New showrooms and a shift toward online shopping on Black Friday has helped Vancouver online suit-seller Indochino notch a 57% increase in sales during the first 11 months of the year, the company revealed December 5.
November sales strengthened those numbers with net revenue for the month up 109% compared with the same month in 2015.
“2016 has been a year of exceptional growth and improved profitability for Indochino, highlighted by the resounding success of our November 2016 sales,” said CEO Drew Green.
American consumers spent US$12.8 billion online in the U.S. during the five-day stretch between Thanksgiving and Cyber Monday, according to Adobe Digital Insights. That is up 15% compared with 2015, according to the research organization.
American sales are key for Indochino because Green told Business in Vancouver in February that about 70% of the company’s sales are in the U.S.
Retail Insider Media owner Craig Patterson said that he has been hearing that Black Friday sales overall were likely down in Canada although sales online were up because people increasingly do not want to fight crowds.
Indeed, Canadian Black Friday sales this year fell back to 2014 levels, according to DIG360, which is a Vancouver-based, retail consulting firm.
Just under half, or 48%, of 1,587 Canadians adults that DIG360 and Leger surveyed bought or browsed deals this year. That compares with 68% of shoppers who did the same thing in 2015.
“I’m curious what Indochino’s expenses are for the year,” Patterson told BIV on December 5. “It would be interesting to see how profitable they are and what the margins are.”
Green would not tell BIV exactly how profitable Indochino is but he said “our profitability incresased significantly this year, millions of dollars’ worth.”
The company announced in March that it had landed a $42 million financing from Chinese partner Dayang Group, which makes suits for a range of global brands, such as Ralph Lauren, BCBG, J-Crew and Banana Republic.
That cash has helped give Indochino financial stability as it expands its network of 10 showrooms. For example, it added two new showrooms in Metro Toronto in 2016 and now has three showrooms in that metro area. The new showrooms have more than doubled sales in Canada's largest metropolis.
Indochino also opened a showroom in Ottawa in 2016 and Green said he intends to continue showroom expansion in 2017.
“We offer a truly omni-channel experience, and intend to expand our retail footprint throughout North America and, in time, around the globe,” said Green.
Green has told BIV that 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.
Much of the company’s marketing is online and it claims that organic searches for the Indochino brand increased 76% in the first 11 months of 2016, compared with the same time frame a year ago.
The 220-employee company has a 12-member executive team including many newcomers that were hired in 2016, such as COO Clay Haeber, vice-president of finance Morgan Whitney, director of global supply chain Joseph Ford and customer service director Aly Habib.
Green said he is not currently seeking to hire any new executives.