Walmart Inc went through talks with potential buyer for selling its loss-making clothing brands ModCloth and Bonobos, according to a Wednesday report by online news portal Vox, citing sources familiar with the matter.
Bought in 2017, ModCloth and Bonobos are two of Walmart’s biggest e-commerce acquisitions in the past two years. In quest of luring younger shoppers to better compete with archrival Amazon.com Inc, Walmart also made acquisition of a bunch of other clothing brands like Eloquii in last year and Parcel, Hayneedle, Art,com, Moosejaw and Bare Necessities included in that string of acquisitions.
ModCloth, Bonobos and Eloquii all three businesses remained failed to make profits, according to Vox’s report, and Walmart’s decision to sell these brands came after the company has found no other way to turn over its economics in a shorter term, it said.
The women’s clothing site ModCloth, which Walmart purchased for an estimated amount of $50 million in 2017, will likely to be sold this year, according to a report by Jason Del Rey from Vox, citing multiple sources.
On the other hand, Walmart, for now, has abandoned the potential sale of men’s clothing brand Bonobos, it had bought for $310 million in 2017, after holding talks with a private-equity firm interested in purchasing the same.
The Vox report also noted that the world’s largest retailer is estimating its U.S. e-commerce division making losses of $1 billion on revenue of $21 billion to $22 billion in 2019.
Walmart at Jet.com, an online startup it purchased in 2016 for $3.3 billion, is planning a sweeping overhaul by moving all Jet employees to Walmart.com with Jet’s President Simon Belsham also to be stepped down in the process. The last month announcement came after Jet’s failure to live up to the expectations of Walmart’s e-commerce goals.
Walmart had previously unveiled its concerns that its online units, including Jet, will be making more losses in 2019.