Andy Dunn’s horizons have broadened.
Having spent 10 years as chief executive officer at Bonobos, nurturing the bottoms business through several phases — from digital-native pioneer to wholesale partner to specialty retailer (minus the inventory) — Dunn is now looking to take the brand to the next level.
That includes a step-change in marketing ambitions for the brand, which has gone from trying to reinvent how men buy pants to jumping into the larger cultural conversation about just what it means to be a man.
And that’s only one of the plates Dunn now has spinning.
Since he sold Bonobos to Walmart Inc. for $310 million last year, Dunn also has also taken ModCloth under his wing and is looking to bring more digital native brands into the fold.
If he succeeds in gathering up the digital natives and forming a multibrand group, it will mark a new phase in the segment, where entrepreneurs have built a plethora of hip brands in everything from boots to bags to basics, but have not blazed a clear path to profitability.
That’s left an opening for Dunn, and Walmart, which brings a new set of virtues to the digital native proposition, including massive scale and a fully fleshed out infrastructure.
Just how aggressively Walmart grabs that opportunity remains to be seen. The retailer went on an acquisition tear, buying Jet.com, ModCloth, Shoebuy, Moosejaw and Bonobos and has been spending some time digesting.
But Dunn said more is on the way — although Bonobos needs to be onboarded first.
“Since summer, we’ve really focused on getting the company up to speed on why we did it, why we actually feel [Bonobos is] a really unique fit with Walmart, which is something that I think to our largely Millennial employee base from Brooklyn, comes as a new idea,” Dunn said.
“The first chapter was just doing the deal,” he said. “The second chapter was making sure the culture of the company stayed intact.”
Walmart’s quick turn on $20 million in aid for people impacted by Hurricane Harvey and its continuing drive to raise wages for its employees helped turn some hearts and minds, he said.
The deal with Walmart was signed last June and by fall, when the brand held its annual Camp Bonobos retreat, Dunn said the ice was breaking.
“It was the most fun I’ve ever had at that event,” he said. “It felt like I could relax because our company had a safe and permanent home.”
Beyond helping to keep the lights on, the deal with Walmart brought in a supersized backend, including HR, finance and legal, but Dunn said the brand stands on its own. Same goes for ModCloth and any new brands that might be brought on board.
“Part of the vision for this is that, if you want brands to thrive on such a larger stage with this bigger environment with a huge parent company, you don’t want to squash those brands,” he said. “And that was part of the conversation I had with Doug [McMillon, Walmart’s president and ceo], who had this way of saying it, which is, ‘We don’t want to bear hug you guys to death.’ Part of my job in this new world is to make sure that the brands that we bring on can maintain their autonomy. They can still be fresh, innovative, say what they want. We will, over time, be active, but we’re in our first six months…as we get settled in, we’ll be looking to the market and figuring out what’s next.”
The outlines of what’s next for Dunn’s budding digitally native empire are at least starting to become a little more clear.
The idea is that online brands that have developed on their own, solving every problem from soup to nuts, can within a larger infrastructure focus more on what makes them different and less on, say, accounting or legal issues.
“Everyone is re-creating a lot of the same elements to the experience, the technology stack, the customer service stack, the fulfillment stack. Everyone’s going through the same processes, we all use the same third-party vendors for fulfillment, we all have gone through the journey of how do we do the technology and the e-commerce,” Dunn said. “Now there are amazing things out there, like Shopify, where it’s become a little bit turnkey, but folks are going through that process.
“And I think it’s not just the actual infrastructure, it’s the know-how and the talent, we’re all doing this independently,” he said. “People share information through little casual dinners and iterations and coffees and text messages. I’ll text Neil [Blumenthal] from Warby [Parker] and be like, ‘Hey, what do you think of this street, how’s your store doing?’ But it’s very much an informal network right now. It’s an informal community and taking that and — for me, maybe the thing I’m most excited about the multibrand dream is to actually create a community that isn’t just informal among all these companies, but that its more formalized amongst the collection we want to build.”
Having more brands will open up more opportunities both outside the group and within — for instance, helping employees cross-pollinate and grow their careers as they jump from one brand to another, something that’s starting to happen already between Bonobos and ModCloth.
Larger collections of brands have a mixed track record — Liz Claiborne Inc. and Jones Apparel Group of yesteryear faded away while VF Corp. and PVH Corp. have grown — but Dunn said the key is keep the brand pure and be careful just what the different businesses share.
“You actually want as many people carrying a card for the brand as you can,” said Dunn, noting for instance that the people working in sourcing should be dedicated to a brand — something that wasn’t necessarily case at Claiborne or Jones. “You want this concept of shared services and resources to be as small as possible, which is the opposite of the way that a private equity investor might think about it which is how do we get synergies out of the cost.”
At the core of it all are Dunn and Bonobos, which has 48 guide shops and is going to add about 18 this year, continuing last year’s pace. The brand has about 200 employees in its Flatiron headquarters in Manhattan and another 200 in the field.
The brand is still under the same pressure to perform that it was as an independent company and Dunn has his sights set high.
“I like to say…that it takes a decade to build a great brand,” Dunn said. “At the very least, Bonobos is an important brand. It probably takes another decade or more to build an iconic brand. We feel like we’re just getting started in so many ways.”
He pointed to research showing that 95 percent of guys in the brand’s target demographic of 25 to 45 don’t know the brand.
“So we feel like we have a ton to do,” he said. “We feel like we’re under a ton of pressure to continue to do it, we put that pressure on ourselves.”
To keep pushing the brand forward, Dunn is engaging in much bigger discussion and to get the ball rolling has connected with Chris Mosier, the first transgender athlete to compete in an International Triathlon Union championship, in 2016. (Dunn held a fireside chat with Mosier online last month and has featured him on brand’s web site).
Dunn said he was taken with Mosier’s personal journey, his sense of self and sense of gender and wanted to amplify his story and explore the broader issues.
“That, to me, is the future of Bonobos,” he said.
“We’ve spent a decade focused on how do we deliver great fit and great service in men’s wear, but beneath it has been this story about the evolution about what it means to be a man in this modern world and all the ways that those definitions are radically changing on so many fronts for men of all types and the way that our relationship to women is changing,” Dunn said. “That’s the goal for the next 10 years — is to really be, in whatever way we can, a small part of that conversation.”