Combatant Gentlemen – vertical integration so you can #DressSmarter

Combatant Gentlemen's vertically integrated supply chain enables them to offer stylish, quality menswear at an affordable price.

Value Proposition/Business Model

I first discovered Combatant Gentlemen through my fiancé who was in a need of a new suit for our many upcoming weddings. He wanted something that was stylist and well made, but wasn’t going to cost an arm and a leg. Combatant Gentlemen offered just that – one-stop online shopping for timeless, tailored menswear, made from quality materials and at an affordable price.

Shirts, which are 100% cotton, cost $30-$40, while suits and tuxedos made from Italian wool are approximately $200. Co-founder and CEO, Vishaal Melwani, who also happens to be a third-generation Versace tailor and designs many of the products, wanted to create a brand that “felt like a Hugo Boss…but (was) cheaper than Men’s Warehouse” [1] and has done just that. When my fiancé brought his suit to a tailor for minor alternations (the company advises that customers may still need to get minor alternations such as sleeve and pant hemming), the tailor thought the suit was $800. Combatant Gentlemen has also become a hit with young men on Wall Street who don’t have time to shop or visit a tailor but want to look sophisticated. Recently the company became the most shipped package to Goldman Sachs. [1]

In addition to offering quality menswear, Combatant Gentlemen also offers an easy online sizing tool called “Fit Tech”, and online consultation services where they provide fashion and additional sizing advice. The tool requires men to submit information that they already have easily available (e.g., height and weight) or could easily measure (e.g., neck circumference), and provides sizing recommendations so their products will fit and look their best. [2]

Operating Model

The secret to Combatant Gentlemen’s ability to offer such low prices is its vertically integrated supply chain. The company has cut out the middlemen and eliminated markups that result from designers, retailers, and wholesalers.

Screen Shot 2015-12-03 at 3.23.27 PM[2]

They pride themselves on the fact that they even their own sheep farm in Italy and cotton field in India. [3] Although the original designs and prototypes are created at their California headquarters, most of the manufacturing takes place overseas in places like China, India, and Europe [4], where labor costs are lower. By providing and utilizing their sizing tool, Combatant Gentlemen is also able to offer standard sizing and limit the number of SKU’s they produce. As a result of all of these factors, the cost of producing a suit is only $24-$37 plus shipping. [3]

https://vimeo.com/109657796

Performance Implications

Although Combatant Gentlemen has succeeded in its ability to offer quality at a good price, I have noticed that they struggle with stock outs. To manage costs, the company has tried a just-in-time manufacturing approach and only holds a few days of inventory [4]. However, as a result of their rapid growth in popularity and sales, they have struggled to maintain inventory levels. (I’m personally really hoping this gets fixed so my fiancé can get his tuxedo in time for our wedding.) To mediate this situation, they recently added a pre-order function that provides an estimated shipping date and allows customers to reserve out-of-stock items.

 

Sources

[1] http://www.businessinsider.com/combatant-gentleman-takes-wall-street-2015-1

[2] https://www.combatgent.com/dress-smarter

[3] http://www.mensjournal.com/style/outerwear/why-the-160-suit-makes-sense-20131113

[4] http://www.forbes.com/sites/lydiadishman/2013/01/31/e-commerce-newbie-combat-gent-heads-into-battle-for-a-piece-of-the-menswear-market/

[5] http://www.inc.com/graham-winfrey/why-combatant-gentlemen-is-the-warby-parker-of-suits.html

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Student comments on Combatant Gentlemen – vertical integration so you can #DressSmarter

  1. Thanks for the write-up. This might be the next place I try for my next suit (too late for Holidazzle).
    This is interesting that such a digital brand is facing stock outs. I can understand why they carry so little inventory, but is it worth the potential sales losses?
    The costs associated with this are understood, but customers may just run to substitute the suit with a competing good. I wonder if instituting a promotional strategy where the customer facing the stock out can be incentivized to accept a marginally lower price for the suit with a “buy it now” option in exchange for an increased lead time? This may reduce the cost of holding excess inventory and complement the just in time inventory strategy.
    Does that seem like an option that might work?

  2. Thank you for the interesting write-up, Carolyn. I think I’ll definitely be buying some things from this company in the future…The prices are great, and I hope that quality is what it is made out to be.

    This company reminds me of Bonobos (which was discussed in the summer CORe curriculum) in that it seems to create an online order system and manage costs by minimizing inventory. One difference with Bonobos, at least in the Boston market, is that I can go to the physical store and try the clothes on. This personally helps me since I like to see how the clothes look/feel before I buy them, but perhaps the no-questions-asked returns policy will helps consumers get over this reservation.

    I like Michael’s idea about allowing the customer to essentially pay a lower price if they are willing to wait for a longer delivery time. The stock-out issue, I would think, would tend to push away customers. Many people I know don’t buy a suit or tux until relatively close to an event, so these stock-outs may be pushing these customers to physical stores.

    I also wonder about experimenting with a membership business model (similar to amazon prime). For example, could the company make expedited shipping free to members, or exclusive access to new styles/trends for a period of time? In other words, might there be a way to price-discriminate or create a business model wherein they are more optimally exercising their operating model?

  3. Thanks, Carolyn!

    1) They do standard suit sizing (FitTech seems more like an interactive size chart than any kind of innovation). I wonder how they will last, long-term, in a marketplace flooded with only moderately more expensive, made-to-measure suiting (IndoChino, Blank Label, Suit Supply etc.).

    2) Do you think the high end quality claimed in their marketing is believable, particularly if the target market is high-earning young professionals such as investment bankers and lawyers who may already wear high quality suiting (such as Brooks Brothers)?

    3) I wonder if Combatant Gentlemen could benefit from different marketing endeavors such as “pop-up” stores in bigger cities or trunk shows. This would allow customers to experience the product first hand and overcome the hesitance about purchasing a suit (which is typically not a frequently purchased item) when they haven’t seen the quality first-hand. It would also avoid the overhead and high costs of maintaining permanent retail spaces.

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