Seven-year-old Bonobos, one of the earliest success stories in the online-native apparel brand space, announced Thursday that it has raised $55 million in Series D funding, which it plans to use to quadruple its physical store presence nationwide over the next two-and-a-half years.
Bonobos, which is known mostly for the men's clothing it sells online and which also operates the women’s brand AYR and golf line Maide by Bonobos, has opened 10 "guideshops" across the country over the past three years. These function much like Warby Parker's boutiques and Everlane's pop-up shops: Shoppers can browse and try on clothes in store, but can't leave with the merchandise in hand -- rather, they can place an online order at the guideshop and have their purchases shipped to them. This strategy allows Bonobos to offer much of the same services as a traditional brick-and-mortar chain, but saves the company the cost and trouble of managing inventory across multiple locations. The size of its stores, too, can be smaller: Bonobos guideshops are all less than 1,500 square feet.
Bonobos CEO and founder Andy Dunn says that the guideshops have become one of the company's most important channels for marketing, sales and customer service. "We’ve cut online marketing expenses in half as in-store purchases have increased," he says, noting that guideshop customers typically spend double what they would spend online each time they stop by, and that sales of premium dress shirts and suits are particularly successful in store. "We’ve learned that brick-and-mortar isn’t going away, but it is evolving into something more exciting," he adds.
The funding was raised from a mix of venture capital firms, including Accel Partners and Lightspeed Venture Partners, as well as Nordstrom, which has been carrying Bonobos merchandise in its stores since it invested in the company in 2012.