E-commerce menswear company Bonobos is speaking to investors about raising $100 million in a new round of funding that would value the company roughly at half a billion dollars, according to people familiar with the matter.
Bonobos is using the new funds to expand its retail footprint, highlighting the crossover that e-commerce companies are making into traditional brick and mortar retail as they push for growth, the sources said on Friday.
Bonobos, which is profitable, generates around $150 million in sales and is working with Citigroup to assist with the fundraising, according to the people, who asked not to be named because the matter is private.
Citi and Bonobos declined to comment.
New York-based Bonobos was founded in 2007 by Stanford business school graduates who wanted to create better fitting chinos. The company sells pants with a “signature curved waistband,” that creates a more flattering fit.
Bonobos has since expanded beyond khakis, and now sells golf apparel, outerwear, shoes and accessories. In 2013, it launched a female-focused website, Ayr.com, before announcing it will spin off the website late last year.
Bonobos was one of the first e-retailers to move into traditional brick and mortar in 2012, but made its biggest retail push over the last two years. Bonobos has said it is looking to reach customers who prefer to touch and see products before purchase.
Bonobos offers “guideshops” which have no inventory, but allow customers to try on clothes before having them shipped to their home. Eyewear company Warby Parker and clothing rental service Rent the Runway have similar retail concepts.
The company has roughly 28 of these shops in states that include Atlanta, Texas, New York and California. It also sells clothing at retailers such as Nordstrom and Belk.
Internet giant Amazon.com has also moved further into brick and mortar and has said it will build out bookstores and food retail shops, looking to gobble up an even greater share of the respective markets.
Many of the online platforms that sprouted up over the last 20 years have since sold to larger companies, who have sought to improve their direct-to-consumer reach. Earlier this year, Unilever bought online razor retailer Dollar Shave Club for $1 billion and Wal-Mart Stores bought internet retailer Jet.com for $3 billion.
Trunk Club, a personalized online retailer that was founded by one of Bonobos’ founders Brian Spaly, sold to Nordstrom in 2014 for $350 million. Bonobos has raised about $127 million to date with backers that include Accel Partners, Lightspeed Venture Partners and Nordstrom.