Two summers ago, men’s styling startup Trunk Club was acquired by Nordstrom for $350 million. Founded in 2009 by Brian Spaly — formerly of Bonobos, an apparel brand for the callipygian gentleman — Trunk Club had raised more than $12 million in venture capital and was based on a simple, albeit stereotypical, premise: Men don’t know how to dress themselves, but are willing to pay a premium to have a professional do it for them.
Trunk Club’s name derived from its business model: shipping “trunks” of hand-picked clothes to its customers’ doorsteps, offering them the luxury of a personal shopper without the hassle of having to ever set foot in a store.
The acquisition was heralded as a victory not just for Trunk Club, but for the slew of companies created in its mold. “The men’s fashion market may not be as big as the women’s, but it’s broken and it’s commanding more and more attention of late from retailers,” venture capitalist Michael Carney wrote on tech industry site Pando. “The male consumer has grown more sophisticated and is spending more than ever before, and the success of brands like Trunk Club and Spaly’s prior startup Bonobos are evidence of this fact.”
It wasn’t just Carney who was bullish. The years leading up to the sale saw venture capitalists pour tens of millions of dollars into companies virtually identical to Trunk Club. They all had vaguely similar names (Bombfell, Five Four Club, Cinch Club, ThreadLab) and offered essentially the same service: packages of clothes delivered to a man’s home and tailored to his individual style.
Just two years later, retail experts are expecting almost all of these also-rans to fail. What was once a hot startup “space” is now oversaturated, and the Trunk Club acquisition will prove to be the exception, not the rule.
It turns out that the stereotype that men don’t like to shop is truer than even these companies believed—and the men who do like to shop don’t want someone else to do it for them.
“You have two value propositions [with men’s styling startups],” says Jason Goldberg, senior vice president of content and commerce at digital ad agency Razorfish, which has a specialty in retail. “You’re making it easy for guys who don’t like shopping to acquire clothes. And you’re trying to cater to a style-conscious man.
“The irony is that those two groups don’t necessarily overlap. The style-conscious men are the ones who are most likely to shop for themselves and enjoy the treasure hunt. And the ones who don’t enjoy shopping are the ones wearing Gap khakis as their uniform.”
Men’s aversion to fashion and shopping is a tired stereotype, but it largely rings true, according to Meg Gallagher, an IRL personal stylist who splits her time between New York and Los Angeles.
“Men, in general, don’t like to shop,” she says.
Gallagher serves about 250 clients in her personal styling practice, only 40 of whom are men. Her typical male customer makes about $250,000 annually and is in his 30s or 40s, she said. When they shop, they like to process to be as efficient as possible. “Guys, they put it on and they’re like, ‘Great. Next.’ … A lot of women like to get into the details [of what they buy]. With men, I have to keep it really clean and straightforward.”
Gallagher doesn’t bother marketing her business to men anymore — she finds it’s more effective to market to women, and have them recommend her services to the men in their lives. Most of Gallagher’s male clients come to her at the urging of their wives or girlfriends.
“I don’t want to say men are lazy…” Gallagher says, trailing off. “When men look at their spare time, they don’t want to devote it to shopping and what they look like.”
It’s this reluctance that should make the online styling model a perfect solution — it allows men to be stylish without having to exert any time or effort, or risk their masculinity by showing an interest in fashion.
“[Men] are willing to try it. There’s very low risk to these subscriptions. You put your $100 in, and if it works out, you’re like ‘I don’t have to worry about clothes anymore,’” Gallagher adds. But men tend to quickly lose interest in these styling startups, and the companies have difficulty retaining them as customers, Gallagher says.
She would say that, of course. Online styling services pose a threat to her business, she admits, and she’s doing her best to stave off the competition. She added an online styling feature five years ago, allowing clients to receive customized “outfit boards” via email and consult with her on Skype. Approximately 10 percent of her clients use it to some degree, she says. Later this month she’ll release StyleMD, an app that will connect customers to stylists and let them receive fashion advice through FaceTime
Still, she believes real-world stylists will maintain, if not prevail. “There will always be a need for personal-touch services,” she adds. “All these [styling startups] are riding on the coattails of Trunk Club. But how many of them are going to be bought by Nordstrom?”
The answer, according to venture capitalist Adam Besvinick, is few, if any. “You have all these other companies that have emerged, and their argument is, ‘Trunk Club got acquired by Nordstrom. We’re going to bet that brand stagnates and that we emerge as the younger, hipper version,’” says Besvinick, principal at VC firm Deep Fork Capital.
“But I have a hard time seeing how there are more than a couple winners in the space. Do you really need Try.com, Bombfell, Trunk Club and a handful of others?”
Besvinick pointed to Try.com as an example of the difficulty of trying to cater exclusively to men. Before Try, the company was BRANDiD (tagline: “Shop. Like a Man.”). Founded in 2013, BRANDiD was created as a men’s fashion platform for the Average Joe — the recommendation process was called MALE (masculine algorithmic learning engine) — and it quickly raised more than $2 million in venture capital.
Just two years later, the company underwent a full rebranding, changing its name to Try and adding clothes for women. The male market just isn’t that large — even Trunk Club expanded its service to women last August, one year after its sale to Nordstrom.
“Every time I look at the space, there are new companies I haven’t heard of and everyone is pivoting their model,” says Goldberg, of Razorfish.
Goldberg noted that men’s styling startups are also facing another challenge: Millennials don’t spend as much on clothes as their forebears. Their spending on air travel, dining and media went up in 2015, while their retail spending was down. That buying behavior reflects a recent Harris Group study that found millennials would rather spend on experiences (e.g., concerts, vacations, sporting events) than on things. A 2015 study by PwC found millennials devote a larger share of their holiday spending to experience-relate purchases. When Macy’s fell short of revenue projections in 2015, its CFO blamed millennials.
Besvinick even suggested Nordstrom might have overpaid for Trunk Club. E-commerce startups have struggled in recent years, with former darlings now in danger of shuttering. Flash sale site Gilt Groupe had a “disappointing” acquisition early this year, with many employees losing money on their stock options. Home decor site was One Kings Lane was at one point valued at $900 million, and is now expected to sell for a fraction of that price. Birchbox, a subscription service for beauty products, laid off 15 percent of its staff in January, less than two years after it raised $60 million and was valued at $500 million.
“I have a hard time seeing how [Trunk Club] is a $350 million business,” Besvinick says. “Trunk Club got out perfectly. They timed that better than they could have imagined.”
Goldberg agrees: “The Trunk Club sale is the closest thing we’ve had to be a big sale in the space. I don’t mean to discount it, but it didn’t feel like a home run. It wasn’t a unicorn or anything like that.”