This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

EXCLUSIVE: Bonobos Headed For IPO Next Year

NEW YORK (TheStreet) Bonobos is about to go where, seemingly, no other New York City-based e-commerce startup can boldly go -- public markets.

All it took was the investment capital, and the prime retail real estate footprint, of one large strategic brick-and-mortar player.

Several sources confirm management of the mens clothing online retailer has indicated the company is now profitable and could be looking at an initial public offering as early as 2014.

One source familiar with Bonobos plans suggested next year it could push its revenue into the $80 million to $100 million range, depending on projections coming out of the 2013 holiday season. At comparative multiples for other IPOs in the space Bonobos could be worth $1 billion when it goes public.

Though a company spokeswoman declined to discuss revenue figures, she said, in an e-mail, that the company was considering an IPO, but more likely not until 2015.

To date, the company has raised more than $70 million from boldface VC names like Accel Partners and Felicis Ventures$30 million of that coming in a fundraising round earlier this year. But, beginning in 2012, when Bonobos took on Nordstrom (JWN) as a financing partner, is when the company's small yet powerful physical retail presence began to develop.

At the time the Nordstroms partnership was announced, only about 20 of the retailers locations carried the Bonobos line. That has since grown to about 80 of the retailers 117 full-line locations, according to a Nordstrom spokesman.

A trip to Bonobos isn't exactly the run-of-the-mill shopping experience: guideshops, where a personal ninja (the company's moniker for its style consultants) will guide you sans sword through an array of choices, a dressing room and an electronic checkout. Along with the Nordstrom locations, the company operates standalone stores, making the most of limited square footage by using its Flatiron headquarters as a duplicate location with fitting rooms.

But Bonobos retail strategy is as simple as it is bizarre: Sure, you can come to our stores, but don't even think of leaving with a stitch of clothing.

Customers usually scheduled with an appointment, but some can slip in quickly unannounced at downtimes can try on anything they want, in any size, and they'll be electronically entered into Bonobos shipping system. By the time customers arrive home they're greeted by an e-mail with a reminder of when the shipment should arrive it typically takes a couple of days.

And, said one source, it is the appointment factor that helps drive up sales for Bonobos: convince a man to show up at a prescribed time and actually try on khakis, chances are hell elect to make the buy.

For e-commerce companies, as well as New York's nascent tech scene, it is very welcome news, and comes after a spate of difficulties in that industry and for investors here. At first, it seemed like 2013 would be a banner year for New York tech companies.

F--k yeah! exclaimed David Karp on his Tumblr blog the day the startup was sold to Yahoo! (YHOO) in a $1.1 billion deal. Karp should have been happy¬the company that raised $125 million went on to stack up only an unimpressive $13 million in revenue in 2012. Sources suggested the only other option at that point was for Tumblr to raise a down round a proverbial scarlet letter on the startup scene.

Another New York startup, Tremor Video (TRMR), went public in June beneath the low end of its range at $10 a share, had an awful quarterly report this month and told investors it wouldn't be profitable until next year. The stock now trades at less than half the float price. Only New York startup Shutterstock can truly claim victory in the public markets: the online stock art shop has seen its shares more than double in about a years time.

E-commerce and flash sales sites based in New York have also had trouble so far this year.

Gilt Groupe struggled as one of New Yorks would-be IPO darlings, shuttering some lines of business. A source said Gilt Groupe currently would have difficulty establishing the momentum for a public offering but that the company can still reverse its fortunes.

E-commerce startup Fab has been anything but as it attempts a tricky transition from flash sales to traditional e-commerce. The company has suffered from a combination of layoffs and key staff departures, most recently highlighted by exits of its COO and a co-founder.

And social media app provider Foursquare Labs has struggled to retain key top staffers, including its head of product, who left, according to an AllThingsD report, just as the company is preparing a significant product rollout. Earlier this year, the company raised a debt round from private equity firm Silver Lake.

Of course, not every e-commerce stumble can be traced back to area codes 212, 646 or 917. LivingSocial's public disintegration has been chronicled quarterly in Amazon's (AMZN) regulatory filings; Groupon (GRPN) has become the exit that got away for its Silicon Valley backers after ex-CEO Andrew Mason famously spurned Google (GOOG); and ShoeDazzle.com, the subscription shoe retailer affiliated with reality star Kim Kardashian, was about as successful and long-lived as either of her first two marriages.

Founded in 2007, Bonobos has an opportunity to debut onto public markets at a time when e-commerce in New York badly needs a win. The company's profitability and business model should give it more appeal than those that went public while they were still losing money, one source said.

Bonobos evolved from being a retailer of mens' pants to a broader line, to its latest act: Tuesday the company announced that women's wear affiliate Ayr.com, will just like Bonobos origins launch by only selling pants. For investors in New York, questions remain as to how flash sale sites and those that target a wider demographic will succeed, with public markets spurning many e-commerce companies and strategics like Amazon.com and eBay backing away from M&A in the sector. For some, however, it seems there wasn't always that much of a question.

New York is typically viewed as the dumb money in venture investing, cackled one West Coast VC, observing ballooning valuations and capital structures here.

--Written by Jon Marino in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,985.61 +78.99 0.47%
S&P 500 1,972.83 +9.12 0.46%
NASDAQ 4,419.0340 +27.5710 0.63%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs