InStitchu is a company that is trying to combine technology with old world tailoring. Bespoke without the price tag? For somewhere between $300 - 600 they'll deliver you a suit in 4 weeks that they say will fit you perfectly. I'd be lying if I said that I approached the business with 100% confidence as I'm quite skeptical in general of retail businesses and and the clothing space particularly.
Over the years I can't remember ever getting a decent return from an investment in a stock who's business is based on selling clothes to the general public. I liked what I heard from Robin McGowan and James Wakefield at the most recent of the BBY Disruptive Lunches, so instead of trying to go into all sorts of detail about the metrics behind their business plan I decided to just test them out by buying a suit. I got the idea after remembering the way I missed an absolute "gimme" of a trade by failing to buy into Japanese retailer Fast Retailing (9983) (owner of UNIQLO). One broker practically begged me to go into one of their storers and just buy a white T-shirt and guaranteed me that afterwards I'd understand why this stock was going up. Eventually I did buy a that T-shirt, but not before seeing the stock more than double in the meantime.
|Fast Retailing (9983) v. N225|
InStitchu appealed to me because I had a chance to be a very low touch buyer. I wanted to try and never meet an employee face to face. Here's how it went:
1. Get an account(s)
I was going to get measured using the mPort body scanner that links to Institchu. That meant I needed two accounts, one for InStitchu and one for mPort. I suggest you get your mPort account before going to a body scanner as it will save time once you're in the booth . . . . Oh, and personally I prefer not to be typing personal information into a terminal in a booth in a public place.
2. Get measured
I went to a body scanner in the centre of Sydney. You enter the booth and log in via a touch screen. The computer voice will guide you through what to do and point out where to hang you clothes and importantly where to stand.
It takes a couple of minutes to do the scan and you'll be asked to wait (in your underwear) while the computer confirms that they have a stable scan. It's probably less that 5 minutes and there's a lock on the booth, so no need to worry about unwelcome guests.
Once you have this you need to link it to your InStitchu account. As an aside your body scan can be used to calculate various health metrics, but you need to pay to unlock those functions. The first basic scan is free.
3. Choose a suit, style and . . . you get the picture
It's very straight forward. Choose a suit style, colour, fabric and add details. You can have different coloured lining, workable cuffs as well as the usual array of lapel styles and venting. While you're going through the process an instant messenger appears and an InStitchu advisor can help you through the process. I like this both from a design point of view, but also from a business angle because it gives InStitchu the chance to avoid the "won or done" nature of internet selling . . . if it doesn't work first time people tend not to give you a second chance.
It should be said that InStitchu doesn't just make standard lounge suits, you're offered dinner suits, jackets, shirts and various accessories. They also have some advice regarding mix n' matching various pieces.
I ran into a problem because for some reason my body scan wasn't downloading my measurements to InStitchu. I'll be honest and say without the instant messenger I would have given up and said no sale. But "Monica" offered me a free measurement service at their Sydney location and promised me that this could all be solved. I went to the office and got measured (normally $30). Even though this all went smoothly and I had the added bonus of getting to see and touch the fabrics I think InStitchu needs to solve whatever the problem there is with the link between mPort and themselves. I've asked the company to send me a comparison between the measurements taken by their "live" staff and mPort so I can see the tolerances involved and therefore the likelihood of post delivery adjustment being needed.
5. Payment and delivery
I paid $467 for my suit, but need to subtract from that $50 discount offered to investors who attended the BBY lunch. I also provided references for 3 friends that earned me a $35 credit for future purposes. My usual spend on a suit is closer to $2000 from a tailor here in Sydney. I'll be reporting back after I see the results. My expectations are fairly low as I always think the mantra "you get what you pay for" is both true and wise. If I get a suit that fits and lasts a once a week wear over a working year I'll be happy given the price.
The suits are manufactured in China. I assume they're using computer cutting for the patterns. The team told the lunch that they've gone through a few suppliers to help cut down on the error rates and to increase the overall quality of the garment. Margins are roughly 50%, but as I'm not a retail analyst I couldn't tell you how that compares with boutique tailors or department stores. The business is growing, with a surprising up-take from wedding related shoppers which makes up about 20% of revenue. That makes sense to me, what with this trend toward bigger weddings where the bridal party size can be pretty ridiculous in my experience. This means that you need to get matching suits, shirts and ties for all those involved and getting that at a department store or hire place just doesn't always work.
I'm not going to recommend you buy a suit or a shirt just yet from InStitchu, but if you're an investor I think it's worth checking out their business. In my mind I see this as just another reason to avoid owning shares in department stores.