Des Moines clothing startup nabs $1.85 million investment

A fashion-focused Des Moines startup has attracted investment from big names in retail and technology who are banking on its concept of delivering a personalized wardrobe for the everyman.

Men's Style Lab closed in this month on $1.85 million in financing from investors including former executives of retailers such as Macy's and Kohl's, the company's founder told The Des Moines Register.

The investment will allow the company, which curates and delivers Men's clothing via mail, to invest in inventory, make key hires and build out back-end technology necessary for the Web retailer's growth, founder and CEO Derian Baugh said.

Men's Style Lab, launched in 2013, uses the model proven by Trunk Club, the luxury menswear service that was purchased by Nordstrom for a reported $350 million this year: Clients are interviewed by a company stylist via phone, who discerns their tastes and sizes before shipping them a box of items curated to the individual client's preferences. Customers pay for what they keep and send back the rest.

But while Trunk Club deals in luxury clothes at luxury prices, Men's Style Lab is aiming for the everyman who's looking for clothes at more everyman prices, a much more sizable swath of the American populace that Baugh bets will be open to the concept.

His investors have bet so, too. One is Jeff Rusinow, a venture capitalist (and now chairman of Men's Style Lab) who spent two decades in executive gigs with Macy's, Kohl's and the Hudson's Bay Co., which owns Saks Fifth Avenue, Baugh said. They also include Dennis Phelps, who has led previous investments in tech names such as Snapchat, Twitter and Shazam.

Baugh declined to disclose the size of Men's Style Lab's current client base, or the amount of ownership he retained after the investments.

The company's cash wave began last spring at Gener8tor, the Wisconsin-based startup accelerator that picked Baugh's startup out of more than 300 applicants, helped him hone his pitch and put him in front of investors. Gener8tor also gave Men's Style Lab a jump-start with $70,000 in funding. By September, Baugh had raised $750,000, he said. A final $1.1 million fell into place this month.

"The accelerator validated that this is a legitimate business, when you get into a program that far," Baugh said. "Investors take a more serious look."

Baugh also gathered a team around him including advisers such as Susan Healy, a former CFO of Lands' End and Goldman Sachs, and Mike Colwell of the Des Moines investing firm Plains Angels, he said.

Also recruited: Kevin Hansen, who until this month managed Badowers. Hansen is credited with shaping and rebranding the decades-old menswear store in Des Moines into a cooler, sleeker shop that appealed to both suited CEOs and 20-somethings in designer jeans. In August, Esquire named Badowers the No. 2 Men's store in the country.

Hansen, now the company's vice president of merchandising, brings with him a Rolodex of contacts in the relatively small world of menswear as well as years' worth of experience buying merchandize and betting on what guys will wear each season.

Baugh originally approached Hansen about coming aboard several months ago. Hansen thought the startup had some legs, but wanted to mull it over, he said. After the investments fell into place, he agreed to come on board.

"I think my biggest skill set is understanding how to turn something with a small presence into a little bit bigger presence," he said.

Hansen's chief challenge is to do to Men's Style Lab what he did to Badowers: make it cool, developing a brand and tone for the company that convinces the everyday Joe it's OK — masculine, even — to care about clothes.

He's got a ways to go, but there's progress: Men's Style Lab's website — its primary representation as an online-only retailer — used a nondescript design and stock photo-feeling images. A new, slicker site launched Sunday.

Hansen is also tasked with curating and forecasting the company's stockpile of clothes at an accessible sales point for everyday guys. Trunk Club stocks brands such as Eton, whose shirts Hansen sold at Badowers for $255. Expect a shirt from Men's Style Lab to run $50 to $100, he said.

At Badowers, Hansen outfitted everyone from young employees at trendy East Village stores to Iowa State Men's basketball coach Fred Hoiberg and Meredith CEO Steve Lacy. Men's Style Lab will bring a different challenge.

"It's a challenge when your business takes place online," said Hansen, who's used to outfitting clients in person, not over the phone or the Web. "Eventually, down the road, I think we will have a space where a guy can come and have an appointment, have somebody show him how to wear the clothes, make sure it fits, do some hand-holding and make sure they're happy."

Men's Style Lab's physical space exists on the fourth floor of the Midland building at Mulberry Street and Sixth Avenue. Among several other startups housed in the Midland, the company's offices house a staff of 15 employees, at Baugh's last count. It's growing by a stylist every week, he claimed.

"We may need to be somewhere else in January, but we definitely came here to embrace the startup culture," Baugh said.

Wherever Men's Style Lab's offices end up, the company plans to stay in Des Moines, a centralized location that offers shipping to most any U.S. city in three days, he said.

While a student at Grand View University, Baugh sketched drawings of clothes he wanted to wear in class. He went on to a couple of retail gigs with Fossil and Finish Line before working up to a management position with U.S. Cellular. But the interest in clothes lingered with him up until Men's Style Lab's start last year.

In the earliest days of the company, Baugh tried to assemble what the tech world calls an MVP — a minimum viable product. One problem: He didn't have any connections at clothing brands. Baugh drove to the Jordan Creek mall and raided sales racks, grabbing whatever he could. Once those were depleted, he raided the Williamsburg Outlet Mall and other outlets in Minnesota and Chicago.

He bought price tags at Hobby Lobby and tied them to pants' belt loops with twine. He put the clothes in boxes and shipped them out — whatever it took to start to make it real.

"We're here for the everyday guy," Baugh said earlier this month. "If you can't find everyday guys in Iowa, I don't know where you'd find them."

Changes at Badowers' Proper

Badowers is operated by Midwest Clothiers, which also runs area clothing shops the Backroom, Mr. B's and Proper, a women's wear-focused store inside Badowers.

Midwest Clothiers' co-owner Tim Sitzmann bought some of the first-floor retail space of the Soho Development in the East Village and in March announced plans to move Proper into a Soho storefront next year.

This month, Proper manager Kiley Stenberg said the sister store would instead stretch out and stake its permanent home inside Badowers, among the racks of menswear at 2817 Ingersoll Ave.

"Part of it is the Ingersoll area and a passion for this area here," Stenberg said. "I think people were just really loving having Proper part of it. The company bought (the space), so we could still look at moving there down the road."