Bombas Taps Jason LaRose As New CEO

Introduction to Bombas

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’s 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.

Background and Reason for Change

Heath, who is staying at Bombas as its executive chair, told CNBC in an interview, "We’ve reached a size and scale that is beyond my expertise. I didn’t come from a big apparel company before … I found myself more so over the last 18 months saying, ‘I don’t know what to do next.’" Heath believes that having someone with LaRose’s experience will set Bombas up to succeed for the next chapter.

Current State of Bombas

LaRose, who spent six years at Under Armour and oversaw its North America business, takes the helm at a critical point in Bombas’ growth story. Bombas’ revenue has grown 22% in its current fiscal year through April, it’s reached more than $2 billion in lifetime sales, and its EBITDA is at a "super healthy, double digit" margin. The company’s footwear segment, such as its ultra-popular Sunday Slipper, is expanding the fastest.

Expansion Plans

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. However, to reach its goal of growing from a "Shark Tank" 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.

Wholesale Strategy

Under LaRose’s 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. LaRose stated, "More than 60% of socks in this country are sold in physical locations, you know, whether that’s stores we could open, or stores that we fill with our partners … the wholesale opportunity is big for us."

Current Partnerships

Bombas currently sells in Nordstrom, Scheels, and Dick’s Sporting Goods, and unlike some of its peers, it isn’t considering Amazon as a wholesale channel. Instead, it’s looking to expand its assortment offered by its current partners, try out its own stores, and perhaps bring on some new wholesalers – if they’re the right fit.

Challenges and Considerations

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’s less profitable and it’s harder for brands to tell their stories. For a company like Bombas, which spent years developing what it calls the "most comfortable socks, underwear, and T-shirts" on the market, that storytelling is extremely important – especially at a price point of around $15 per pair of socks.

Conclusion

In conclusion, Bombas is at a critical point in its growth story, and with LaRose at the helm, the company is looking to expand its wholesale presence and test out physical stores. With a strong focus on maintaining its brand and story, Bombas is taking a strategic approach to growth and expansion.

FAQs

Q: Who is the new CEO of Bombas?
A: Jason LaRose, a former Under Armour and Equinox executive, is the new CEO of Bombas.
Q: Why is David Heath stepping down as CEO?
A: David Heath is stepping down as CEO because he believes the company needs a retail veteran to lead it through its next phase of growth.
Q: What are Bombas’ expansion plans?
A: Bombas is looking to grow its wholesale revenue from around 7% of sales to between 10% and 20% and test out physical stores.
Q: Who are Bombas’ current wholesale partners?
A: Bombas currently sells in Nordstrom, Scheels, and Dick’s Sporting Goods.
Q: Is Bombas considering Amazon as a wholesale channel?
A: No, Bombas is not considering Amazon as a wholesale channel.