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Sitting at the Bonobos headquarters near Madison Square Park one spring morning, the brand's 36-year-old co-founder wears a floral button-down under a perfectly tailored blue blazer with squeaky clean white sneakers and patterned socks. Sipping from a novelty mug that looks like a camera lens, he leans against a wooden coffee table topped with a stack of the most recent Bonobos catalog, copies of The New Yorker and Vanity Fair, and a pocket edition of the Tao Te Ching. He’s exactly who you would imagine would run a hip menswear company.
"Growing up in Chicago, we were pretty laid-back," he says. "Clothes were more about comfort and being casual, so for me, Bonobos was a really easy brand to fall in love with creating. It was about how to get clothing to guys like me, who are not going to spend a lot of time figuring it out."
Last week, Dunn stepped aside as Bonobos' CEO, assuming a position as executive chairman to make way for Francine Della Badia, a former executive at Coach and Victoria’s Secret. Over email, Della Badia told Racked she was excited to join the company's ranks: "Bonobos has disrupted the marketplace by truly merging the online and offline experience. Andy has created a brand with a compelling lifestyle story and a product that men love, so there is a tremendous opportunity for continued growth."
Dunn admits, with a grin, that stepping down as the startup's number one is daunting. But between gearing up for Bonobos' first flagship store (set to open in New York City's Flatiron District next week) and watching the company’s celebrated women’s line AYR expand into more categories, Dunn is eager for his company's next act.
"I think it will be hard to let go of this role," he continues. "At the same time, it's been a really hard job. I’m ready to share that role with someone who has a lot more experience than I do. My dream is that Bonobos is going to have a 30-year run to become the leading multi-brand, digitally innovative company."
Dunn started Bonobos with a very simple goal—make men’s pants that actually fit. As he explains it, the hole the brand would fill was hard to miss: "American pants were too boxy and European pants were too tight."
"American pants were too boxy and European pants were too tight."
While traveling in South America with friends from Stanford Business School, Dunn came across a tailor with a unique way of altering men's waistbands. For months, he and his buddies Brian Spaley (Dunn's co-founder) and Bryan Wolff (the brand’s former CFO) worked on prototypes that reimagined the way pants could fit. The trio launched Bonobos in 2007 with a single product, a pair of corduroys. They were an immediate hit.
"The innovation was a curved waistband," he says. "As you wear your belt, it starts to curve so why didn’t we make pants like that? Having the curved waistband actually made it more anatomically correct in the market. And our pants were not too tight, but not too loose on the thigh."
At the time, Dunn found himself obsessed with the internet; Bonobos debuted right when Facebook began to explode and shopping sites like Zappos were doubling their annual revenue. So rather than start another traditional fashion brand with brick-and-mortar stores or wholesale accounts, the founders decided to launch the brand online.
E-commerce was very much the Wild West in 2007—this was years before Warby Parker and Everlane would hit the scene—but Bonobos was able to build its business with some relatively modest funding. Dunn cashed out his 401K (before Stanford, he worked as a Bain consultant and then a private equity analyst) to get the company off the ground, and the brand raised almost $4 million in angel rounds in 2008 and 2009. Bonobos has enjoyed rapid growth since its inception, and from 2010 to 2011, the brand’s annual revenue jumped from $9.5 million to $19.6 million. By 2013, revenue had sped ahead to a whopping $69.3 million, according to PrivCo.
"Online shopping has gotten so much better and Bonobos is one of the companies that helped it."
Starting with just an online shop was risky, but it proved to be the perfect vehicle for men to "dip their toes in the water," without getting too overwhelmed, notes Joe Weber, editor of men’s style site Dappered.
"This was instead of committing to a two-hour shopping trip and then coming home with nothing and feeling like you wasted your day," he says. "How many ugly shirts and bad pairs of shoes do stubborn guys have to buy to feel like they’ve completed their shopping? Today, online shopping has gotten so much better and Bonobos is one of the companies that helped it."
Bonobos earned the trust of male shoppers, Weber adds, by becoming known as the retailer that sold perfect pants and continued to improve upon its products.
"Bonobos balances both being fashion-forward and simple in style," he continues. "They pounded away at the geometry of having their pants be different and now they apply that to everything across the spectrum. They also know how to have fun. I think they appeal to a lot of guys because there is still a stigma that if you’re overly concentrated on how you look, you’re shallow. Bonobos wants their customers to look awesome without looking like they try too hard." A.T. Kearney retail strategist Mike Moriarty reckons Bonobos is now the "new Dockers"—and he means that in the best way possible.
When the brand expanded beyond its initial pants offering to enter into other categories—it currently sells shirts, jeans, suits, outerwear, T-shirts, ties, belts, and socks—it began to focus extensively on fit. Dunn likens this strategy to "getting as close to custom clothes as you can get without it being custom." Between all of its styles, sizes, cuts, and colorways, Bonobos currently sells 140 different pants options and 230 shirt choices. Suit jackets and blazers come in 30 variations, and swim trunks are offered in three different lengths (5, 7, and 9-inch). In March of 2013, Bonobos even launched its own golf brand, Maide.
"Bonobos pants are like a guy’s push-up bra—everything somehow gets pushed right where it needs to go."
The sheer variety is what's attracted many loyal Bonobos shoppers, like Nick Guglietta, a 28-year-old D.C. resident and IT professional. He appreciates that the brand offers pants with 31-inch waists, an off-size not stocked in most other stores. As a result, the fit is impeccable.
"Bonobos pants are like a guy’s push-up bra," Guglietta laughs. "I don’t know if they do it with their fabrics or their tailoring, but everything somehow gets pushed right where it needs to go."
This allows the brand to price its items a bit higher than, say, J.Crew, it's closest competitor—at least in the minds of customers. As Weber posits, "Some retailers have B+ products. Bonobos makes a lot of A’s."
While Bonobos began online, its business model has since evolved. In 2011, the brand signed a wholesale deal with Nordstrom (118 stores now carry its products), and in 2013, it began mailing catalogs to customers. Its biggest shift has been the introduction of a retail concept that revolves around what Bonobos calls "Guideshops" and which Dunn says happened by mistake.
"I thought that we would build a direct sales course, where, for very top customers, we would come visit you in your office," he says. "We hired two people and put them in the lobby of our headquarters here in New York, created a little training area, and started to bring a few customers in. Word of mouth took off that you could try on Bonobos in person."
"We were really nervous about retail, but we tested a space in Boston, and that did amazing," he continues. "Then we tested one in Chicago and one in Georgetown and kept seeing the same thing: half the people were not going to try the brand if they could not try on the clothes first. It’s too big of a leap to place that order if you don’t know what you're getting."
"Men love to shop too, they just don’t want to be carrying around bags!"
Bonobos now has 17 Guideshops around the country, and although the spaces are fully stocked with colorful chinos, preppy polos, rows of variously-washed jeans, and racks of dapper suits, they are designed solely for browsing. While most women wouldn’t dream of going through the shopping process without leaving with their spoils, Bonobos customers are relieved to have an enjoyable, shopping bag-free experience. They book appointments at Guideshops and get free personal shopping sessions where they can see merch in person, try clothing on, and place online orders via in-store iPads.
"People are always saying that women love to shop. Actually, men love to shop too, they just don’t want to be carrying around bags!" says Moriarty. "Men have become much more fashion-conscious now. Bonobos is understanding what their customer wants and is giving it to him how he wants it."
The Guideshops fulfill another key component of Dunn’s vision: exceptional customer service. Much of that is left to the "ninjas," the startup bro term Bonobos uses for its customer service representatives. Ninjas are the ones who field your questions on the phone or via email, while Guides are who help you out in the Guideshops. They're laser-focused on the customer experience, since they aren’t running around trying to replenish shelves.
"The way they come against competitors is on fulfillment," says John Pham, an analyst with L2 Inc. "Department stores, for example, carry a ton of different products. They utilize their stores as a source of inventory. But with Bonobos, they solely focus on their product and customer service. They go by the no frills, no harassment strategy."
There may not be harassment, but there is education that happens in the Guideshops, as Cory Perret, manager of the brand’s headquarters store in New York, notes.
"We’re often holding hands. Some guys get scared of the ugly S-word when I mention our slim fit."
"We’re often holding hands," he says. "Some guys like their pants tailored and sleek, others don’t. Some guys get scared of the ugly S-word when I mention our slim fit. You have shoppers who have been wearing the wrong type of shirt their whole lives, so when they come in and try on our fitted blazers that have low armholes, they get what we call ‘the flying squirrel.’ We get the gears going. Our team guides them in the right direction and the guys are usually pretty receptive to it."
Bonobos ninjas are taught to remain supportive and helpful, but not too pushy because "everyone’s been conditioned a certain way." Perret proves this method successful one morning at a Guideshop, when a scruffy CUNY graduate student (who is also, full disclosure, my husband Yoni) shows up, looking for a dress shirt. He complains that all of his shirts (from J.Crew, Banana Republic, and Charles Tyrwhitt) pull too tightly at his broad shoulders, but get too baggy when he sizes up.
Perret convinces him to try on a small slim shirt (too small), medium tailored shirt (too big), and ultimately a medium slim (just right). Though Yoni decides to pass on the perfect-fitting button-down, he walks out having ordered a new pair of chinos and a bathing suit he didn't know he needed until he experienced the Bonobos treatment.
When Dunn looks to the future of his brand, he "obsesses over a dorky metric" called a net promoter score. This assesses how likely a customer would be to recommend the brand to friends. He makes no qualms about wanting Bonobos to be the number one menswear retailer in the country and believes it will hit $1 billion in revenue by 2023.
The company's immediate goals involve reaching more customers. Though it has slowly moved away from a mostly young customer base (the average Bonobos shopper has aged from 28 to 35 over the last few years), Dunn admits the company is not where it needs to be as far as brand recognition is concerned. While it's difficult to find anyone who has a critical word to say about Bonobos, it's hardly a household name. You either love Bonobos or you've never heard of it.
To that end, the brand will continue to build upon its successful "multi-channel distribution," that particular mix of e-commerce, catalog sales, retail, and wholesale. Dunn says the ultimate objective is to become a "multi-brand company, not a mono-brand company," meaning we could be seeing more lines like AYR and Maide in the coming years. Bonobos is also aiming to have 20 Guideshops by the end of 2015, and an IPO may not be far off.
"We’d love to built a great, standalone company," he says, flipping through the Bonobos catalog. "At some point, you either sell the company or it is standalone. Our ambition is to try to be an independent company. I am open to either remaining private or going public."
And while Dunn will now be spending most of his days behind the scenes as Bonobos' "number one ambassador," he'll be working closely with new CEO Della Badia, whom has been a close friend and mentor of his for years. Together, he says, they plan to make Bonobos "the men’s brand for the 21st century."
Editor: Julia Rubin