'Pent-up demand,' weddings, push Indochino to record sales

Vancouver-based suit-seller expands, with 21 new stores in Nordstrom locations by July 2

Drew Green
Indochino CEO started talking with Nordstrom executives about stores within stores about four years ago | Rob Kruyt

Dozens of new stores, and "pent-up demand" for wedding-related suits, shirts and accessories has pushed the omni-channel, menswear chain Indochino to record monthly revenue, CEO Drew Green told BIV on June 23.

Green's Vancouver-based company is in the process of opening 21 new locations within Nordstrom stores, with 10 open so far, and another 11 set to be in operation by July 2.

"We see a lot of opportunity to grow to 40, 50, or 80 showrooms with them," he said. "We're just going to take one step at a time."

The 21 new stores within Nordstrom locations will give Indochino 79 physical locations across Canada and the U.S. – 26 more than the 53 locations that were in operation pre-pandemic.

Indochino's kiosks inside Nordstrom locations have Indochino workers who take customers' measurements for made-to-measure suits, as well as help them find accessories.

Nordstrom staff then provide free alterations if suits Indochino sends to customers do not fit properly, and need to be adjusted.

Indochino has long offered free alterations to its customers who have ordered clothing either online or through Indochino showrooms.

Green would not reveal his company's annual revenue because many different private shareholders own Indochino.

It is the wedding business that Green credits as being particularly responsible for driving new business.

"We are seeing a surge in our wedding business, and we expect that to last," Green said.

"Tens of thousands of customers come to Indochino every year to get fitted for their weddings, and, obviously, in the last 15 months, there have been virtually no weddings."

Retail analyst, and RetailInsider.com owner Craig Patterson told BIV that he agrees there is likely to be substantial pent-up demand for wedding wear.

Bigger picture, however, he has his doubts about future sales growth in the men's business attire sector.

"I don't want to be too negative about it, but men do stop shopping during a recession, and, we're sort of in a quasi-recession situation," he said.

"There is going to be a bit of a rebound in terms of men dressing up more, as things get a bit back to normal, but will they be doing smart casual? Or will they be doing suits?"

Patterson said the pandemic helped many middle- and upper-income earners accumulate disposable income because those individuals were able to keep their jobs, but were not able to take luxury vacations or dine out in restaurants.

This, he said, could kickstart some "hedonistic" spending.

When Kyle Vucko and Heikal Gani founded Indochino in 2007, the two University of Victoria business students envisioned Indochino being an e-commerce-only suit seller.

They landed financing from former Yahoo! Inc. president Jeff Mallett and AbeBooks builder Hannes Blum.

Then came a customer drive that included pop-up shops, which had a travelling tailor, who took customers' measurements.

They then started opening permanent bricks-and-mortar showrooms.

Green took the reins as the company's CEO in 2015, when the company had seven showrooms.

He had previously founded, and grown the e-commerce site Shop.ca, and he set his sights on building a stronger bricks-and-mortar presence for Indochino.

Green told BIV in 2016 that his aim was to have 150 showrooms by 2020. He continued netting new investors, such as China's Dayang Group.

While Indochino's physical presence remains far below that lofty goal, its Nordstrom partnership will help it gain a presence on the ground in new locations in states, such as Utah.

Four Indochino kiosks opened in Nordstrom stores late last year, as a test, Green said.

Six more kiosks opened earlier this year, while the other 11 confirmed stores within stores are poised to open soon.

Organic expansion via new showrooms has also helped increase Indochino's store count.

Nordstrom is Indochino's first partnership that involves stores within stores, and the pact has been in the planning stages for years.

Green said talks started about four years ago, and that the two companies signed a contract in December, 2019, to launch the initiative. The plan then was to open the kiosks in April, or May, 2020.

"When the pandemic hit In March, [2020,] we looked at each other, and said, 'Hey, you know what? Let's not launch, because retail is almost entirely shut down.'"

Indochino's sales were ravaged during the pandemic, and hit a hit a nadir in April 2020, Green said.

More than 80% of Indochino's business is in the U.S., where restrictions have loosened and a general reopening has taken place much faster than in Canada.

gkorstrom@biv.com

@GlenKorstrom