Indochino will add to its retail presence this summer by opening four more “showrooms” in the U.S. over the next two months.
The Vancouver-based omnichannel men’s wear brand will open stores in New York, Chicago, Washington, D.C. and King of Prussia, Pa., between July 7 and Aug. 11. That will bring the number of stores overall to 17. Indochino refers to its storefronts as “showrooms” since unlike traditional retail, the locations carry no inventory. Instead, customers visit the store to be fitted and to personalize their suits and furnishings in a process similar to that employed by Bonobos and Knot Standard.
The first new Indochino store will be located at 25 Broad Street, across from the New York Stock Exchange in lower Manhattan. It’s expected to open on July 7. Next up is a location at The Shops at North Bridge in the River North District of Chicago on July 14. On July 21, a unit will bow at the Tyson’s Galleria in McLean, Va., outside Washington, D.C., and the last one will open on Aug. 11 in the King of Prussia Mall outside Philadelphia.
The showrooms will average 2,300 to 2,500 square feet, although the Chicago unit will be smaller, at 1,600 square feet.
Drew Green, chief executive officer of Indochino, said Washington and Chicago will be new markets for the company while there are already successful stores in SoHo in New York and on Chestnut Street in Philadelphia.
“In the span of a month, we will almost double the number of our U.S. locations,” Green said. “We’ve been prudently searching for the perfect locations to become available and are confident that launching all stores in quick succession will better serve our growing customer base while continuing to build a strong brand presence.”
Indochino, which had been rumored to be a potential takeover target for fashion-crazed Amazon, has been beefing up its management team as it expands its presence in North America. In April, the company opened three showrooms in Western Canada.
Green joined the company at the end of 2015 and last March secured a $30 million investment from China’s Dayang Group, one of the world’s largest suit manufacturers that counts Warren Buffett as a major fan.
Green has said he has no plans to sell the business and will work instead to expand organically. “We continue to grow in a profitable way,” he said. Although Green declined to provide more specific numbers, he said the company has seen sales rise 57 percent and gross margin improvement of 1,100 basis points over the past six months. He expects sales to end the year up 60 percent over 2016. Green said both earnings before interest, taxes, depreciation and amortization and net income are on pace to improve by more than $11 million in 2017.
The brand has shipped 68 percent more product year-to-date than last year and Indochino’s “virtual inventory model,” is proving successful. “We’re not burdened by inventory when we expand our retail footprint,” he said, adding that the showrooms become profitable in under a year. He believes that the brand can operate as many as 150 stores but that growth will be measured and slow. “We’re not just blindly opening stores,” he said. “We’re committed to keep growing the business in a strategic and sustainable way.”
Green said he expects to add at least one more showroom this fall in America.
Beyond the retail expansion, Green said he is brainstorming with Dayang about which product categories to add next year. “Customers only need so many suits and blazers,” he said. He expects to decide on which categories will be offered in 2018, “but it definitely won’t be women’s wear.”