Menswear retailer Indochino has struck a deal with Canadian media giant Postmedia that will give Indochino $40 million in free advertising during the next five years in exchange for providing Postmedia a share of revenue and the opportunity to buy shares in the company at current prices.
Postmedia has more than 200 newspaper brands in Canada.
“As part of our 2016-2020 plan, we’ve boldly sought out strategic alliances to help us achieve our business goals and this mutually beneficial partnership will no doubt have a profound impact on our growth in Canada,” said Indochino CEO Drew Green in a release.
He expects Postmedia to promote Indochino’s custom-made suits and shirts to its average of 13.4 million monthly unique digital visitors and 8.3 million weekly print readers in the form of print, digital and native advertising.
“We're boosting our marketing activity to the equivalent of Postmedia’s largest advertisers, whilst at the same time lowering one of our largest expenses. Both sides have a vested interest in making the partnership work, which optimizes the chance of success and greatly reduces risk. It's a winning formula and one that I hope will pave the way for similar ventures in other markets.”
Postmedia president Andrew MacLeod similarly is excited with the deal.
“We believe it's a perfect fit,” he said.
“This is a great opportunity for two companies to leverage each other's strengths in order to grow their businesses.”
Much of Indochino’s business is from online sales but the company also operates 17 showrooms, including one in Manhattan that it opened in July.
Last year, Business in Vancouver reported on Postmedia reaching a similar deal to share revenue with the financial-technology company Mogo Finance Technology Inc. (TSX:MOGO).