Heikal Gani, Jeffrey Mallett, and Kyle Vucko
A tailor's job might seem darn hard to offshore. But two college pals not only have figured out how to do it; they've turned it into a dot-com business that has attracted backing from former Yahoo! (YHOO
) President Jeffrey Mallett and customers in 60 countries. Profits at their startup, "IndoChino"
, have been a bit more elusive, however. Kyle Vucko and Heikal Gani came up with the idea of custom-tailoring men's suits via the Internet in 2006, when both were students at the University of Victoria in Canada. (Vucko, now 24, was studying commerce, while Gani, 27, was majoring in political science and psychology.) Gani needed to buy his first suit for a conference. He wanted something from Hugo Boss but ended up with a cheaper pair of pants and jacket that needed $100 worth of tailoring to fit well. Through a university mentoring program, Vucko met Hannes Blum, CEO of Internet book retailer "AbeBooks"
, who fronted them $40,000. The duo dropped out of school and went to Shanghai to line up a network of tailors who could assemble suits, one at a time, from measurements supplied by each customer. They launched their Web site in September 2007 and booked their first order a few days later. Since then, Vucko and Gani have raised $650,000 more from other investors, including $175,000 from Mallett, who is now IndoChino's chairman. After finding it too hard to manage 40-plus individual tailors, they moved their business to a single factory in Shanghai. Shoppers get fitting instructions from an online video. They're promised their suit, priced at $349 to $429, within two weeks. If it doesn't fit right, IndoChino will pay $75 for local retailoring, and if something is still wrong, buyers can ship it back for a free redo or refund. Vucko says 12% of shoppers aren't initially satisfied, but he compares that with a 20% return rate for e-tailing in general. The Vancouver-based chief executive won't disclose revenue, but he says sales nearly quintupled last year, with 35% of orders coming from repeat customers. He and Gani, who is chief creative officer and has remained in Shanghai, hope to raise at least $1 million this spring to fund more marketing. As for profits, Vucko adds, maybe next year.
—Michael Arndt (posted on Mar. 9, 2010)