It all started about seven years ago with a football game in midtown Mumbai. “Akshay (Narvekar) and I got talking after the game and that was my introduction to Bombay Shirt Company. It sounded like an interesting venture. Made-to-order shirts, low-inventory model…” recalls Lightbox founder and managing director Sandeep Murthy.

Back then Lightbox was looking for differentiated business models in fashion where the unit economics made sense. The dominant fast fashion model, driven by 52 micro-seasons, was weighed down by swelling unsold inventory. At the same time, consumer purchase decisions were gravitating towards more personalisation and responsible consumption. Bombay Shirt Company, for Murthy, ticked all the boxes but one – it was primarily a brick-and-mortar business and for Lightbox, technology had to be an integral part of the mix. 

“Akshay and I stayed in touch and a couple of years after that first conversation, we invested in Bombay Shirt Company,” says Murthy. In that time, the Mumbai-based company had graduated to an omnichannel play and was in the early stages of building a tech stack to power its backend processes. 

Lightbox got on board as the first institutional investor with a $8 million investment in December 2019. “We believed there was a real opportunity to build a differentiated, high-margin and sustainable fashion business at scale,” says Murthy.

Smart capital finds good businesses

That conviction has been borne out by Bombay Shirt Company’s steady growth trajectory over the past five years, including through the debilitating COVID-19 pandemic. Rather than be beaten down by the challenges of the pandemic, the company has diversified beyond shirts into bottomwear, t-shirts and womens wear (via the acquisition of Pause). Today, it operates 20 offline stores across 10 cities, derives 30% of revenues from online sales, and closed calendar year 2023 with a 12% increase in gross margins and a 33% reduction in cash burn.

Riding on those hard-fought metrics, Bombay Shirt Company raised a Rs 54 crore ($6.5 million) Series B equity funding round last week led by Singularity. Mithun Sacheti, founder of CaratLane (acquired by Titan last year) and now general partner at Singularity, participated in the round. “Working with a seasoned operator like Mithun (Sacheti) is a great honour for us. He has built a once-in-a-generation D2C brand in CaratLane and we hope to apply those best practices here at BSC. We are excited to have him on in the next phase of our journey,” Narvekar said on the latest funding round.

The capital infusion, amidst a challenging fundraising environment, is an important validation of Bombay Shirt Company’s differentiated business model and Lightbox’s original investment thesis. 

“Today, Bombay Shirt Company operates at the intersection of the biggest emerging trends in apparel. This capital infusion comes at an opportune time when the company is operating at healthy gross margins and is poised for accelerated growth,” says Murthy.

Playbook for the long haul

With the Series B capital infusion, Narvekar and his team are well-positioned to take the omnichannel, made-to-order apparel platform to the next level. The fresh capital, it said in a statement, will be deployed in accelerating the expansion of the company-owned stores and building out the franchisee model. In addition, it will introduce new categories, strengthen the supply chain and expand its distribution channels, including experimenting with new offline retail formats. 

Having watched this unique company evolve and grow from close quarters here at Lightbox, we have little doubt that the company will only get stronger. India’s largely unorganised $70 billion apparel market affords it more than ample headroom to grow into a player of significant scale in the still nascent personalised apparel space.

“What really works for Bombay Shirt Company is how well it has developed the playbook for its stores. The company is very selective about the location of the stores and that in turn drives the rent-to-revenue ratio. On an average, its revenue per square feet is 2X that of the industry average in the apparel industry. Each store is able to break even within 3-6 months, which is half of the industry average,” says Lightbox’s Atharva Purandare, who has been working alongside the company on a day-to-day basis for the past several years.

In keeping with Lightbox’s deep engagement model, Purandare’s work with the apparel maker has in the past has taken him deep into the trenches. Back in September 2021, when the pandemic was in retreat and the stores were starting to open up, the company found its systems and processes overwhelmed by the rush of pent-up demand. Lightbox parachuted Purandare into the Bombay Shirt Company operations for six months to support the team. “I spent a lot of time at their factory (in Vasai),” Purandare recalls.

We’re extremely pleased to see yet another company from our hand-picked, concentrated portfolio grow up and go on to bigger things. Of course, we’ll remain as deeply engaged with the company as we have in the past. For now, here’s wishing Bombay Shirt Company the very best as it kicks off into the next phase of its journey.