Vishal Melwani: That’s what a lot of people take for granted. You go up and you pitch your business. You focus on metrics and what you want to disrupt. Really, everyone’s a human being. Every human being that I know of, especially in business, loves stories. If you can’t tell a good story, you’re not going to get anything out of it. We went up there and said, “I’m a third-generation tailor. This is what I grew up in and we wanted to create a business for the guys that we know. Our guys are party animals. They’re business minded. They want to have a great time and pay a lot. They want to look great. We’re unapologetic about it.” Luckily enough, we took home first place. From there, we got our first seed check from Dapples for $500,000.
Sramana Mitra: How much did you raise?
Vishaal Melwani: That seed round was for a total of $2.2 million. We closed this in August of last year . We had Dapples, Naxuri Capital, Greycroft, and Schultz from Starbucks. We have a lot of great guys focused in and around commerce and product. To be honest, we have great relationships with every one of our investors because of the fact that they all understand the space. We didn’t take checks from anyone who was trying to get into the product space. We were oversubscribed over $9 million. I feel that we did make the right decision. We are now able to scale the brand. Last year, we did about $5 million in sales. This year, we’re running on a trajectory of doing $15 million more.
Sramana Mitra: Since you raised all this funding, what has evolved? What are some of the key strategic things that you’ve done to get the traction that you’re getting?
Vishaal Melwani: Believe it or not, not a lot has changed. Facebook is still our number one user acquisition mode. It is still one of the best ways we can reach our customers. We have added a lot of things – social, Pinterest, blogs. Now that we have the money, we are able to tell the story on a bigger pedestal but at the same time, still understand that reasonable and responsible growth will outlast irresponsible growth any time. You have companies who have to scale back because of irresponsible growth. For us, we’ve been able to think clearly and say, “Yes, we could go down that road. We could spend $150,000 on Youtube Pre-roll and see how it works or we could put this money here.” We were really clear when we were making decisions. We knew how to leverage one against another and that lead us to remain calm and make good decisions.
Often, a lot of young product companies raise an obscene amount of money and throw tons of dollars on things that don’t really have ROI. Unfortunately, it’s too late to know. Our expertise in this field comes back into the story. That happens every day. Every day we realize, “Ten years ago, we did this with Versace and it didn’t work. Why would we do this now?” History does come back full circle again and we have lived through this. We were able to make decisions a lot better. So far, we’ve been pretty good.
Sramana Mitra: You’ve raised how much total capital so far?
Vishaal Melwani: $2.2 million.
Sramana Mitra: That’s all? $2.2 million and you’re getting up to $15 million in revenue this year?
Vishaal Melwani: Yes.
Sramana Mitra: That’s awesome. You’re still based in Las Vegas?
Vishaal Melwani: We’re based in both Las Vegas and Los Angeles. All of our development, websites, and everything in terms of engineering or core creative happen in Orange County, California. We do a lot of logistics out of Las Vegas. Now the logistics will really be moving to both ends of the US. We have a Kentucky fulfillment center that we’re currently setting up full scale.
Sramana Mitra: The segmentation remains the same?
Vishaal Melwani: Yes, customer segmentation remains the same.
Sramana Mitra: How big is the market in your assessment?
Vishaal Melwani: Last year, men’s wear market alone was about $5.3 billion in sales. Corporate men’s wear, it was right over $1.3 billion. That’s suits, shirts, and ties, whether it’s high fashion or not. We really feel that this market is really very vast.
Sramana Mitra: I actually know this business quite well because I ran a company in women’s fashion about 15 years ago. Fashion on the Internet was in its infancy. I imagine that even if the men’s corporate wear market is $1.3 billion, there are segmentations within that. What is the precise band for your price point?
Vishaal Melwani: I wouldn’t know the exact number to date. Around 53% of that $1.3 billion is within what they consider to be the fast fashion price point. Fast fashion price point is $0 to $300. That’s exactly where our sweet spot is. With recession, a lot more people are looking for bargains and sales. At the same time, you have a lot of these higher-end guys who are not relenting on price. We do feel that we are at the better side of the market.