer.

“This is an exciting moment for Bonobos as we embark on the next phase of our growth. Born a digitally native vertical brand, we plan to build on our strength in e-commerce and customer loyalty, leverage EXPR’s expertise in omnichannel retailing and scale through WHP Global’s partnerships in licensing and distribution,” said Bonobos CEO John Hutchison.

The transaction is expected to provide several strategic and financial benefits.

EXPR plans to leverage its strength in men’s to address underpenetrated categories, and its strength in marketing to drive greater awareness and customer acquisition.

Bonobos will be the third brand in the EXPR portfolio, joining Express and UpWest. It is expected to be accretive to operating income and free cash flow positive in fiscal 2023, accelerating sales growth and profitability.

EXPR expects to leverage its platform to drive financial efficiencies, operational synergies, and additional economies of scale across production and sourcing, logistics, real estate, technology, and other areas of its existing and new businesses.

Concurrent with the closing of the transaction, WHP Global and EXPR will enter into an exclusive long-term license agreement with multiple renewal options granting EXPR the right to use the intellectual property acquired by WHP Global for the operation of the Bonobos business in the US in exchange for EXPR’s payment of a royalty fee to WHP Global. The transaction is expected to close in EXPR’s second fiscal quarter of 2023, subject to customary closing conditions.

ALCHEMPro News Desk (NB)