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To Sell Custom Shirts, J. Hilburn Borrows From Avon, Amazon

Shoppers cannot buy shirts by J. Hilburn, a Dallas startup that sells custom-made menswear, in any retail stores, on Amazon.com, or anywhere else online, for that matter. Nonetheless, the company expects to sell 60,000 of them in 2010.

All the sales are made by commission sales reps who visit customers in their homes or offices to take measurements and suggest fabrics and styles. They send the selections to J. Hilburn’s factory outside Macau, China, where shirts are cut and sewn from Italian fabric. Buyers get them in two to three weeks. J. Hilburn’s custom shirts cost between $80 and $150, considerably less than garments of the same fabrics at high-end stores, the founders say.

Some 30,000 shoppers have bought clothing or accessories from J. Hilburn, and 93 percent of customers return for a second purchase, says Hil Davis, 38, who founded the company in 2007 with Veeral Rathod, 31. The 27-employee company’s sales have tripled each year and are projected to hit between $9 million and $10 million in 2010, from $1 million in 2008, Davis and Rathod say.

“Forty-six percent of consumers don’t like to shop. Most of them are men,” says Marshal Cohen, an apparel industry analyst at consumer research firm NPD Group, citing the firm’s data. Davis and Rathod, who both worked in finance before starting J. Hilburn, say they’re trying to design a retail business for these consumers: professional men who typically view buying clothes as a chore, not a pastime. “No one’s really thought about how to engage male shoppers,” says Rathod. To do so, they’re borrowing such practices as the direct sales model of Avon, the lean supply chains and customization pioneered by Toyota and Dell, and the ease of shopping through Amazon.

The Best, Not the Most, Salespeople

While new customers can contact sales reps through J. Hilburn’s website, most of J. Hilburn’s clients come through referrals, and the majority are men who have never bought custom shirts before because they’re too expensive, Davis says. The direct sales model eliminates the retail markup and makes them affordable to a broader market: Davis says they target households earning at least $75,000 a year. The company has 650 “style advisors,” reps who make commissions of between 12 percent and 25 percent on clothing they sell. Most are women with school-age children looking for extra income, Davis says. As in other direct sales companies, the style advisers get a cut of sales by other reps they recruit. Each rep can recruit only five others directly beneath her, and the sales organizations can be only six layers deep, so Davis says their incentive is to find the best salespeople, not to recruit the most.

Amy Mancini started selling J. Hilburn shirts in 2008. A former nurse and mother of three in West Boylston, Mass., Mancini says she spends between 20 and 25 hours a week managing her team of 55 reps and visiting customers in Boston. “I have clients anywhere from the college student ... all the way up to the president and CEOs of Fortune 50 companies,” she says.

The in-person sales calls are crucial to getting measurements right and making customers feel comfortable buying a garment they can’t try on, Davis says. Customers’ measurements are stored in J. Hilburn’s database, and the company plans to launch an online store early next year where men can order new custom shirts once they’ve been fitted.

Sell Before Fabricating

The model removes some traditional up-front costs of retailing. “You’ve got a sales force you’re not paying until they sell things. You’re not paying to make the shirt until the shirt is sold,” says Brian O’Malley, a J. Hilburn board member and partner at Battery Ventures, a Menlo Park (Calif.) venture capital firm that has invested $7.25 million in J. Hilburn.

Making custom shirts brings its own inefficiencies, though. One sewer at the company’s contract manufacturer in China can make only five or six shirts a day. “Ralph Lauren goes in and says we want to make 100,000 shirts,” Davis says. “When we first started we sent over 50 shirts in a month. They’re like, why are we doing this?” He says it took the factory a year to become comfortable with the process, and J. Hilburn recently hired its chief operating officer from General Electric to streamline its manufacturing and distribution.

Along with launching online ordering next spring, Davis and Rathod want to trim the time it takes to get clothing to customers from up to three weeks now to two weeks or 10 days. Among other steps, J. Hilburn wants to box individual orders leaving the factory in China so they can be shipped directly to customers when they reach the U.S. port. “The apparel supply chain hasn’t been evolved since the 1920s,” says Davis. “That’s our opportunity.”

To contact the reporter on this story: John Tozzi at jtozzi2@bloomberg.net

To contact the editor responsible for this story: Nick Leiber at nleiber@bloomberg.net

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