Ask: 1 Cr for 2% of equity in Shark Tank Season 3, but how much Lea Clothing Co. was able to grab?
Lea Clothing Co, a mid-premium D2C apparel brand, run by the mom-daughter duo, had most of the sharks interested in their business.
Why?
Obviously the numbers.
Fiscal Year 2022-23 the brand had a net sales of ₹3 Crore , 2021-22 the number was ₹1.5 Cr, that's a massive 2x growth.
But now let's talk, 2024. According to the founders, in the month of Feb '24, they generated ₹40 lakhs from their own website, and the other marketplace brought in an additional ₹20 lakhs.
Why are we interested now?
Historically, the apparel industry is often considered as an overcrowded one, obviously in India where the total population is 144.17 Cr.
So how could a brand like Lea Clothing Co, launched in Jan '21, step into the market, with 80% gross margin, and still have a 32% retention rate?
Let's get into numbers,
The apparel industry in India is about to reach an impressive US$105.50 billion in 2024. This market is anticipated to grow annually by 3.81% from 2024 to 2028.
Among the various segments that's there, Women's Apparel stands out with the largest market share. The volume is around US$51.05 billion in 2024.
The reason? Increasing purchasing power of Indian women.
By 2028, the volume of the apparel market in India is expected to soar to 40.1 billion pieces. On average, each person in India is projected to purchase 24.2 pieces of apparel in 2024. Surprising right?
Here's where Lea Clothing Co made a space for themselves in such a crowded market.
Lea Clothing Co Founder’s Story
Lea Clothing Co. is more than just an apparel brand. It instead champions body positivity and inclusivity.
As Lavanya Aneja and Kriti Aneja mentioned on the tank, the idea of the brand came from a profound observation. Lavanya, the brain behind Lea during her education days at UCLA, found many boutiques in the city (doing really well).
She did her studies (the groundwork) and explored that European women often celebrate and highlight their curves. However, when it comes to India, Indian women have those curves naturally, but they tend to shy away from their body shapes.
This cultural nuance sparked the inspiration behind Lea Clothing Co. The brand is dedicated to making women feel confident and beautiful in their own skin.
Coming back to Lavanya’s research,
After coming back to India - she did a simple Google Search - Corset shops in India, and there were none.
Here's where she noticed the gap in the market. Determined to fill this void, Lea and Kriti launched a brand that celebrates women of all shapes and sizes.
A quick backstory - Lavanya's father is a garment exporter. She is based out of Delhi, India. She did her schooling at Delhi Public School, R.K. Puram in Arts. Later, she pursued a Double Bachelor of Arts in Economics and philosophy. Since she had a creative stinct from her childhood days itself, she further decided to choose arts.
How Did the Brand Achieve Success?
So there are many factors. Talking about numbers the brand broke even within four months of launch. That's why the tag “successful”.
An Amazing Sizing Chart
The D2C brand entered into the market with a commitment - inclusivity and body positivity. And this somehow resonated deeply with its target audience.
Later, Lea's team developed a proprietary sizing chart. This chart was specifically designed for Indian bodies.
The size ranges available are from XS to 5XL. This inclusive approach has set the brand apart in an industry. Because when looking into any brand selling corsets, they used to cater to a limited range of body types.
An Amazing Product Range
Lea stepped into the market with a very unique product range. The brand offers a variety of clothing options. Corsets are something Lea is popular for. But other than this, the duo even launched - ethnic wear under the label Saanjh by Lea, and swimwear/lingerie under the label L’ange by Lea.
How did Saanjh happen?
Initially, Lea came into the market with a focus on corsets. But the founder saw that women (her customers) are purchasing them to wear with traditional Indian attire like sarees and lehengas.
Lavanya tapped into this opportunity, and came up with Saanjh.
And talking about label L’ange - this happened because the customers used to ask what inner wear they can wear with the corsets, or any dress bought from Lea for that matter.
What Marketing Strategies is Lea Clothing Co Using?
Lea, initially one can say is a digital first D2C brand. They started with Instagram, and within few days of launch they went all viral. (Ofcourse the products).
The brand aimed at maximizing reach and engagement with their target audience. So, they tried - performance marketing to drive sales and increase brand awareness.
To give you all an idea - Performance marketing is all about planning data-driven advertising strategies. Brands over here majorly focus on measurable results. For example clicks, leads, and sales.
Lea also made the most out of the influencer marketing. The brand collaborated with popular influencers like Kusha Kapila, Rida Tharana, Prableen Kaur, @the.rebel.kid to raise brand awareness.
Even in an interview with ACLR8, Lavanya mentioned that her collaboration with Kusha brought in much orders and gave the brand a good popularity boost.
What are the Finances of the Brand?
Lea Clothing Co.'s financial performance has been nothing short of remarkable. The brand's ability to break even within just four months of its initial investment of Rs 25 lakh - shows how strong the business model is, ever since its launch.
Lea from then on has continued to be profitable. They now have impressive sales figures. (As mentioned in the start of the blog).
To talk more numbers, Lea Clothing Co.'s average selling price is Rs 6,900. But the garments under the Saanjh label cost between Rs 12,000 and Rs 13,000.
What Future Planning Has the Brand Done?
When sharks asked what Lea Clothing Co. has planned for with the fundings they would get - Lavanya, the founder had a proper plan in her mind.
She shared that, with the fundings she would probably:
Invest more in performance marketing
Plan inventories better, and obviously do more pieces
Do retail expansion through multi-brand outlets.
With an initial investment of ₹8.5 lakh, Lavanya even highlighted how they would be making most out of the technology, with its Lea virtual trial room.
It’s a significant innovation that the brand is working on. This technology allows customers to try on clothes virtually before making a purchase. The overall online shopping experience changes. And what happens next? Since the customer has already tried virtually, return rate is less.
The virtual room uses augmented reality (AR) technology to create a realistic and interactive fitting experience. Customers can input their measurements and see how different outfits look on them in real-time. Now, even we are excited to see how this will shape up!
The Journey Ahead
Lea Clothing Co. is working in a very niche market, targeting a very niche audience. Even though the brand's financial growth has been impressive so far, expansion would still be an issue. But since four sharks stepped into the deal - Anupam Mittal, Azhar Iqubal, Namita Thapar, and Vineeta Singh - let's see how they're able to solve the expansion issues.
Lea Clothing Co was able to grab a deal of ₹ 1 Crore for 4% Equity + 2% royalty until ₹ 1.5 Crores are recouped. Until now, Lea has a great follower base of 178k on Instagram. The growth is good, with Lea virtual room launching soon, let's see how Lea is able to expand across boundaries!