With a slew of COVID-19 pandemic restrictions lifted globally, travel is having a sort of comeback this year.
Global flight bookings for leisure travel were up about 31% in March compared to the same period in 2019, according to data from Mastercard’s Travel Industry Trends 2023 report in May. Additionally, demand for in-person meetings has grown, with leisure and business travel now at similar growth rates.
Naturally, that bodes well for airlines. Delta’s CEO Ed Bastian earlier this month said that travel was a high priority for consumers although airlines have had difficulty catching up with such demand, according to reporting form Reuters. The company again raised its profit outlook for the year and beat analysts’ adjusted profit expectations for the second quarter.
But a travel boom also means an opportunity for premium luggage brands, such as Monos.
The Canadian travel and lifestyle brand was founded in 2018 with a focus on selling high-quality, functional travel gear that was also beautiful – a category with competitors such as Away and Béis.
The goal is to create a successful brand that's positioned for the long term, Monos CEO and co-founder Victor Tam told Retail Dive.
Entering brick and mortar is part of the brand’s evolution to meet that goal, Tam said. Monos opened its first retail location earlier this month in Vancouver, British Columbia, with plans to open additional spaces, including a store next year in Toronto.
“I think what’s tried and true in brands is brick and mortar,” Tam said. “That's something that will stand the test of time. … For the next cohort of consumers, we definitely want to start expanding our footprint in the physical space to kind of build that omnichannel experience.”
Monos is a mainly direct-to-consumer company that has focused on building a strong e-commerce channel.The brand’s venture in wholesale through a partnership with Nordstrom has been more so focused on building brand awareness, according to Tam.
“They do carry similar premium brands that we want to be associated with. However, it's not really a volume driver for us,” Tam said. “We're very selective in our wholesale strategy. It's really just more of a brand awareness play. … We just want to control the customer experience and be highly curated.”
"A lot of these major brands haven’t made a single dollar, which is kind of puzzling because that’s the opposite of starting a business.”
CEO of Monos
Monos’ strategy appears to be working for the brand, with the company telling Retail Dive that it’s been steadily growing and profitable since its inception, on both a net income and EBITDA basis.
“We're in the business to be profitable,” Tam added. “I think the kind of macro problem with the last 10 years is the notion with direct to consumer that it’s growth at all costs. … A lot of these major brands haven't made a single dollar, which is kind of puzzling because that's the opposite of starting a business.”
Although Monos has been profitable, the brand decided to seek external capital – a process that Tam felt could be a good learning experience, as the executive has always bootstrapped his businesses, which include Rove Concepts and others.
Monos in January of 2022 brought in $10 million during a Series A round led by Venn Growth Partners. Later that year in September, the brand closed $30 million in what it described as an “oversubscribed” Series B funding round. Monos also added former Samsonite, Louis Vuitton and Pandora CEO Marcello Bottoli to its board.
However, Tam said that when the company looked at its bank account toward the end of 2022, all $40 million was still sitting in the bank.
“We haven't used a single dollar,” Tam said. “The company is profitable. It’s spitting out cash. It’s a learning for myself where it's like, if you are profitable and you have a great cash conversion cycle, you don't have to raise that much money.”
Direct-to-consumer competitor Away's most recent funding round, a Series D raise in 2019, brought in $100 million and valued the company at $1.4 billion. Following the massive investment, however, the brand experienced a sales hit due to the COVID-19 pandemic, went through a series of leadership shuffles and has explored strategic options including a possible sale of the business, according to reporting from Bloomberg in February.
The chief executive noted that he doesn’t regret the decision to raise the money, though, as it allowed the company to execute decisions it may not have otherwise, such as exploring the physical retail channel. Being used to bootstrapping, Tam said he's worked with limited resources before and knows how to prioritize core expenses.
While competition in the travel space is hot, Monos hopes to break away from the pack by remaining focused on its core values. That includes being conscious of its environmental impact (Monos is Climate Neutral Certified and a member of 1% for the Planet) and keeping its leadership team fully invested in the brand’s future.
“Looking on the surface, it's really easy to say, ‘Oh, it's another Instagram brand and it just all looks the same,’” Tam said. “But I think the difference really is intent. We are truthfully trying to build a generational legacy brand.”