Bonobos, the online-only men’s pants retailer that has defied the recession, is to receive $3 million from a consortium led by Colin Evans, co-founder of Stubhub.com.
Consortium members received a total 16 percent stake in the start-up, which company executives said is ahead of its 2009 projection to gross $6 million. Bonobos plans to use the funds to expand into new categories such as shorts, knit shirts and swimwear, as well as bolster customer service and invest in its Web site, bonobos.com.
“Men don’t enjoy shopping or stores, so we have to deliver a product they want from people they trust,” said Andy Dunn, the brand’s co-founder and chief executive officer. “We want to build a world-class online experience.”
The investment reinforces the relevance of the original concept: to sell better-fitting casual and dress pants to the premium customer, but at lower prices than brick-and-mortar retailers. Most Bonobos styles retail for about $130.
“There was a hole in the men’s shopping market,” said Dunn, adding that the brand broke even in its first full year. “Our vision is to build a 100 percent Web-driven, premium men’s brand. We wouldn’t have been able to raise $3 million if it weren’t working.”
Since launching in October 2007, the Web site has sold 20,000 pairs of its body-hugging pants to more than 8,000 customers, who on average own four pairs of Bonobos, Dunn said. It has ramped up staff to 15 employees in recent months, hiring a new head of design, Brett Wagner, formerly of Vineyard Vines, and a new technology chief, Dustin Vain, from Zappos.com. Top-line growth has continued in 2009. Bonobos’ first-quarter revenue beat last year’s quarterly results by more than 400 percent, according to the company.
That’s attracted attention from media and traditional retailers, who have asked to sell the company’s pants in their stores, Dunn said. Bonobos declined.
But the company will face growing pains if it continues to expand at its current rate. Dunn said Bonobos could outpace capacity at its New York City-based manufacturers within six months, prompting the company to find additional partners overseas. The brand also will test its elasticity when the company rolls out knit shirts, shorts and swim this summer.
But Dunn believes he’s found a manageable — if unique — model for selling apparel to men.
“Traditional retail is bad business,” he said. “It’s like getting into acting. In our structure we don’t have to share economics with Barneys.”