Interviews, STARTUPS

Clothing production in Russia: everything is unavailable

In the world of business people, an attire is essential, and the first item a dialog partner notices, is a shirt. A shirt became part of a man’s wardrobe back in the times of Renaissance – and there is no sign it may retire. Mikhail Morozov, the founder of the He Has 34 brand, has challenged the renowned artisans in shirtmaking, the Italians, and has launched premium segment men’s shirts in Russia’s Novocheboksarsk. He told Invest Foresight how many shirts a Russian businessman usually wears, why Russian tailoresses would not use Italian templets, and how much opening a shirt shop in Moscow costs.

– Is an outfit important for a business environment?

– It is of a prime importance. Clothing explicitly shows who is in front of you, what is this person’s business and income and why he has come to see you. Clothing has most essential functions for communications. One can not come to a bank for negotiations wearing a T-shirt.

– Unless that is Steve Jobs.

– Steve Jobs, by the way, also wore shirts and suites. True, on TV we used to see him wearing his famous black rollneck. That was not an accidental choice of clothing, but a deliberate strategy, as the founder of one of the largest global corporations wanted to be seen as an ordinary person to make it simpler to engage in a dialogue.

– So, is business style dress becoming less formal?

– The classic suites manufacturers now face a substantial drop in demand as that type of dress is gradually becoming very much linked to special events such as graduations, weddings or funerals… These days in Europe (Russia usually lags behind a bit), the dominant style is casual, with some respective versions for business attire such as smart business and smart casual. Nowadays, when going to an office, even a most conservative banking community would accept a deconstructed jacket or a jacket with decorative fixtures, but a shirt is a must element.

– Is it easy to distinguish a high quality shirt?

– It is not a problem for a professional. The main point is the way a shirt reflects the light. In premium quality shirts fabric is infiltrated with some special compositions which make light reflection most peculiar. Another feature is the collar, and the tinier are the stitches, the higher are the quality and the price of a shirt. Finally, garment accessories are essential. Good quality shirts always have pearl buttons.

Pearl is hard to find in Russia.

– I’ll say more than that. To produce clothing in Russia, one will fail to find anything at all apart from sewers. Be that equipment, thread, fabric, accessories – they are all unavailable. We buy machinery in Italy, Germany and Japan, fabric in Austria, Switzerland, Italy and Portugal. Dark colored fabric is made of Egyptian cotton, while light and white fabric of the American cotton.

– Why did you decide to start this complicated business?

– Among Russian companies, there are manufacturers of the averagely priced shirts while there are no domestic players in the premium segment. After the national currency exchange rate hiked in 2014, the price of imported goods doubled. That to a great extent was the motive for us to come up with a domestic product for that market niche. So we upgraded our factory in Novocheboksarsk which is a shirtmaker since 1992.

– Will your shirts’ Russian origin be a benefit for promotion?

– It’s hard to be definite about that. No doubt, there are certain prejudices. In this regard, Italian manufacturers are surely the lawmakers since they develop the concepts and designs. We have invited an Italian designer and he helped us in coming up with a shirt design intended specifically for the Russian market. Russian men have a different outline. While Italians have a V-type outline with broader shoulders and smaller waist, Russians have rather comparable parameters, so we attempted to make them visually distinct.

– Generally, do Russian men fancy nice clothing?

– They can be divided in two groups. One consists of those who have to dress nicely, while the other is made of the people who like fashionable cloths. The second group has been gradually expanding. Russian men have started paying more attention to themselves. We have established, in various focus groups, that there are lots of men now who may have up to 20 shirts, including 10 white ones.

– Do you mean they would have 10 identical shirts?

– Certainly not. They would all be somewhat different in design or cut, have different collars and cuffs (intended for buttons or cufflinks). A man’s altitude towards his shirts is similar to a woman’s attitude towards her lingerie. A man would never bother about exhibiting a brandname, but his shirt must be truly tailored to his needs, so that he would feel and enjoy every aspect of his shirt, which makes him feel comfortable all day long. A shirt can influence a psychological condition and a mood. A shirt is more sophisticated in its design and manufacture than a jacket since it has no lining.

We can not make a single mistake in a single seam as it can not be concealed with a back cloth. True connoisseurs would wear a good shirt even at home. There are men who would not put a T-shirt on even on weekends.

– Are there many men like that in Russia?

– Just a tiny percentage. Appreciating a shirt requires a certain level of psychology, mentality and career success. According to the statistics available, about 5% of the male population in Russia make RUR 100K ($1.7) or more a month and hence can afford to pay RUR 10K for a shirt. Most of such people live in Moscow, and they are our target audience.

– Opening an offline shop is expensive. How long will it take you to recover your investment?

– To launch our first point of sale at Neglinnaya Plaza in Moscow downtown, we had to invest about RUR 3 mio ($58K). The subsequent shops will be less cost intensive. If we have four shops, we’ll be able to get our investment repaid in about 18 months. Our production facilities can manufacture 300 shirts a day. So we have some ambitious plans

– What was the overall investment in the project?

– The investment is still ongoing. The initial investment was at about RUR 2 mio. But we already had all facilities and human resources available by then.

– Are innovations in shirtmaking possible?

– We attentively watch all innovations. If there are new fabrics with new features, we will no doubt try those. It’s more different about automation and mass production, since the premium quality goods are handmade, that is why they are valued. Any large scale automation of the production process is therefore impossible. A classic shirt is made of 34 elements. They all are cut and sewed by a human. So our sewers will never be unemployed due to any sort of robotization.

By Anna Oreshkina

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