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Building a New Online Fashion Brand: Combatant Gentlemen CEO Vishaal Melwani (Part 7)

Posted on Friday, May 23rd 2014

Sramana Mitra: What about team? What size is your team?

Vishaal Melwani: We’ve grown from a humble three to 22 now. The team is focused on three prongs: development and engineering, creative, and production. On the development side, we really focus on leading the cutting-edge on user interface. On our site, we focus on Fit Tech. A lot of guys don’t know their suit size so we’ve done stuff where we matched BMI to suit size.

For creative, we are always thinking of what to do next. For example, we just came up with something focusing on FAQs that we’re going to launch on YouTube. We got questions every day from different types of guys. We decided to take all of that to YouTube. On the production side, we’re always learning how to get better faster and stronger.

What’s unique about our story is we’ve taken production to the grain level. We plant our own cotton crops in India. We own 16 sheep in Italy. We shave our own sheep twice a year and then we export everything to China for production. We take it very seriously and it’s really the reason why we’re able to give these awesome prices. If we can source everything on a two-prong method, which means raw material and production, we will. We’ll make sure that we will be able to get it.

Sramana Mitra: What kind of financial outlay do you have to make to be able to go that deep into the vertical integration strategy?

Vishaal Melwani: Believe it or not, a lot of the factories that we’re dealing with have been hurt the most with the recession. We’ve set up long term contracts with a lot of these factories for scale. That was the number one goal. Our goal was to make 86% margin on every product for us to scale this company. The sheep for example, the cost for us to manage and upkeep these sheep is less than $3,000 a month. We are able to negotiate great deals and make sure that they’re getting taken care of – all the way down to the cotton in India and making sure that everyone is happy and working at a good pace.

Sramana Mitra: What is the margin that you think you’re able to generate by vertically generating to that extent?

Vishaal Melwani: Margin is between 13% to 16%. Let’s take a shirt for example. We plant our own cotton. That’s 13% margin to save there than if you were to buy the material. Since we handle all of our buttons, that’s about 18% margin that we’re able to save. There’re margins everywhere. We dissected it all the way down. We actually have our own ERP that helps with managing all of these.

Sramana Mitra: Interesting. One of your key strategies is deep vertical integration?

Vishaal Melwani: Absolutely.

Sramana Mitra: Anything else worth discussing in your story?

Vishaal Melwani: We pretty much hit it on.

Sramana Mitra: How many total people at this point?

Vishaal Melwani: 22.

Sramana Mitra: All these stuff that you’re doing in the vertical integration side is outsourced with partnerships?

Vishaal Melwani: Yes, one thing that we’re focusing on and one thing that we’ve noticed is that our guy has never gotten a suit or maybe doesn’t know how to get one tailored. We are launching an app that’s called Haberdash that will bring a tailor directly to your door to help you with your suit.

Sramana Mitra: Awesome. Good luck with your journey.

This segment is part 7 in the series : Building a New Online Fashion Brand: Combatant Gentlemen CEO Vishaal Melwani
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