Dutch Fashion, LLC has taken a minority interest in Ayr, the women’s contemporary label that was launched as an offshoot of Bonobos in 2013. The partnership is the result of Ayr’s series A financing, which closed with $5.5 million in capital, with Dutch, which owns Joie, Equipment and Current/Elliott, as the lead investor.
“We wanted to grow quickly and well and, to do so, we wanted Ayr to have its own dedicated resources and financing,” said Maggie Winter, Ayr’s chief executive officer and cofounder. “It was very important to partner with a like-minded retailer. Dutch’s portfolio of brands, especially Equipment, have an elevated, elemental, enduring aesthetic [similar to Ayr] and they they take a long-term view of their brands. They’ve built global businesses.”
For Dutch’s part, Ayr is its first venture investment. “Ayr is the first thing that really made sense for us,” said Dutch ceo Jack Schwefel. “The synergies are there. Diversifying is a great way to leverage what’s working and not working in a market place.” He pointed out that while Ayr, which has an ethos of minimalist, elevated basics and is mostly denim driven, fits within the Dutch vocabulary, it’s distinct and won’t cannibalize Joie, Current/Elliott or Equipment. Aside from the aesthetic and price positioning, Dutch was drawn to Ayr because of its direct-to-consumer potential.
Ayr, an acronym for All Year Round, launched as a vertical, primarily digital business. The concept is that there’s a core collection available year-round with novelty pieces peppered in through eight deliveries. Winter said that 70 percent of sales are done online. The brand started selling through four Nordstrom doors a year ago and expanded to eight locations earlier this month. It has plans to open in four more doors in August. The line is also carried by Shopbop. Part of the company’s NoHo offices has been turned into an appointment-only shopping space set up much like Bonobos’ guide shops. All the merchandise and sizes are available for customers to try on, but Ayr ships a fresh garment to the customer when they purchase.
“We have a really vibrant, strong wholesale business and an emerging direct-to-consumer business,” said Schwefel of Dutch’s portfolio. “A lot of the strategy for the next five years is to continue to grow and most of the growth will come from the direct-to-consumer channels domestically.”
“Dutch is really astute and sees that this industry is changing rapidly,” said Winter. “It’s a really interesting time to be in retail and they’re interested in taking a position in a vertical digital business. Those are two things that the brands in their portfolio are not and that is something we are. And they have something we don’t, which is scale and international distribution.”
The denim is priced between $175 and $225, a chambray shirt is $95 and a camel hair coat is $625. Ayr’s sales more than doubled to $2.2 million last year and are projected to hit $4 million this year.
As for the terms of the partnership, both Dutch and Ayr asserted that Ayr is a standalone business. “We’re here to help,” said Schwefel. “We already have a nice infrastructure at retail, and as they dabble in retail we can be a service for them.” Winter noted that Ayr’s ideal retail would be a low-inventory model similar to Bonobos. “We’re digitally native and brands like Bonobos and Warby Parker prove that you can create a digitally native brand that resonates with customers,” said Winter. “But we’ve also learned that touching and feeling product is still super important.”
Speaking of, Bonobos is Ayr’s other biggest investor aside from Dutch. Ayr conducted a round of seed funding in March, raising between $1 million and $1.5 million from investors including Bonobos founder Andy Dunn and Hayley Barna, venture partner at First Round and cofounder of Birchbox. Scott Morrison of 3×1 and Leandra Medine of Man Repeller are advisors. Should any of those investors want to sell their stake, Schwefel said Dutch would be willing to buy.
“We’re excited to have a bigger role down the road,” he said. “They still have some of their initial investors. If ever they want to get out, we would be more than happy to stand in.”