Walmart mulls selling unprofitable Modcloth and Bonobos apparel brands
Category: #retail  By Paroma Bhattacharya  Date: 2019-07-05
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Walmart mulls selling unprofitable Modcloth and Bonobos apparel brands

Walmart Inc., the American multinational retail corporation has reportedly discussed a potential sale of its unprofitable clothing brands Modcloth and Bonobos with buyers.

Apparently, in 2017, Walmart had bought a number of clothing brands including Modcloth and Bonobos and Eloqii in 2018 to attract the younger generation of shoppers with an aim to compete with e-commerce giant Amazon.com Inc.

According to sources with knowledge on the matter, all the three businesses are highly unprofitable and the overall decision to sell the brands has come after when Walmart was not able to achieve a turnaround of the company’s finances in the near term.

Modcloth will probably be sold this year, however, Walmart is planning to retain Bonobos, after thinking about a sale. Reports also mentioned that the retailer would expect losses of over $1 billion for its U.S. e-commerce business in 2019, on revenues of $21 billion to $22 billion.

Sources mentioned that in the previous month, the company had announced a comprehensive overhaul at Jet.com, an online startup which it acquired in 2016 for a total of $3.3 billion, after it was unsuccessful in meeting the e-commerce ambitions of the retailer.

Supposedly, Jet was anticipated to strengthen Walmart's reach mainly among millennial shoppers and city dwellers but the company was unable to drive online grocery sales and raise market share in urban areas.

Sources further added that Walmart had formerly stated it expects the losses from its online business, including Jet, to surge in 2019. Shares prices of the company were down around 1 percent at $110.71 a piece before the beginning of the trading day on an exchange.

If sources are to be believed, Walmart will allegedly sell ModCloth in 2019 for less than its buying price, while it could still plan on sticking to Bonobos.

 

Source Credit: https://www.reuters.com/article/us-walmart-divestiture/walmart-discussed-selling-clothing-brands-bonobos-and-modcloth-vox-idUSKCN1TY1JH



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Paroma Bhattacharya

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Paroma Bhattacharya

Paroma currently works as a content developer for Algosonline, MSF and a series of alike platforms. Fortified with a post-graduation degree in Journalism and Mass Communication, she delved head long into a writing career, creating resourceful and information enriched ...

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