As Shirting Company Ledbury Gains Momentum, It Looks Toward New Funding

If you haven’t heard of the Richmond, Va.-based shirting company Ledbury, you haven’t been scanning the pages of GQ very closely.

The three-year-old brand was founded by first-time entrepreneurs Paul Trible and Paul Watson soon after the two met in business school at Oxford, and they’ve sold more than 35,000 tailored shirts in the $135 range since. Along the way, Ledbury has also become a favorite of fashion editors, who have characterized the company’s products as “slim but not suffocating” and ideal for “haberdashery-hungry” customers who Trible describes as “typically high-net-worth guys between the ages of 35 and 50 – though we trend younger and older, too.”

Ledbury, which recently expanded into scarves, jackets, and ties, just raised a $2 million round from “friends, family, and a family office or two” in September, but given the company’s rate of growth, it’s already contemplating its next round a year or so from now. I talked with Trible this morning to learn more.

Neither you nor “the other Paul” were in the fashion business before Oxford, correct?

No, Paul [Watson] came to Oxford from the Defense Department in Washington; I’d been living in London for the previous four years and working in the nonprofit world.

And you decided the world needed yet another shirt company. Why?

We thought there was an opportunity to bridge ready-to-wear with custom offerings,so classic fit and slim fit sizes, along with small customizations like sleeve shortening. For us, we got spoiled, living in London and having access to specialists who do one thing well, whether it’s [bespoke] suits on Savile Row or shirts on Jermyn Street, and we had trouble finding the same sort of fit and quality in the U.S.. We thought for the right price proposition, we could turn that need into a business.

So how does an MBA learn to make shirts?

 

I’d been having my shirts made for four years on Jermyn Street by a premier shirtmaker named Robert Emmet and after an interview for a finance job that didn’t go particularly well, I went to see him and ask if I could learn about shirtmaking and work under him. The next week, I took a shirt apart and put it back together and it looked like an octopus, but within nine months, I’d learned a lot – not just about textiles but about the retail operation side.

And today, what do your retail operations look like? How much of your business is transacted online versus off?

Ninety-eight percent of what we do is online, though we have a store here in Richmond because we’ve found that if we put shirts in front of people they really respond, and we’ve occasionally done pop-up stores, including in Atlanta a few weeks ago, when we took over an empty retail space as a way to reach out to new customers and deepen our existing customer relationships. There’s a stage in the business where more stores make sense. [We’re not there yet.]

How are you reaching your customers?

The majority of our marketing has been word of mouth. It starts with one guy on the trading desk, then we’re sending 15 packages [to his colleagues]. We’re also figuring out our advertising and digital marketing mix.

Where do you source your textiles and where are the products made?

We source everything from eight Italian fabric mills, along with one English mill for cashmere. The manufacturing is all Europe based – Poland a few other places.

How many employees do you have at this point and what do they do, respectively?

We’re 16, and we do everything from marketing to branding to customer service and fulfillment, which we still manage ourselves at this point. We also have a small production team – it’s me and one other person – and a small e-commerce team.

Who are your biggest competitors? Charles Tyrwhitt? Brooks Brothers? How do you differentiate your business?

For us the whole thing is quick fit and quality. Sixty-five percent of our customers return after a year; we’ve had one customer who has ordered 124 shirts in 16 months. After the recession, we were pulling people down from their $300 dress shirts as they sought out quality at a value. What we’re finding as things improve are Brooks Brothers and Charles Tyrwhitt customers saying, “For a $30 premium, I’ll try something that might last longer and look better.”

We’ve also have a “short run” program, where we design five unique, limited-edition shirts every two weeks, and let our customers vote via Facebook which we should add to our core collection. So most [retailers] have four collections each year; we’ll have almost 25.

You offer free shipping, too, correct?

We offer free ground shipping and free returns for any reason. Our returns are 6.5 percent, which, for the retail business, is very low. It’s because we do all our fitting by inch and centimeter and men sort of know their sizes.

Of the many challenges you’ve surely faced, which has been the biggest challenge thus far?

From an e-commerce standpoint, we’re a tech business, so trying to learn everything from production and manufacturing and supply chain [concerns] to selling and managing a sophisticated e-commerce platform has required a steep learning curve. Thankfully, everything we learn provides us with some competitive advantage.

The inventory piece alone could overwhelm a business like yours, couldn’t it?

We were [featured in] GQ twice and in the Financial Times once in the first six months [of our business]. It was great, but we missed these huge [selling] opportunities because of inventory constraints; we sold out twice and it takes time to buy back into that product. For any business, inventory is a huge challenge; you have to prepare for success and failure, so it’s a balancing act.

You recently raised $2 million, but I understand you might look for more funding in 2013? How much more, do you know?

What we wanted when we started was prove out the product. At this point, people are responding; we’ve been growing at 2.5 times year on year. Now the question is: can we scale? That’s hard to do without changing the financial structure of the business, including ramping up on specialists, really testing our advertising mix and generally pouring more fuel on the fire, which is what we’re doing right now. If it works, in the next 12 to 16 months we’ll probably raise another round to ratchet up growth and buy into additional inventory – going not only deeper but wider into other categories. As for how much, we raised $2 million, so it would certainly be north of that.

Photo: Images courtesy of Ledbury.

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