A surge of male-focused retail start-ups is flooding the market, vying for a piece of the swelling men’s wear business, which generated $440 billion in sales in 2014, according to Euromonitor.
Many, but not all, of their founders are following the Bonobos blueprint: disrupt the market with a unique product or concept; sell directly through e-commerce; open brick-and-mortar spaces, and consider wholesale.
Although it isn’t profitable yet, Bonobos has been able to steadily grow its business over the years using that strategy. Trunk Club, a men’s shopping service, has also been able to scale its company with help from Nordstrom, which purchased the business last year for a reported $350 million.
Whether or not the newer start-ups can mimic these upward trajectories is yet to be seen, but investors and analysts polled by WWD believe these five companies have a shot at it.
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1. Frank & Oak
Frank & Oak is doing what many media companies are aspiring to do: sell product alongside content. Every month the Canada-based company presents new merchandise and content that targets the Millennial male who is interested in elevated basics priced from $15 to $300, as well as guidance on how to wear those basics. The start-up provides those tips via its online and in-store personal styling services.
Cofounder Ethan Song, a former Deloitte employee who launched the business with Hicham Ratnani in 2012, said this monthly model trains the male customer to shop more frequently and allows Frank & Oak to make product changes based on sell-through rates much faster. The monthly collections feature small production runs that are available for 60 days, but typically sell out in 45 days, according to Song.
“Frank & Oak definitely has strength in offering a similar service to Trunk Club but at a much lower price point,” said Tiffany Hogan, apparel analyst at Kantar Retail.
The company has raised a total of $21 million in funding from investors including Goodwater Capital, Rho Canada Ventures, Real Ventures and Lightbank. The start-up is using that money to maintain its retail ecosystem that includes two flagships and four pop-ups spread throughout Canada, a mobile app and its e-commerce site. It will also expand into the U.S., which accounts for 70 percent of its purchases, and is considering pop-ups around the U.S.
2. The Black Tux
The Black Tux, the male answer to Rent the Runway, has raised $15 million, which was led by First Round Capital, since starting in 2013. Founded by Andrew Blackmon and Patrick Coyne, the start-up is aiming to reinvent the tuxedo and suit rental industry by offering an online service that provides private-label suits and tuxedos made from premium fabrics sourced in Italy. Shoppers can either rent a suit, which costs $95 to $125, or a complete look for $155, and The Black Tux will ship it to the shopper a week before his event.
The concept has resonated with investors, who Coyne said he had to turn away during the latest round of funding. He attributes the start-up’s popularity to creating a service that’s substantially better than what’s available. Pravin Vazirani, the managing director and general partner at Menlo Ventures, which invested in The Black Tux, said he was impressed by the start-up’s ability to create “a delightful consumer experience in an industry that’s been slow to innovate and move online.”
“The concept behind The Black Tux seems like a huge miss for either Men’s Wearhouse or Rent the Runway to not have capitalized on at this point. This may be more of a niche market play, but I definitely think it’s scalable within that market,” said Kantar Retail’s Hogan.
The start-up has a showroom in Los Angeles and recently partnered with New York-based bridal brand Stone Fox Bride on a showroom space within its SoHo store. Creating enough inventory to fulfill the demand — Coyne said 30,000 people were placed on a waiting list during the 2014 wedding season — is the primary focus this year. Will the company follow in the footsteps of Rent the Runway and move beyond formalwear or open stores? Coyne said expanding into other categories is a possibility down the line, but opening brick-and-mortar locations is a more immediate goal.
3. Outfittery
Started by Anna Alex and Julia Bösch in 2012, this Berlin-based start-up is similar to the Trunk Club. Men sign up, answer questions, and a personal stylist sends outfits that meet their preferences. But, according to Bösch, Outfittery is more accessible than Trunk Club and offers a broader range of product and brands, which include Levi’s, Gant, Calvin Klein and Converse. “We really bring personal shopping to every man,” she said.
Another difference is its geographic market. Outfittery only services parts of Europe, which Kantar Retail’s Hogan said could be appealing to Nordstrom and Trunk Club.
“I could see this being scalable as a partnership or purchase opportunity for Nordstrom and the Trunk Club to broaden its reach into the European market,” she said.
This past March, the start-up raised $20 million in funding led by Northzone, a Swedish venture capital boutique firm known for investing in music streaming service Spotify. A year ago it raised $14.5 million in funding. Hans Otterling, a partner at Northzone, said the group invested in the business because it believes that “curated shopping is the next evolution of e-commerce.”
Alex and Bösch have expanded the start-up’s reach — the service started off in Germany but is now available in Austria, Switzerland, the Netherlands, Belgium, Sweden and Denmark.
4. Mizzen+Main
The performance shirt isn’t a new concept, but Mizzen+Main’s cofounder and chief executive officer Kevin Lavelle said his brand’s Made in the U.S. dress shirts, which feature antiwrinkle, moisture-wicking fabric with four-way stretch, sit in a product category that doesn’t exist.
Retailers and investors alike have latched onto the shirt, which is priced at $125. Stockists include Bloomingdale’s, Stanley Korshak and Saks Fifth Avenue, where Mizzen+Main hosted a Super Bowl-themed pop-up at the New York flagship in 2014.
David Schottenstein, who founded bespoke men’s wear brand Astor & Black, which he later sold, invested in Mizzen+Main because he didn’t see any comparable performance dress shirts on the market. “Some people aren’t going to stop wearing Kiton or Tom Ford shirts, but most men out there are looking for shirts that are comfortable and have a good cut. To me, this is where clothing is going,” he said.
According to Al Sambar, a retail strategist at Kurt Salmon, product innovation is where many start-ups lag. “Most of these guys come out with a business concept that disrupts the market, but to survive and grow bigger they will have to get into product innovation,” he said.
The start-up has raised $1.25 million since 2012 and expanded the collection to include Henleys, denim and jackets and has a showroom at its headquarters in Dallas.
5. Greats
According to The NPD Group, the U.S. men’s footwear market grew 8 percent in both 2013 and 2014, and sneakers helped drive that growth. Greats, a vertical start-up that sells men’s sneakers, is capitalizing on the trend by offering high-quality footwear at an affordable price. Ryan Babenzien and Jon Buscemi, two footwear veterans who worked at Puma and DC Shoes, respectively, started the business in 2013 with two styles. The site now carries 10 styles that range from $59 to $159.
The start-up raised $4 million in Series A funding earlier this year. Michael Hirshland of Resolute Ventures, which invested in the brand, said Greats is appealing because of its strong brand identity (“Born in Brooklyn, Made in Italy”) and shoe designs that target a large swath of customers. “With the margins enabled by a direct-to-consumer model, we believe they have a real opportunity to create a valuable and sustaining brand,” Hirshland said.
Babenzien, who projected $6 million to $8 million in sales this year, said keeping inventory in stock and building customer awareness is top of mind. Greats is attempting to expand the brand’s reach with high-profile fashion collaborations. It’s designed lines with Nick Wooster and Italian men’s wear brand Lardini, New York-based line Orley and skate brand Only NY. The company is also creating awareness with a recent deal with Mr Porter, which will start carrying Greats sneakers later this month.
The brand currently has a store in Williamsburg, Brooklyn, but Babenzien said more retail spaces are planned.