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The Men’s Apparel Market is Getting More Attention From Investors

The men’s market is finally getting some serious investor attention.

Earlier this month, strategic buyers announced two deals: Randa Accessories inked a deal to acquire Haggar Clothing Co. for an undisclosed amount, while Edgewell acquired direct-to-consumer shaving start-up Harry’s for $1.37 billion.

Haggar, founded in Dallas in 1926, has its roots in men’s as a manufacturer of fine dress pants and slacks. That business has since been expanded to include sport coats, vests and “custom fit” suits. In addition to its wholesale business, Haggar has more than 80 branded stores. The company also owns Montreal-based women’s sportswear brand, Tribal. For Randa, which last year made an unsuccessful attempt to acquire men’s brand Perry Ellis International, Haggar represents an entry into the apparel market.

For Harry’s, which recently launched a women’s business under the label Flamingo, the acquisition allows Edgewell to build market share in the razor sector. Edgewell owns the Schick and Wilkinson razor brands, and it also owns Banana Boat sunscreen and Wet Ones moist wipes. The last time a grooming brand was acquired in men’s, it was Dollar Shave Club, which Unilever acquired in 2016 for $1 billion.

What’s driving the investment

While investors haven’t shied away from apparel or beauty, most of those transactions have been in women’s fashion categories, and more recently in beauty or direct-to-consumer brands. Andrew Charbin, a director at The Sage Group, said acquisitions of apparel brands often take more time to evaluate because the brands don’t grow as fast. That’s in part a reflection of what’s been happening in the wholesale market, as well as the challenges in the department store sector. And those apparel brands that grow quickly online tend to need “a high amount of capital, so many bring in the venture capitalists from day one,” the investment banker said.

Over the past decade, it has been the direct-to-consumer (DTC) brand space in men’s garnering much of investors’ attention.

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Start-ups like Buck Mason, Chubbies Shorts and Frank & Oak were among the brands that drew some attention at the start of the decade. Early movers in the DTC space, like Bonobos, started operations in 2007 and raised nearly $128 million in its Series D round before being acquired by Walmart in July 2017 for $310 million. Trunk Club, the personal styling service firm for men and another that got an early start in the space, launched in 2009 and raised $12.4 million in its Series A round before being acquired by Nordstrom in July 2014.

Newer startups that have gotten attention from investors are in the custom market, companies like Knot Standard and Stantt.

Custom tailored suiting firm Knot Standard was founded in 2011, and has an estimated aggregate raise of $23.7 million. It’s most recent raise was in April 2018, led by private equity firm Provenance. The round also included Randa Digital, an affiliate of Randa Accessories. It also counts Under Armour founder Kevin Plank as an investor from an earlier round.

Men's Market is Getting More Attention From Investors
Inside the Knot Standard showroom, in Dallas. Courtesy Photo

Stantt, the custom men’s made-to-measure shirt firm, was founded in 2013 and in February completed a Series A round that also includes Randa Digital. The company has a significant wholesale presence, and by the end of June will be in all Nordstrom doors, according to Stantt co-founder Matt Hornbuckle. The company, he said, is planning to expand beyond its custom shirting business later this year.

Men's Market is Getting More Attention From Investors
Custom shirt options from Stantt. Courtesy Photo

So has the focus now shifted toward men’s? And if so, why?

William Susman, an investment banker and the founder of boutique advisory and research firm Threadstone Partners, said, “The men’s market remains extremely hot. There are brands that are attracting both the traditional men’s customer and the millennial shopper. Todd Snyder being at the top of the list. But others as well [such as] John Elliot on the West Coast.”

Todd Snyder, in fact, is set to receive the Designer of the Year/Collaboration Award ACE award on June 10 from the Accessories Council.

As for the attention given to the sector by both financial and strategic buyers, Susman said, “Investors are attracted to the men’s market given the higher customer loyalty, the lack of extreme promotion and strong American designers.”

Another banker, who requested anonymity, said the current interest is still in the early stages now that the men’s market is starting to gain traction in the athleisure category.

What men—and investors want

John Ballay, co-founder of Knot Standard, said he’s seen a shift “since 2010 when men started to care more about the way they look, what their workout plans were and where they bought their clothes–that has elevated the bar. Suddenly it became not OK to wear the same blue work blazer to a rehearsal dinner and the same work suit to a wedding.”

Social media has also played its role, which Ballay said helped create a forum for discussion over clothes and styling, as well as services and fit.

And with men’s attention, Knot Standard drew investors’ attention, too, Ballay said.

As for what investors bring to the table for the brand, the co-founder said, “Provenance brings incredible forward thinking on how to grow a modern-day DTC brand with a high service component. Randa brings to us decades of experience in the space, which has been incredibly helpful to supply chain, sourcing and building out a business platform that will be around for the next next 50 years.” The company has, since its launch, expanded beyond tuxedos to include blazers, chinos and custom shirts.

Stantt’s Hornbuckle said when he started the firm six years ago, there wasn’t a lot of venture capital interest in the men’s market. But in recent years, consumers’ attention has helped fuel a change in interest from investors, and it’s been a boon for the brand. Hornbuckle, who admits to having no apparel experience prior to founding Stantt, said he likes having a strategic investor on board instead of a just a financial sponsor.

“They have the experience. When we have a question, we go to them. We have no apparel experience so having a resource like Randa is great. They are eager and very willing to help,” Hornbuckle said.