With the help of Chase Ink business cards and some business strategy know-how, Jeanne Foley gave the wedding industry a run for its money as she sought out to help consumers with The Groomsman Suit.
Why rent a gorgeous suit when you can buy it at a better price? That was the question Jeanne Foley asked – and answered.
Foley is a fashion industry expert who co-founded The Groomsman Suit, the first e-commerce company to offer stylish, high-quality suits and tuxedos available for purchase – for less than the cost of a rental. Its core line is available in seven stylish colors across 140 jacket and pants sizes.
The idea was sparked by Foley’s personal experience planning her own wedding.
“At the time, there were no options to affordably outfit the groomsmen in tuxedos,” she says. “So my husband and I were forced to go the rental route only to be disappointed by the logistics, poor fit and price.”
Foley shared the idea of selling suits online with her best friend Diana Ganz, an accomplished CEO with a strong understanding of business strategy and growth. The two realized that together they could create a highly successful enterprise.
Foley’s fashion industry experience combined with Ganz’s business background proved to be a perfect fit. Since launching the company out of Foley’s New York City apartment in 2016, The Groomsman Suit is now headquartered in a 2,200-square-foot office space that doubles as a showroom in Chicago. The company generated $2.5 million in sales in 2018 and is projecting $4 million in sales in 2019.
Here’s her story, and how credit cards were sewn into the venture.
What was the beginning of your business like? Any hardships to overcome?
Initially, the greatest obstacle was finding a manufacturer that would allow us to place a small 200-unit order to test our concept. Most factories have over 10,000-unit ordering minimums.
No manufacturer was interested in opening up space in their production schedule for a small order, and I was turned down by every supplier I spoke with. Refusing to give up, I continued to knock on doors until I convinced a small family-owned suiting business to let me place TGS’s first order.
After Diana and I found a manufacturer, next came the challenge of affording inventory. Even though sales were rapidly growing, affording enough inventory for a delivery six months in the future was – and still can be – very challenging.
For the first year, we did not pay ourselves. My husband and I cashed in stocks to put a deposit down on the first inventory order. In addition to pouring all the money from sales back into the company, Diana and I each opened up multiple business credit cards with special interest options to cover operational costs.
Did you use credit cards to help launch?
Yes, without our Chase Ink Business Preferred Credit Card, we would have never been able to place our first inventory order. That credit card allowed us to buy inventory that we sold as soon as it arrived. The sales we made because of the inventory purchased with our Chase Ink card allowed us to fuel the business.
We now have two Chase Ink cards – the Chase Ink Business Preferred card and the Chase Ink Business Unlimited Credit Card. In addition to the interest-free offers, we were drawn to the excellent rewards both cards provide.
In the beginning, we reinvested everything back into the company. Living in New York isn’t cheap, and when we reached the end of our savings, we relied on cash back rewards from our Chase Ink cards to cover expenses.
There are some unique challenges and expenses that go into selling a garment. Storage of our suits and tuxedos is much more complex and costly because the products must be hung at all times and cannot be stored in boxes. As a result, we have to build or buy special equipment to preserve the products in the best possible way.
What about other forms of financing?
Since we’re only three years into the business, we are still working on getting our legs underneath us financially. We worked really hard to be a profitable business in 2017 and 2018. For a company growing at our rate, it’s rare to not be operating at a deficit year-after-year.
Because of inventory expenses and our longer supply chain, cash flow has been our biggest pain. We’re in the midst of a seed funding round to raise $2 million in capital. Prior to this, we started with a small “friends and family” seed fund to raise $400,000 in 2017.
In 2018, we opened a Small Business Administration (SBA) loan to provide us with some additional capital. Thus far, we’ve found that alternating fundraising rounds with debt has been a good model for us. The SBA loan allowed us to grow revenues from $50,000 a month to almost $400,000 – and we were able to push off this current seed round over the next 12 months.
What are the future plans for the business?
In 2019, The Groomsman Suit is expanding the brand into a one-stop shop for engaged couples by adding youth suiting and a groomsmen gift collection. Additionally, we are launching a new brand called Dap Suits, which will serve high school students for prom, graduation and other events.
One of most anticipated milestones this year will be the launch of a women’s collection, giving the bridal party an alternative to wedding and bridesmaids dresses. With weddings becoming less traditional, TGS remains committed to being a champion for our couples’ wedding styles – however unique that may be.
Any financial advice to other entrepreneurs?
Don’t discount your product to grow sales. In the race to the lowest possible price, there are no winners. It compromises your margins and you need to reinvest every dollar you can back into the company early on. Instead, compete with experience and customer service. This will keep customers coming back, and that is a game competitors can’t beat you at.
It’s easy to get caught up in raising money because that is what everyone in the start-up space is doing. These days, it’s almost like your idea is as good as how much money you’ve raised.
Do your best to build a company that can be sustained by its own revenue and find a great banking partner that can help you achieve that. I can’t stress enough how important it is to also get a good business credit card – The Groomsman Suit is where it is today thanks to our Chase Ink cards!
As for borrowing money, the best way to go about it is to constantly explore options and have a resource or two available at any given time. You never want to begin the process of a loan or fundraising round when you are in desperate need. It will limit your options and probably result in less than favorable terms. Capital is always something you should be planning.