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Australian entrepreneur Luke Grana, 32, seen at his company's, 'Grana', office
space in Hong Kong (AFP Photo/Anthony Wallace) |
Hong Kong
(AFP) - Luke Grana arrived in Hong Kong with no contacts, cold-calling 'angel
investors' he'd found on LinkedIn armed with only his CV, a business plan, and
some big ideas to overhaul fashion.
In little
more than two years, his eponymous clothing store amassed $6 million in seed
funding and has become the go-to shop for under-35s seeking quality staples for
their wardrobe.
And yet
Grana is not a designer, has little fashion experience, and his inspiration
came from a business brainstorming session rather than a passion for couture.
What he
does have are plans to shake things up.
"The
way we shop for clothes is going to change," the 32-year-old says.
Global
fashion sales currently total around $1.8 trillion a year, with online
accounting for five percent, he says, citing a Euromonitor report.
"That
is forecast to grow to 30 percent by 2030," he adds suggesting Grana,
which has no physical stores -- only a fitting room space where customers can
try the clothes before buying online -- is well placed to take advantage of
this shift.
The current
system, with its reliance on expensive shop space, middle men, and vast
inventory, he insists is "hopelessly inefficient" -- and results in
opaque pricing.
"Gen Y
is more focused on transparency," the Australian entrepreneur -- part of
Generation Y himself -- says.
"I
made things simple. So if a t-shirt costs $7.50 to produce, we'll sell for $15
-- a straight forward mark-up."
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Grana brand
uses world renowned material such as Chinese silk from Huzhou
or Peruvian Pima
cotton, sourced from the same mills that work with luxury brands
such as Ralph
Lauren and Lacoste (AFP Photo/Anthony Wallace)
|
Ahead of
the curve
Quality is
his other pillar. The brand uses world renowned material such as Chinese silk
from Huzhou or Peruvian Pima cotton, sourced from the same mills that work with
luxury brands such as Ralph Lauren and Lacoste.
"We
deal direct with the mills and factories, items are then shipped to our
warehouse and then shipped to the customer," he explains.
Hong Kong,
the world's biggest cargo hub, is well suited for his global audience -- the
US, Australia and Singapore are also key markets.
Of the
hundreds of cold-calls he made in late 2013, just one replied: banker Pieter
Paul Wittgen.
Wittgen,
now the company's COO, was impressed enough by both Grana and his ideas that he
introduced him to a wider network of 'angels'.
The firm is
now has backing by big name investors including BlueBell Group, distributors
for the likes of Christian Dior in Asia, and Golden Gate Ventures, a leading
backer of start-ups in the region.
Grana's
head of design, Anthony Hill, worked for Paul Smith.
On average
Grana's customers now spend $120 per order, while sales are above expectations
-- rising 25-40 percent each month -- he says.
Earnings
are currently being reinvested in expansion to Japan, Korea and eventually
China but Grana expects to be in profit by late 2017.
It may seem
an overnight success but for Sydney-born Grana this has been a long time
coming.
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Clothing
designer Natasha Pelling takes measurements at Grana's offices
in Hong Kong
(AFP Photo/Anthony Wallace)
|
In his
teens, he read company annual reports and business books. Aged 21 and still at
university he set up his first business -- a coffee shop -- using $15,000 of
life savings.
After nine
months he sold for $145,000 and went on to launch and sell -- at profit -- two
similar ventures.
At 24, he
set up Charge Point, an electric car charging infrastructure but sold up in
2012 when he realised the concept was "ten years ahead of the
industry".
He took
time off to "surf and brainstorm" with his profits.
"I
wasn't demotivated, I was really hungry," he insists. "During
brainstorming I realised there was a disruption coming in fashion."
But his
next start-up Coachy was a webcam teaching service -- an "Airbnb for
tutoring" in his words.
Again he
found his ideas were ahead of the curve: internet speeds then could not support
his idea, so he closed up.
"I
learned the importance of being in the right market at the right time."
'Do
things differently'
Grana's
eureka moment came during a holiday in Peru, where he came across Pima Cotton.
Within the week he had visited mills and bought samples for friends and family.
"Based
on their reaction I knew I had found my product. But I didn't know about
styles, pricing or how to merchandise," he adds.
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On average
Grana's customers now spend $120 per order, while sales are above
expectations,
rising 25-40% each month (AFP Photo/Anthony Wallace)
|
So he went
and got some shop floor experience working at Zara and French Connection.
Grana seems
assured this is his moment.
Certainly
the focus on "timeless wardrobe essentials" is prescient: British
design house Burberry announced a move to 'seasonless collections' as the trend
for decluttering sees fast fashion falling out of favour.
At Grana
they focus on timeless colours and and run a limited number of seasonal ones.
"There
are no sales, just one standard price year round."
Social
media presence has helped spread the word quickly.
Grana's
adverts pop up regularly on Facebook, 17,000 follow the Instagram account, and
it uses Snapchat to give a glimpse into the mills and factories it uses.
Grana
concedes "fashion has a bad reputation" for exploitation but is
confident his firm does not use child labour, adding independent safety audits
of production will begin this year.
"I
don't want to copy anything from the traditional model," he says. "We
are doing things differently."
