Bombas founder David Heath is stepping down from his role as CEO as the socks and apparel company looks to expand beyond its direct-to-consumer roots.<\/p>\n
Bombas President Jason LaRose, a former Under Armour and Equinox executive, will take over as the company\u2019s next CEO effective Thursday. Heath said he realized it was necessary for a retail veteran to lead the company through its next phase of growth.<\/p>\n
\u201cWe\u2019ve reached a size and scale that is beyond my expertise. I didn\u2019t come from a big apparel company before \u2026 I found myself more so over the last 18 months saying, \u2018I don\u2019t know what to do next,\u2019\u201d Heath, who is staying at Bombas as its executive chair, told CNBC in an interview. \u201cSo then, when I looked at someone with Jason\u2019s background \u2026 having that tried and true experience is what will set Bombas up to succeed for the next chapter and I think I feel more comfortable having someone with Jason\u2019s experience in the driver\u2019s seat.\u201d <\/p>\n
LaRose, who spent six years at Under Armour and oversaw its North America business, takes the helm at a critical point in Bombas\u2019 growth story. <\/p>\n
Bombas\u2019 revenue has grown 22% in its current fiscal year through April, it\u2019s reached more than $2 billion in lifetime sales and its EBITDA is at a \u201csuper healthy, double digit\u201d margin, LaRose told CNBC. The company\u2019s footwear segment, such as its ultra-popular Sunday Slipper, is expanding the fastest. The company expects footwear revenue will soar more than 70% this year, but socks are still growing steadily, with sales up 17% in April compared to the prior year. <\/p>\n
But in order to reach its goal of growing from a \u201cShark Tank\u201d startup into a multibillion dollar company over the next five-to-10 years, Bombas needs to expand its wholesale presence. Retailers that primarily sell online like Bombas tend to reach a growth ceiling and need to turn to other channels to keep scaling profitably.<\/p>\n
Under LaRose\u2019s direction, Bombas is looking to grow its wholesale revenue from around 7% of sales to between 10% and 20%. The company also wants to test out physical stores. <\/p>\n
\u201cMore than 60% of socks in this country are sold in physical locations, you know, whether that\u2019s stores we could open, or stores that we fill with our partners \u2026 the wholesale opportunity is big for us,\u201d said LaRose. \u201cIt\u2019s also a billboard for us, right? It\u2019s a chance to tell our story. When the customer walks by, we have a chance to tell them about the mission every time, why we\u2019re here, let them touch and feel the product, which is always important when you\u2019re introducing somebody to a new apparel brand.\u201d <\/p>\n
Bombas currently sells in Nordstrom, Scheels and Dick\u2019s Sporting Goods, and unlike some of its peers, it isn\u2019t considering Amazon as a wholesale channel. Instead, it\u2019s looking to expand its assortment offered by its current partners, try out its own stores and perhaps bring on some new wholesalers \u2014 if they\u2019re the right fit. <\/p>\n
Digitally native brands that have long enjoyed the benefits of a direct model, such as customer data and the ability to stay close to customers, are often wary about expanding too deeply into wholesale because it\u2019s less profitable and it\u2019s harder for brands to tell their stories. For a company like Bombas, which spent years developing what it calls <\/strong>the \u201cmost comfortable socks, underwear, and T-shirts\u201d on the market, that storytelling is extremely important \u2014 especially at a price point of around $15 per pair of socks. <\/p>\n However, it\u2019s that very attitude that has led some to criticize the direct selling model because of how it can stymie growth and lead to unsustainable business models. Many of the early direct-to-consumer darlings have seen their valuations shrivel up as they chase profitability years after they were founded. E-commerce has become harder to do profitably, and at a certain point, stores and wholesale are a more effective and profitable customer acquisition tool for some companies than marketing online. Selling goods through wholesale channels allows brands to scale and acquire customers more profitably than just selling online.<\/p>\n Brands like Bombas that were early to move to wholesale \u2014 Heath joked that the company \u201cfocused on profitability before it was cool\u201d \u2014 understand the need for expansion but have looked to be strategic about who they partner with. Growth is important, but so is maintaining a brand, which is critical to staying ahead of rivals. <\/p>\n \u201cAs a DTC brand, we care so much about our brand and our story, it has to be somebody who\u2019s going to do an excellent job taking care of our brand. We\u2019re not out there to be out there,\u201d said LaRose. \u201cWe\u2019re looking at some other partners. We\u2019ll continue to always look for people who we think strategically give us access to the right customer, you know, nothing to announce yet on that front, but we\u2019ll keep looking.\u201d <\/p>\n Disclosure: CNBC owns the exclusive off-network cable rights to \u201cShark Tank.\u201d<\/em><\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Bombas founder David Heath is stepping down from his role as CEO as the socks and apparel company looks to expand beyond its direct-to-consumer roots. Bombas President Jason LaRose, a former Under Armour and Equinox executive, will take over as the company\u2019s next CEO effective Thursday. Heath said he realized it was necessary for a retail veteran…<\/p>\n","protected":false},"author":1,"featured_media":833,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-832","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/comments?post=832"}],"version-history":[{"count":0,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/832\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media\/833"}],"wp:attachment":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media?parent=832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/categories?post=832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/tags?post=832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}