Vancouver-based Indochino, an ecommerce retailer that creates made-to-measure suits, has raised CAD $42 million from Chinese global apparel manufacturer Dayang Group.
Indochino plans to use the investment to accelerate the company’s expansion plans in North America — the company currently has seven physical stores — increase its media budget and product selection, and create operational efficiencies. The company says it will reduce variable production costs, optimize fixed costs and enhance its virtual inventory model.
“My objective as incoming CEO of Indochino was to create a five-year business plan and associated investment strategy that would position the company to become an undisputed global market leader in made-to-measure apparel. This alliance is the first phase of our investment strategy, and we will continue to explore strategic opportunities that further accelerate demand and distribution for our brand and products,” explained Drew Green, CEO of Indochino. Green, the Shop.ca founding CEO, took the helm as Indochino CEO just four months earlier.
“The supply-focused partnership with Dayang Group combined with strategic investment strengthens our ability to achieve our 2016-2020 plan, and is a testament to our team, who was able to make this happen in just four months,” he said.
Indochino will enter a long-term strategic alliance with Dayang Group, which currently manufactures suits for a range of global brands like Ralph Lauren, BCBG, J-Crew, and Banana Republic. Indochino said this will help the company reduce variable production costs and optimize fixed costs. A representative from Dayang Group will join Indochino’s board.
“The investment opportunity Drew and team presented provide our organization with multiple long and short term benefits,” said Madame Li, founder and chairwoman of Dayang Group. “We were looking to increase our operations in this rapidly growing category, and Indochino had the expertise, along with a strong focus on growing its business into a global brand and leader in the made-to-measure category. We look forward to a long and mutually beneficial partnership for years to come.”