You don't have to be a fashion guru to know that the pandemic has changed the way people dress. People swiftly ditched jeans, or heels, or anything uncomfortable, while loungewear, sweatpants and other such roomier, looser garments became de rigueur. Even Anna Wintour, global editorial director of Vogue, who for long scoffed at the idea of sweatpants as fashion, was spotted in a pair on the magazine’s Instagram page.
Of course, apparel makers had to follow the changing trend, especially ones that specialise in workwear for women. Like FabAlley. The Delhi-based brand spent the lockdown months of April and May last year in overhauling its collection and soon launched a line of lounge-wear and clothes that could be worn through the day.
“We designed clothes that were roomy, and stylish across seasons, but also crafted with skin-friendly fabrics like cotton and linen,” says Tanvi Malik, co-founder of High Street Essentials (HSE), which houses FabAlley and its sister brand, Indya. The company also designed capsule collections (a limited edition line that is more functional than stylish) for “above-the-keyboard” dressing. It also ensured customers could access these new designs, beyond just their online channels, by offering them the option to try and buy clothes at home, or to book an exclusive time slot at one of their 33 stores.
“We started working on these lines in early Q1 (FY21). It meant that by the time services resumed, we had a fresh, new, and very relevant catalogue to offer to our customers,” says Malik. “For both FabAlley and Indya, these categories performed extremely well and carried online revenues till markets opened up again,” adds Malik, who started HSE in 2012 with Shivani Poddar, her friend of 22 years.
Online sales were of paramount importance for the duo as stores—both their own and department stores like Lifestyle and Central that stocked their products— were either shut or saw decreased footfall.
“Online picked up really well for us. Once things opened out, we grew to levels which were 100%- 120% of previous years’ online sales,” says Malik. She adds that despite the setbacks, HSE’s revenue in FY21 was about 80% of the previous year’s turnover, when it clocked gross sales of ₹170 crore. Its monthly sales are roughly ₹12 crore now compared with ₹20 lakh in 2013.
One reason companies like HSE have been able to salvage their turnover last financial year has been the forced rise in first-time online shoppers. A near 30% increase, estimates Ankur Bisen, senior vice president, Technopak Advisors. He, however, cautions that clothing and fashion sales may remain muted for now as people stay at home, avoiding travel or social functions. “That doesn’t mean that the demand for clothing will go away, but it will change into something that is more basic, and more comfortable,” he adds.
FabAlley is also one of the few women-focussed online companies in India that have successfully juggled both online and offline channels. Devangshu Dutta, chief executive of retail consultancy Third Eyesight, believes the focus on younger women has helped. “A lot of the women-focussed sites target younger consumers. Their target profile is of a person who is more independent, and financially independent as well. They don’t have any problems transacting online, and the demographic is growing,” he says.
The pandemic has also led to a shift in consumer preference towards not just comfortable clothes, but also slow fashion, sustainable clothing, and wellness. Keeping that in mind, Indya launched its first natural, sustainable daywear line called Earthen. It also expanded into skincare with a line of products that fuse ayurvedic and traditional Indian ingredients with popular skincare agents like hyaluronic acid, Niacinamide, and retinol.
But Malik and Poddar are aware that fashion trends can come and go faster than seasons, especially for the young, millennial women they cater to. With that in mind, they are bringing key production processes, like embroidering and printing, inhouse. That will allow HSE, which employs about 800 people, a 30-day ‘mind-to-market’ production schedule, comparable with fashion giants such as Zara.
“We’re really in-housing a lot of supply chain, which means we have complete control over our product from the time we make the sample, to fabrics to processing, to essentially every step of the way, to have closer cycles,” says Poddar.
That is especially essential since fashion will never go out of, well, fashion. Despite a 27% slide in 2020, estimates BCG, India’s apparel market is expected to grow about 18% through 2024. The biggest push is likely to be from ecommerce sales, growing at a 27% CAGR over 2019-24, with grocery and fashion being the primary drivers, according to a report by EY and Indian Venture Capital Association.
HSE, though, doesn’t rely only on India. It delivers to about 50 countries and nearly 40% of its direct-to-consumer (D2C) sales come from abroad. Roughly 30% of the orders on Indya come from countries like Canada, the U.S., U.K., U.A.E., and Saudi Arabia. “We do have a large NRI base and we are planning to double down on that. We are also looking at more countries, and within (countries that we are present in), we are looking at expanding our base,” says Poddar.
HSE’s preferred route to expand internationally is by partnering with top-class marketplaces. FabAlley started selling on Namshi, a Dubai-based online retailer, about six months ago. It has also partnered with Singapore-based Zalora to cater to the Southeast Asian markets, and with Amazon for the U.S. market. This year, it will also go live on e-commerce platforms like Germany-based Zalando and Australia-based Iconic. “We will be live on at least five or six key marketplaces and that covers almost 60%-70% of fashion shopping online for the world,” says Poddar.
To fund this D2C expansion, both domestically and internationally, and to add personalised shopping solutions, HSE raised `25.50 crore in May. The funding round was led by existing investors Elevation Capital, India Quotient, Dominor Holding as well as family offices. It had also a ₹20.75-crore internal funding round last year that helped expand its fashion line.
One area that HSE won’t spend on is opening more stores, temporarily putting off plans to expand its 33 stores to 50 stores. “It is a capex-heavy expenditure because there are rentals, deposits; then there’s the entire cost of fitting and setting up the store,” says Malik. “Once the market is ready, once the lockdowns are lifted, and a good number of people are vaccinated, and they start stepping out again, we will, of course, revisit that,” she adds.
HSE, however, is making up for that by amplifying its focus on online expansion and increasing its categories of clothing lines. “We’re really focussing on building Indya and FabAlley as holistic, millennial women fashion brands that are completely local,” says Malik.
(This story originally appeared in Fortune India's June 2021 issue).