A Bonobos ‘guideshop’ stands in lower Manhattan on April 18, 2017 in New York City.
Bonobos co-founder Andy Dunn is returning to the retailer as brand advisor as the company looks to get back to its roots after it was sold by Walmart earlier this year, Bonobos and new parent company WHP Global announced Friday.
Dunn, who founded the men’s clothing brand in 2007, will report to WHP Global CEO Yehuda Shmidman but will work closely with Bonobos president John Hutchison and Express Inc. CEO Tim Baxter.
WHP Global and Express Inc., which runs the Express brand, bought Bonobos from Walmart in a $75 million deal that was announced in April and closed last month. Walmart originally bought Bonobos in 2017 for $310 million while it was working to grow its online presence under former e-commerce president Marc Lore.
“It’s almost unlimited opportunity, right?” Shmidman told CNBC of the decision to bring Dunn back to the brand. “You get the opportunity to dive deep into why the brand was created in the first place, the success it enjoyed in the beginning years and how that happened and sort of learn from that to inspire the next chapter of growth.”
Shmidman said WHP Global has no plans to change the Bonobos DNA and said the firm’s decision to appoint Dunn is part of its plan to center the brand on its core identity.
“It’s very important to know that we’re not changing. In fact, if anything, we’re doubling down on that very same DNA that made Bonobos successful in the first place,” said Shmidman.
One area where Shmidman does want to see a change is Bonobos’ physical footprint: The brand currently runs brick-and-mortar Guideshops, where customers can try on clothes and then order them online, but only in the U.S. Under WHP Global, Bonobos can expand internationally, he said.
“How about a Bonobos in Dubai? How about a Bonobos in Hong Kong?” said Shmidman. “How cool would that be?”
Dunn said he’s excited to “have a seat at the table” and that this time around he’ll just be advising the brand — not running it.
“I’m here to serve in whatever way called upon and the way that I think about that is just staying really close to the customer. I’m a lot older than when Bonobos started, you know, I’m 43 now, I was 28 then,” Dunn said. “So, I’ve gotten a lot of perspectives about the product and the customer and how do we just begin this new chapter and just get bigger.”
Bonobos started out as a purely digital retailer in the early aughts and grew to be a pioneer in the direct-to-consumer space after it managed to scale, achieve profitability and garner national recognition.
When Walmart decided to acquire the brand, some thought the partnership didn’t make sense because the giant retailer’s focus on value didn’t seem to mesh with Bonobos’ identity as a premium menswear line.
While Walmart sold Bonobos for a significant discount compared to what it paid, the acquisition wasn’t necessarily a losing one for Walmart. The tie-up helped boost its digital sales.
Online sales accounted for about $53.4 billion — or nearly 13% — of Walmart U.S.′ total net sales in the past fiscal year, which ended in late January, according to company filings. That’s a jump from $15.7 billion, or roughly 5% of Walmart U.S.′ total net sales, in 2019.
Andy Dunn, Bonobos co-founder
Source: Brian McConkey
But how Bonobos fared — and what it gained — from its time under Walmart’s massive tent isn’t as black and white.
At the time of the acquisition, Dunn wrote in a blog post that the sale to Walmart gave Bonobos an opportunity to reach a wider ecosystem, arguing the deal fit in with its goal to “become the market leader in all of premium menswear.”
It also gave Dunn an opportunity to work alongside Lore, his longtime mentor who he considered “the best in the world at building upstart third-party brand e-commerce properties.”
Six years to the day after that blog post was written, Dunn told CNBC he stands by his decision to sell to Walmart and “vociferously” disagrees with critics who say the brand was diluted by the acquisition.
“From a premium positioning standpoint, the Bonobos business is still up and to the right and growing,” said Dunn. “From the vantage point of the customer, I don’t think it changed much, you know, would be my read, and I think the proof is in the pudding on the continued growth of the brand.”
The Walmart umbrella offered Bonobos exposure to a wider customer base and also protection from the pandemic-related headwinds that plagued other independent retailers during the global health crisis.
“With the pandemic, and how hard that was on retail, that to me was the moment where I stepped back and thought, wow, we made the right decision putting Bonobos inside of such a strong house,” Dunn said.
These days, Bonobos is still delivering double-digit sales growth, WHP Global said.