Indochino lands $42 million financing from new Chinese partner

Dayang Group invests capital, plans to be a manufacturing partner and will have board representation

Indochino CEO Drew Green plans to triple the number of fabrics that customers can have in a suit | Rob Kruyt

Chinese clothing manufacturer Dayang Group is investing $42 million in Vancouver-based menswear seller Indochino and will become a manufacturing partner for Indochino, the company announced March 9.

Indochino, which has seven showrooms but generates most revenue from online sales, will use the money to expand selection.

That means three new suit “silhouettes,” or essentially the option to have different fits, such as a slim fit, for the same suit. Expanded selection will also come as fabric choice is tripled and the range of personalization options is quadrupled.

One new personalization option for the custom-made suits, for example, could be different button colours and sizes.

The new capital will also enable Indochino to expand its number of showrooms and spend more on marketing.

“It sounds like they could probably get a lot of cost savings through this partnership,” said Retail Insider Media analyst and owner Craig Patterson. “That’s particularly so if the Chinese company has a manufacturing facility and will help Indochino by making the suits.”

Dayang makes suits for a range of global brands, such as Ralph Lauren, BCBG, J-Crew and Banana Republic.

“Both Dayang and Indochino share the belief that made to measure is the future of apparel, so this strategic partnership came about quite naturally,” said Dayang’s chairwoman and founder, Li Guilian, in a release.

“The investment opportunity [Indochino CEO] Drew [Green] and team presented provide our organization with multiple long and short term benefits. We were looking to increase our operations in this rapidly growing category, and Indochino had the expertise, along with a strong focus on growing its business into a global brand and leader in the made-to-measure category.

A representative from Dayang will also join Indochino’s board.

Green told Business in Vancouver last month  that about 70% of Indochino’s sales are to U.S. residents while another 25% come from Canada. 

Green believes Japan is the country with the biggest growth potential. Not only are many of its residents well off enough to afford suits that sell for between US$500 and US$800, but wearing suits is part of that country’s business culture.

The company’s website is in English only, and its prices are in U.S. dollars. Green, however, told BIV that this will change soon, when six other currencies are added as well as other languages.

Click here to read a profile of Indochino CEO Drew Green.