Randa Apparel & Accessories has made an acquisition to enhance its digital capabilities.
The New York-based firm, which is the largest manufacturer of men’s accessories and also owns the Haggar brand, has purchased the technological assets of Bombfell Inc. for an undisclosed sum.
Bombfell, founded in Silicon Valley in 2011, is a venture-backed personal styling subscription service. Under the terms of the deal, Randa will add Bombfell’s founders — Bernie Yoo, Jason Kim and Sarah Lee — to its team. The subscription service will close down by the end of October.
Heath L. Golden, executive vice president and chief financial officer of Randa, said the Bombfell team will officially join Randa on Nov. 2 after it winds down the subscription service business. He stressed that Randa acquired the assets of the company, not an ongoing business, although he didn’t rule out the possibility of one day offering a subscription service for Haggar or one of its other brands. But the immediate focus is on Bombfell’s “technology stack,” he said, or its robust e-commerce platform, customer file, knowhow and source code that it spent a decade and millions of dollars to build.
“Our acquisition of these assets from Bombfell and the hiring of its founders is a key pillar in our strategy to seize upon the accelerated growth in digital demand resulting from changes in consumer behavior during the COVID-19 pandemic,” Golden said. “Our acquisition thesis was fivefold. First, to serve our growing need for high-quality, data-driven decision-making. Second, to hire exceptional digital talent and data scientists to explore and exploit our consumer’s increasing digital demands. Third, to acquire a best-in-class e-commerce platform built and refined over a 10-year period at a significant expense. Fourth, to accelerate our online direct-to-consumer business units. And finally, to provide our wholesale customers with another Randa tool to improve their, and our, sales, turn and profitability.”
Bombfell had generated nearly $100 million in revenues and had more than 1 million members.
Golden explained that not only will Bombfell’s algorithms help its owned brands, which also include the Tribal women’s label, but its wholesale customers — Kohl’s, Macy’s, Amazon and others — will also benefit.
Golden said Bombfell had operated a “very successful” subscription service with J.C. Penney where personal stylists selected items from the store’s big and tall men’s assortment that were sent to customers who opted into the service. The yearlong relationship “drove industry-leading purchase rates, extraordinary customer loyalty and retention rates, and yielded an average unit selling price at twice the retailer’s average,” he said.
Although the relationship ended last year, Golden said the results proved the viability of the technology. “They understand how to drive people through the funnel to purchase more frequently,” he said of the Bombfell team.
“Joining the Randa team allows Jason, Sarah and myself to focus on developing technology, data science and tools that drive consumer engagement,” Yoo said. “Randa’s leadership and scope in men’s, women’s and children’s apparel and accessories and deep partnerships across the retail spectrum provides us with the resources, reach and relationships to leverage everything we’ve learned at great scale and speed.”
Golden said the acquisition of Bombfell fits into Randa’s strategy of developing “transformative business models” to help it continue to grow. Like nearly every other company in the fashion industry, Randa was severely impacted by the pandemic and was forced to cut costs, furlough workers and institute permanent job cuts.
But there were some bright spots, Golden said. The Haggar online business has doubled during the pandemic and the brand — which is the number-one seller of dress pants in North America — is launching loungewear and increasing penetration in its Cool Right casual and performance bottoms.
Golden also cited the strong performance of slippers — presumably a comfortable alternative for those working from home — and Randa launched a PPE program, which will generate more than $50 million in revenues for face masks and other related products this season.
And while more business-related categories continue to be challenging, “we’re interested to see how fall goes and we’re looking forward to a good 2021,” Golden said.
The privately held Randa was founded in 1910 and sells more than 100 million units of men’s accessories a year from 30 brands including Levi’s, Tommy Hilfiger, Columbia Sportswear, Calvin Klein, Cole Haan, Dickies and Kenneth Cole.