Why is Indochino so optimistic?

From the C-Suite newsletter: The men's retailer is gearing up for what it sees as an imminent comeback of the fashion sector.

Indochino - T&S Photography

Many retail businesses, especially those in non-essential sectors like apparel, haven’t had much to celebrate in well over a year.

But leadership sentiment is surprisingly positive at Vancouver-based menswear retailer Indochino, as sales and category interest indicate a business resurgence is imminent, according to chief revenue officer Peter Housley.

“Things are great,” says Housley, Indochino’s most senior marketing leader. “The optimism at our office and in our retail network has never been higher [since the pandemic began].”

Since February, weekly sales as well as non-branded search and general demand for men’s suits, formal wear and weddings have been trending upward, he says. A spreadsheet containing the 30 to 40 performance indicators Housley tracks closely on a spreadsheet – from the number of weekly showroom appointments to average order value and ecomm revenue – has recently turned to a sea of green.

“We’re seeing really significant week-over-week gains – every week,” Housely says. “And that’s taking place both in the retail environment and for our ecommerce business.”

Indochino StoreCertain segments of the business remain weaker than usual, as many suit-wearing professionals continue to work from home. And retail sales at Canadian clothing stores were down 43% for the three months ending Jan. 2021, according to Statistics Canada data.

But overall, Indochino is anticipating a resurgence this calendar year as COVID vaccines continue to roll out, the economy continues to reopen and weddings begin taking place again.

For example, 41% of showroom appointments over the last few weeks have been wedding related. “We’re seeing a ton of weddings planned for the back-half of the year – fall and winter weddings are going to be super popular because of the anticipation that pandemic restrictions will be [relaxed].”

Housley’s optimism is in part due to Indochino’s heavy presence in the U.S., where 47 of its 57 showrooms are located. As the total number of Americans having received at least one shot of a COVID-19 vaccine approaches 40% (more than the roughly 20% of Canadians), demand is picking up – even as some jurisdictions continue to impose in-store capacity limits and other health and safety measures, he says.

“The big question, of course, is Ontario and Toronto.”

Home to five of Indochino’s ten Canadian locations (the other five being spread across Ottawa, B.C. and Alberta), Toronto has been closed longer than any other North American region in which it operates. And the company didn’t anticipate last week’s announcement for another four-week provincial lockdown.

“Other than Ontario, things are looking brighter,” he says. “Of course, we have to wait to see what’s happening with this third or fourth wave and some of these new variants, but we’re cautiously optimistic.”

Since the start of the pandemic, Housley says Indochino has taken a conservative approach to managing the business, significantly paring back media spend at the onset of the crisis knowing that suit demand would drop as business meetings moved online and weddings were postponed.

Indochino StoreWhen lockdowns were ordered, it temporarily closed retail stores, and upon reopening them, maintained stricter health and safety protocols and limited in-store capacity by offering fewer scheduled appointments. It also began offering virtual style appointments, which Housley says it intends to continue using when the need arises (as it has, once again, in Ontario). Throughout that time, Indochino fared relatively well, according to Housley, partly because the company doesn’t carry any inventory in stores.

Having observed increased momentum for several weeks, the CRO says his focus is now on waiting for the right moment to “really stand the business up again” and begin scaling media and marketing investments to align with demand.

“We are getting the marketing team and the ecomm team and the retail field teams organized and ready for a fairly major comeback.”

The company, which handles all marketing activity in-house, brought on Stephan Lukac (a former Best Buy digital and brand marketer) as marketing director in March. It has also recently added Alex Nazarevich (from BC Liquor) as director of ecommerce, Mari Chijiiwa (whose background includes roles at Vega and Lululemon) as creative director, and promoted Sarah Mayer to oversee all PR, social and brand communications for the brand.

“With four directors on my team, it really sets us up for growth, to help get us to the next level of our brand and our business, maintain our digital savvy, and at the same time, expand our brand capability,” Housley says.

Featured image: T&S Photography.