Bonobos (apparel)

Bonobos

Type	Subsidiary
Industry	Retail, apparel, e-commerce
Founded	2007
Founders	Andy Dunn and Brian Spaly
Headquarters	New York City
Number of locations	48 (as of January 2018)
Parent	Walmart (2017-present)
Website	bonobos.com

Bonobos is an e-commerce-driven apparel subsidiary of Walmart headquartered in New York City that designs and sells men's clothing. The store has a specific emphasis on the sale of men's suits, trousers, denim, shirts, shorts, swimwear, outerwear and accessories. The company was founded by Stanford Business School students Andy Dunn and Brian Spaly, and launched as an exclusively online retailer in 2007.

In 2012, Bonobos diversified to incorporate physical retail locations with the launch of their “Guideshop" locations,^[1] as well as through a partnership with fellow fashion firm Nordstrom.

On 16 June 2017, Walmart agreed to acquire Bonobos for the sum of $310 million, making it a subsidiary within its fashion department.^[2][3][4] The acquisition, which coincided with Amazon's acquisition of Whole Foods Market, saw Walmart shares drop by 6%.

History

The firm was founded by Brian Spaly who began designing men’s pants while at Stanford Business School. They featured a curved waistband, a medium rise and a tailored thigh that fit better and eliminated “khaki diaper butt.”^[5] As demand grew, he and housemate Andy Dunn decided to pursue the project as a business opportunity.^[6]

Initially, the brand was launched exclusively online.^[7] Dunn cashed in his 401(k) to build Bonobos.com and raised a round of angel investment. Initial investors included Wealthfront CEO and former venture capitalist, Andy Rachleff, and JetBlue Chairman and founding Bonobos board member Joel Peterson, both of whom had lectured Dunn at Stanford Business School. Dunn then moved to New York City with 400 pairs of pants that he picked, packed and shipped from his Union Square apartment.^[8] Within six months, the firm grew to five employees and a $1 million net revenue run rate. In its first three years, the company received over $7 million in funding from angel investors. In 2009, Spaly moved on to another venture, running the Chicago-based fashion commerce company Trunk Club.

In 2010, the company received its first institutionally-driven financing round, raising $18.5 million from Accel Partners and Lightspeed Venture Partners. As part of the round, Accel Partners’ Sameer Gandhi and Lightspeed Venture Partners’ Jeremy Liew joined Bonobos’ board.^[9]

As Bonobos expanded its assortment to include suits, dress shirts, outerwear and tailored pieces, more customers requested the opportunity to “try before they buy”. In fall 2011, the company tested an e-commerce store at their New York City headquarters, calling the location a Guideshop.^[10] The purpose of the Guideshop location was to provide a physical space for men to try on Bonobos prior to e-commerce transactions being placed. Within a year, the concept became an integral part of the firm's service and business model.^[11]

In 2012, Bonobos closed a $16.4 million strategic minority investment round led by Nordstrom,^[12] with participation from existing investors. In tandem, Bonobos partnered with Nordstrom^[13] to sell the brand’s clothing in their full-line stores and their website. Bonobos furthered its offline reach in May 2012, opening its first standalone Guideshop location in Boston.^[14] By January 2013, Bonobos had opened additional Guideshop locations in Chicago,^[15] Georgetown^[16] and San Francisco.^[17]

Bonobos announced a $30 million round in 2013, with Glynn Capital and Mousse Partners joining existing investors Accel Partners, Lightspeed Venture Partners, Forerunner Ventures and Nordstrom. At this time, Forerunner’s Managing Partner Kirsten Green joined the Bonobos board and total funding to date reached nearly $73 million.^[18] Simultaneously, the company launched the golf brand Maide,^[19] which is the second brand launched by the Bonobos team. By August 2013, Bonobos had opened Guideshop locations on Crosby Street^[20] in New York City, Bethesda, MD,^[21] and Austin, TX,^[22] bringing total location count to eight. By August 2013 employee headcount reached 175.

In June 2017, Walmart announced it was purchasing the brand for $310 million in cash. The brand will not be sold in the Walmart stores, instead it will be sold on Walmart's recently purchased Jet.com. Bonobos CEO Andy Dunn remained with the company after the purchase.^[23]

Operations

Bonobos "Ninjas" are a team of customer service representatives tasked with providing quality customer service for the company’s e-commerce site.^[24] Dunn conceptualized the name to attract college-educated qualified candidates to the job and to emphasize Bonobos’ desire to provide great customer service.^[25] Bonobos Ninjas interact with customers through phone, email, chat, and social media.

It has been covered in national publications such as The New York Times,^[26] USA Today,^[10] CNBC, The Boston Globe,^[27] Chicago Sun Times,^[28] San Francisco Chronicle,^[29] among others.

Technology

In early 2012, Bonobos opened a West Coast office to build a Silicon Valley-based technology team, in an effort to expand its nationwide retail presence.^[30] Following 18 months, the firm attempted to minimise inefficiencies by eliminating bi-coastal offices, which were then redundant. Hence, in 2013, Bonobos relocated the technology arm to its New York City headquarters.^[31]

References