A few names come to mind when the phrase “DTC darling” is uttered — Warby Parker, Casper, Allbirds, Bonobos.
While they’ve all taken their own paths as they've evolved — from IPOs to mass store expansion — Bonobos' journey has included several ownership changes over the past decade.
About 10 years after launching, the men's apparel brand was scooped up by Walmart for $310 million in a move questioned by industry experts. The acquisition came amid a wave of similar deals made by Walmart to purchase digitally native brands such as ModCloth, Eloquii and Moosejaw.
However, as the mass merchant’s priorities around its e-commerce strategy shifted, it began offloading those brands, including Bonobos, which last year was sold to Express Inc. and WHP Global for a fraction of what Walmart purchased it for.
Not even a year after that sale closed, though, Bonobos found itself in bankruptcy court as its parent company Express Inc. filed for Chapter 11.
With a new entity composed of three mall owners and a brand management firm purchasing both Express and Bonobos out of bankruptcy, what challenges remain ahead for the DTC brand?
Ownership changes
Bonobos was launched by Andy Dunn and Brian Spaly in 2007 and quickly became popular for menswear — particularly its pants.
The brand redesigned khakis, featuring a more tailored thigh for a better fit, a curved waistband and a medium rise style.
Bonobos was among the first class of DTC brands that helped change the way consumers shop for goods, with Dunn early on packing and shipping the brand’s pants directly to customers from his Union Square apartment in New York City.
The brand continued to expand, taking its products offline by opening stores, launching wholesale partnerships — including with Nordstrom — and attracting more funding from investors.
Bonobos eventually caught the attention of Walmart, which acquired the DTC brand in 2017. At the time of the acquisition, Bonobos said it was profitable and generating $150 million in annual sales.
But onlookers questioned whether Walmart — a mass merchant focused on value and saving its customers money — and the higher-end Bonobos brand would make a good fit.
“I remember, as a Bonobos-aware and Bonobos-liking consumer, thinking, ‘This is the end. Walmart’s going to kill it. They’re going to really destroy the quality. They’re going to just change everything,’” said Peter Fader, professor of marketing at The Wharton School of the University of Pennsylvania. “And they didn’t.”
The deal, however, did fit within a strategy Walmart was employing of scooping up other digitally native brands.
And Bonobos’ Dunn remained involved following the deal, transitioning to a new role overseeing Walmart’s collection of digitally native brands, which at the time included shoe retailer Shoebuy, outdoor retailer Moosejaw and women’s apparel retailer ModCloth.
But as Walmart’s e-commerce strategy shifted, it began selling off several of the brands it acquired — including Bonobos, which Walmart in April 2023 sold to apparel retailer Express and brand management firm WHP Global for a combined total of $75 million.
Coinciding with the closing of the deal, former Express Inc. CEO Tim Baxter in May 2023 said Bonobos had “delivered strong sales growth” over the past three years and generated $200 million in sales in 2022.
Baxter on earnings calls described Bonobos as a “very compelling addition to our brand portfolio” and said that the acquisition “represents a significant growth opportunity for [Express].”
And Bonobos did help boost Express for a time. In November 2023, the brand helped Express Inc. post a 5% year-over-year sales increase in Q3 to $454.1 million, by contributing $52.1 million in sales. The gains at Bonobos during the period were offset by declines at the company’s namesake brand and UpWest brand, which fell 7% to $402 million during the period.
But Express Inc.’s challenges proved too great. The company faced declining in-store sales as well as “challenged vendor relationships and funded debt obligations,” leading it to file for Chapter 11 in April this year with a plan to close over 100 stores — though no Bonobos locations — and sell itself to a group which included WHP Global, Simon Property Group and Brookfield Properties.
“It doesn’t actually matter who owns the brand. There are so many die-hard fans."
Liza Amlani
Principal and Founder of Retail Strategy Group
About two months later, the newly formed entity (which also included mall landlord Centennial) dubbed Phoenix Retail received court approval to acquire Express Inc’s assets out of bankruptcy for $174 million.
Through the deal, Phoenix Retail agreed to operate all DTC commerce in the U.S. for both the Express and Bonobos brands. The company also said more than 450 stores would remain open, including 49 Bonobos Guideshops, down from the 60 the brand operated in September 2023.
A future under Phoenix
As Bonobos settles into new ownership once again, it faces several challenges ahead — namely remaining relevant to new and existing customers.
To the brand’s benefit, Bonobos sports a loyal customer base, making the numerous ownership changes less impactful in a sense, according to Liza Amlani, principal and founder of Retail Strategy Group.
“It doesn't actually matter who owns the brand,” Amlani said. “There are so many die-hard fans — the chinos that they’ve been buying and the pants that they've been buying for years and years, no matter the ownership.”
For the most part, Bonobos’ previous owners have largely left the brand alone in that from the customer’s perspective, nothing has really changed, according to Fader and Amlani.
“Just going in and seeing the product in the last few years, there has been consistency in the quality, in the materials, in the fit, which tells me that they kept the ethos alive,” Amlani said.
Dunn has also been involved in Bonobos in some capacity for much of its existence. He served as CEO for the first 10 years after the brand’s founding, and following its acquisition by Walmart in 2017, he took on a new role overseeing the mass merchant’s digitally native brands, including Bonobos. While Dunn stepped down as Bonobos CEO in 2018 and left Walmart in 2020, he rejoined Bonobos in June 2023 as an adviser under WHP Global, a role WHP Global confirmed he still holds.
But it’s yet to be seen how deep his involvement as an adviser is.
“How much of it was kind of real and operational versus optics? It was never clear to me that Andy's heart and brain were in it as was the case when they were founded,” Fader said. “It just seemed like almost window dressing that, ‘Hey, Bonobos is going back to its roots.’ We don't really see any manifestation of it. … It's not to say that they've been mismanaged. It's not like anyone’s done anything horrible to it. But I do think there have been some opportunities that just didn't really turn into anything.”
On the other hand, having someone of prominence at the brand could ensure continuity as it eases into new ownership. “I think it's going to be great for the brand,” Amlani said, noting, however, that “it really depends on what the new ownership wants to do with the people in the brand.”
But that consistency might be negatively impacting Bonobos’ growth.
“They kind of lost their momentum,” Fader said. “They had their original founding story from Andy Dunn stitching up pants in his dorm at Stanford. That whole story is just ancient history now and they never really replaced it with anything.”
Other DTC brands, like Warby Parker and Harry’s have been able to “keep it fresh and interesting,” expanding into other product categories, while remaining true to their brand identity, he said.
“They've just lost a lot of their distinctiveness — not their fault — but they haven't really done much to maintain their mind share,” Fader said.
The menswear space is increasingly becoming more competitive, especially with digitally native brands. Rhone has been opening more stores and expanding into additional product categories to reach new customers, while Indochino has been steadily building out its physical presence.
Bonobos’ own brick-and-mortar footprint also represents a potential area for growth for the brand.
Bonobos, like many other digitally native brands, set out to take its products offline, opening its first physical store in 2011. Dubbed “Guideshops,” the locations allowed consumers to try on products, without actually carrying inventory. While customers couldn’t walk out of the store with merchandise, associates could help them place their orders to have their items shipped to them.
That concept has largely remained unchanged. What did change, however, was the brand’s store footprint goal.
Back in 2016, years prior to the pandemic upending and changing the retail landscape, Dunn said that the men’s apparel retailer was planning to open 100 stores by 2020. Bonobos’ current footprint is half of that. But with mall owners Simon, Brookfield and Centennial as its part-owners, there’s potential for brick-and-mortar growth.
“Having that access to physical space, allowing [the] brand to scale — that is where I think we could really see some interesting things coming out of the deal,” Amlani said. “What happens to physical retail, and will Simon and Brookfield give Bonobos access to premium retail spaces that are innovative, that are new?”
What’s important for the brand moving forward, though, is finding a way to connect with its customer base to give them a reason to keep coming back and broaden its appeal to attract new customers.
“Its narrative has just disappeared. They sell a quality product. I still admire some of the ways they go to market, but no one talks about them,” Fader said. “They're just kind of off the radar compared to the days when they were kind of a DTC darling.”
Editor's note: This story has been updated with information about Dunn's current involvement with Bonobos.
