An online store specialising in “high-quality fashion at disruptive prices” is expanding into three new Asian markets this year from its Hong Kong base.
Grana is the creation of Australian Luke Grana, who was inspired by the high quality of tshirts he came across during a trip to Peru.
“I came across the Peruvian Pima cotton, which is extra long staple cotton that is very soft and durable,” he told the Hong Kong Trade Development Council magazine in an interview.
“It’s a higher grade cotton than others in the market. I gave these t-shirts to my friends when I returned home and they were amazed by the quality of the t-shirts. I thought that was a really great business proposition to specialise in top-notch fabrics.”
From there he started searching for best quality sources for other fabrics.
“There are many fashion brands that source products from mass distributors in China, but I wanted to do something different.
“We choose our fabrics based on their stories. Our silk comes from Huzhou, China. Huzhou is the start of the Silk Road and has been producing the world’s finest silk for a long time. For our denim, we went to Japan, where they have a very strong denim culture. We are also doing linen from Ireland, a place where they originally started making it.”
The site was developed with a unique business model in mind – in Grana’s own words “high-quality fashion at disruptive prices”.
“Our business model is a little bit different; we deal directly with fabric mills instead of going through distributors or agents. Also, by operating online, we don’t have to pay rent. So when fashion retailers put in mark-ups along the way, our pricing is really simple: each of our shirts cost US$6, we retail that for US$12; jeans are US$20, we sell that for US$40. It’s a really honest and transparent pricing model and I think that’s what our, Generation Y customers prefer.”
From its Hong Kong base, Grana is expanding into new markets. This year the brand will launch online in China, Europe, Japan, South Korea and Dubai. It will also expand its range into new apparel categories: Mongolian cashmere sweaters, Irish linen shirts, French poplin shirts and US twill chinos.
Grana started small but the business has grown rapidly.
“I started out by setting up a small warehouse in Kennedy Town and ordered our first batch of 2000 pieces of Peruvian Pima t-shirts. Within the first three weeks of sales, we sold out all our stock. We shipped t-shirts to more than eight countries and the shipping rates were good.
“The quality of products we received was really high, proving the business model to our investors, including Hong Kong-based fashion retailer Bluebell Group. With the capital raised, we built a strong team and re-launched the business with a new website last October. We have really strong sales, recording up to 700 per cent increase each month, which is really exciting.
“I arrived in Hong Kong in October 2013 and by June 2014 I had raised US$1million in capital. I think that’s just testament to the strength of Hong Kong in terms of building and funding a new business.”
Pop-up stores have helped build brand awareness in Australia and Hong Kong.
“They really attract attention and bring in new customers. All of our new orders come from customers from our pop-up stores. The repeat-order rate is high as well. Last year, we did one in Australia, and we made more than A$60,000 in sales.
“This year, we are hosting a one-month store in Hong Kong, and we will also be doing one later in Singapore. In the second half of the year, we plan to start one in San Francisco. I think it’s a really great way to introduce the brand.”
Grana says he chose Hong Kong for a business base over Singapore because of the tax free port status.
“That’s brilliant for us because we ship a lot of products in and out of the warehouse. When compared to Australia and any other parts of the world, Hong Kong is very exciting. It’s a dynamic city and things can happen very quickly. There’s a lot of energy in Hong Kong, people get excited by new ideas, there’s a lot of capital to back ideas up.