Dive Brief:
- DTC brand Knot Standard is merging with fashion retailer Billy Reid, the companies announced Thursday via press release. As part of the deal, Billy Reid will acquire Knot Standard’s DTC business, including eight physical stores, which will be rebranded, giving the fashion retailer 20 locations nationwide.
- Knot Standard will be a minority shareholder of the combined business. The two already had a partnership, which started last year, where Knot Standard provided made-to-measure support in Billy Reid’s stores. Knot Standard declined to comment on the financial terms of the deal.
- Knot Standard’s AI-based made-to-measure software will be available at all Billy Reid stores going forward, the brands said. The DTC custom clothing company's tech business will remain a separate entity offered to third-party brands; Knot Standard said it is launching at six other retailers by the end of the summer, amounting to 60 additional locations.
Dive Insight:
Knot Standard, founded in 2011, is selling its DTC business to fashion retailer Billy Reid, which was founded by the fashion designer of the same name in the early 2000s. Billy Reid will own the retailer's stores and online business, and Knot Standard's sales associates and management team will join the fashion retailer as well.
“Joining and rebranding our stores with Billy Reid represents more than a business decision; it's a fusion of craftsmanship and innovation. As CEO of Knot Standard, I am incredibly proud to bring our cutting-edge, AI-driven custom menswear and womenswear to Billy Reid's esteemed clientele and iconic brand,” Matt Mueller said in a statement. “Our combined strengths will not only elevate the made-to-measure experience but also expand our reach, bringing exceptional quality and personalization to more people across the nation.”
The deal will give Billy Reid not just a handful of new stores, but also access to AI software it says will “dramatically enhance” its made-to-measure business. The company previously had a “successful” made-to-measure business, but Billy Reid discontinued it during the pandemic. Interest in relaunching that side of the business ultimately brought about the deal with Knot Standard, which was proposed to Billy Reid by Knot Standard investors last year as part of a fundraising discussion. Billy Reid aims to grow brand awareness through the acquisition and the company said the brands share a similar price point, customer, and retail and real estate footprint. Knot Standard has stores in major cities like Chicago, San Francisco, Dallas and Washington, D.C., per its website.
“We were initially attracted to the product quality, similar customer and unique business model, all of which complement the Billy Reid business and will create a stronger consumer offering than each brand could have achieved alone,” Billy Reid, CEO Jeff Zens, said in a statement.
Meanwhile, Knot Standard is expanding its presence in third-party retailers after the introduction a few years ago of an on-demand custom clothing platform. The company already has a large presence in Nordstrom stores across the country, and offers its measurement software at Brooks Brothers and Bloomingdale’s as well.
The merger with Billy Reid comes as retailers focused on business casual and formalwear continue to struggle in the wake of the pandemic, which largely did away with the need for suits for a time and brought athleisure and other casual apparel trends to the fore.
Still, some businesses in the e-commerce-based suiting space are expanding. Indochino in 2022 said its revenue grew 40% year over year, though the custom suiting company did not disclose exact figures, and the company a year ago expanded its womenswear offering to all stores and its website. Generation Tux, an online tuxedo and suit rental company founded by Men’s Wearhouse founder George Zimmer, opened its first showroom earlier this year.
