Disintermediation. A fancy word for a simple concept: cut out the middleman. A cost saving strategy that works…until it doesn’t. Disintermediating the retailer or wholesaler might work well for consumer packaged goods and college textbooks, but it falls short of the mark in the men’s designer and everyday suit markets where the designers account for the vast majority of the markup. For instance, a $600 suit in Nordstrom’s was likely purchased from the designed for $500, yet only cost $100 to manufacture. Given this, how can the consumer capture value in this market?
That simple imperative encompasses the mission statement of Combatant Gentlemen, a vertically-integrated e-commerce company that has been shaving sheep—and disrupting the men’s everyday suit market—since 2012. Combatant Gentlemen’s business strategy is to provide well-made, well-fitting, fashionable suits at an affordable price point. Its operating strategy is simple in concept: own every piece of the value chain, from the 67 sheep that provide the wool for its suits to the enterprise resource system that allows for just in time manufacturing and lower inventory costs. What Bonobos is to chinos, Combatant Gentlemen is to everyday suits…but at a better value. Combatant Gentlemen’s charcoal slim-fit suit retails at $160, dress shirts go for $30, and 100% silk ties can be had $15.
Interestingly, Combatant Gentlemen initially aligned their operations to meet only two parts of the overall strategy: great fit and quality. It quickly began to realize the cost savings that its vertically-integrated supply chain could offer. It now has what can only be considered a global supply chain: the 67 sheep reside on an Italian farm where they are shorn four to six times a year; this wool is then woven and sent to China where the suits are manufactured; Its premium Selvedge denim is sourced from Japan and manufactured in Los Angeles; finally—and perhaps most interestingly—its cotton comes from cotton plantations in India which the company also owns (it’s unclear whether they participate in the BASIX insurance plan or the eChoupal marketplace).
Of course, all of the disintermediation and vertical integration in the world would not be worth a damn if the suits weren’t any good. Enter CEO and lead clothing designer Vishaal Melwani, a third-generation tailor who began sewing at age six in his parents’ Versace store, and then later went on start a successful selvedge denim business. Bottom line: Melwani has the sartorial chops and sufficient gravitas to drive demand for his suits. You can learn more about Melanie and the business here.
A potential pain point among prospective customers is the reluctance to buy as important a piece of clothing as a suit online. Ironically, competitors such as Bonobos and Indochino have already blazed the e-commerce trail for men’s fashion, and Combatant Gentlemen’s target consumer—millenial males—are quite used to online shopping for items that are traditionally sampled and bought in-store (see: Warby Parker). To alleviate the concerns of those still on the fence, Combatant Gentlemen developed “Fit Tech,” an online application which recommends a size based upon the customer’s height, weight, neck size, and waist size. Melwani claims that it is accurate 98% of the time, an important factor given that the company provides free shipping and returns on all purchases.
The customer service support and innovation does not end there. The company offers a rewards program to incentivize repeat business, produces a YouTube channel that offers sartorial guidance, hosts a separate website called Unhemmed that purports to be “The Gentlemen’s Guide to Life and Style,” and occasionally has pop-up shops in major metropolitan areas. Since Combatant Gentlemen refrains from employing traditional marketing campaigns, these ecosystem building efforts serve to raise brand awareness and drive customer retention.
By any measure, the company is performing well. It had sales of $10M in 2014 and expects to double that in 2015. Additionally, though customer lifetime value has been increasing, 65% of sales are from new customers, say Melwani. However, unlike many companies in the ecommerce sector, Combatant Gentlemen has tried to avoid irresponsible growth. Says Melwani:
“Too many ecommerce brands fall in love with their logo and want to see it on everything,” Vishaal says. “It ends up being confusing to the customer and the business ends up with a warehouse full of unsold stuff. We would much rather focus on having our customers fall in love with our logo…it’s very easy to get wrapped up in irresponsible growth, but the little problems get big fast at scale and can break you,”
While Melwani may not be after irresponsible growth, Combatant Gentlemen’s product mix has certainly increased over the past three years. The company now offers bespoke suits ($280-400), as well tuxedos, dress pants, chinos, premium denim, and outerwear–all of which are offered at attractive prices compared to other players in the market.
Still shopping at Men’s Wearhouse? Remove the wool from your eyes and Dress Smarter.
7] Catherine Clifford. “Combatant Gentlemen.” http://www.entreprenuer.com (September 12, 2015)