J. Hilburn gets $5M for men's luxury fashion

The company takes a new twist on eCommerce: real-life social marketing

Remember how Bonobos used to be all about men’s pants?  Well, if you’ve been following the site, you’ll have noticed that it now curates a wide range of other products as well, including shirts, outerwear, shorts, shoes, suiting, and accessories. As it turns out, doing direct sales online for a clothing brand is really difficult. It’s even more difficult when you’re a direct sales company for men’s luxury fashion, like J. Hilburn. So how has J. Hilburn managed to grow revenue 2.5x in 2011 and nail down an impressive 93% reorder rate among its customers despite the difficulty of being a direct sales luxury fashion brand? By having people on the ground. And it’s probably this unique eCommerce twist that has won the affection of Bridgescale Partners, which has led a $5 million Series C round of funding, with participation from existing investor Battery Ventures.

At first glance, the company seems like any other fashion eCommerce company. It sells fancy-pantsy clothes for men, which are custom-made and hand-cut from exclusive mills around the world. Customers provide their measurements, and J. Hilburn works with its factory partners to produce one single customized article of clothing.

And amazingly, the company manages to do it at significantly lower cost to the customer than any other retailer. For example, Zenga, a luxury clothing brand for men that works with retailers like Neiman Marcus, recently offered a luxury sport coat for $1695. J. Hilburn offered the exact same coat—literally, not just the same style, but the same material, which came from the same Italian mill—for $695. And $695 is on the higher end of J. Hilburn’s price spectrum. You can get a made-to-order J. Hilburn dress shirt for anywhere from $79 to $149, depending on the fabric you choose. Custom-fit baby cashmere sweaters are priced from $150 to $150. And jackets top out at $248.

How does J. Hilburn manage to produce hand-cut, individually manufactured, made-to-order articles of clothing for so cheap? The answer is that the company works in direct sales. J. Hilburn is a brand, but it doesn’t peddle its wares out to other retailers, like Neiman Marcus or Brooks Brothers. The company somehow—miraculously—managed to locate a few mills that would produce “onesies” (single articles of clothing instead of mass manufactured lines).

“At first none of the Italian mills would call us back,” CEO Hil Davis told me. “Finding a factory that would do a customized onesie for us was very difficult.”

But eventually those Italian mills did start calling back and J. Hilburn steadily built up a brand that became renowned in its hometown of Dallas, Texas.

The question became how to keep the momentum going. As I mentioned before, direct sales online is a difficult game, and many companies end up having to curate. But J. Hilburn solved that problem by building up an on-the-ground sales and marketing force in its “style advisor” fleet.

When a customer orders a shirt or jacket, he has to give his measurements—but he can’t just put the measurements into an order form (like most women’s online fashion shopping sites do). He has to consult with a style advisor and be measured. Many customers have the option of reaching out to their local style advisor for a meeting through the J. Hilburn website, but for the most part, customers are recruited by the style advisors themselves, 95% of whom are women.

Davis explained that style advisors have the opportunity to build a franchise, like Mary Kay or Avon, which is very appealing to stay-at-home moms. Those advisors pay $399 to get their starting kit and a full-day training session to learn the ins and outs of men’s luxury fashion, and then they’re sent out into the world to recruit the men of their community (which tend to be men between the ages of 30 and 50, making $75k to $250k a year). If style advisors can meet their sales quota in the first 90 days, J. Hilburn will reimburse them in full for the $399 they paid up front.

It’s those style advisors leveraging their real-life social networks that accounts for the rapid growth in J. Hilburn’s customer base. Today, the company has over 30,000 customers—10,000 of which were added on in just the last six months. But Davis is realistic about how these things work: he knows that in a typical sales scenario, a style advisor goes up to one of her neighbors and tells him about this new brand she’s selling, and he probably somewhat reluctantly says, “Okay, because it’s YOU, I’ll try it.” So to make sure that customer comes back, Davis says the company makes sure the product on the end of that transaction is amazing. And then next thing you know, that guy’s mind is blown by his amazing dress shirt and he tells his friends. You might call it real-life social marketing.

And it’s working. Customers are coming back in droves, and they’re spending more each year and visiting more often. The average customer will spend over $600 this year. By comparison, in 2008, the average customer spent $200, in 2009 it was $300, and in 2010 it was $400. Furthermore, customers are returning more often—two to three times a year as opposed to once a year.  

What does J. Hilburn attribute its success to? In short, good customer service. “You have to build the product and a relationship,” said Hil Davis, who added that this is what makes Bridgescale partners such a great match for the business. “They really took the time to understand that. They spent a lot of time with style advisors in the field. I would say most VCs know all about eCommerce, but not all of them know about consumers and commerce.”

This round brings the company’s total raised to $12.75 million.