The hobbyhorse of the Munich fashion brand Sanvt is the “perfect T-shirt”, a product whose name promises as much as the brand set out to do with its own size model and the claim to democratize fair fashion when it was founded in 2018. Four years later, the company broke the 1 million euro mark for the first time, not least thanks to the T-shirt with the promising name, which has now been sold more than 30,000 times and is available in 21 sizes.
Sanvt founder Benjamin Heyd explains what the young label has planned for the future and why wholesale will probably play less of a role. He also talks about the growing pains of a young company, supply chain challenges and the importance of sustainability for the brand and its customers.
Let’s start at the beginning and with their recipe for success: the ‘perfect T-shirt’ and its 21 sizes
Although it is a lot of work – I still regret it sometimes – this was part of our success. It’s an easy-to-understand unique selling point. First-time customers, especially men, often have a problem: M is too short and L is too wide. S is too small, L is too big. That’s why we offer all of our sizes in short, normal and long versions. For a T-shirt, this is about four cm in body length compared to the standard length. We also offer the “short” option, which makes a total difference of eight cm compared to the standard size, which is significant.
Quite a lot of choice…
Yes, this means that customers who visit our site don’t have to choose between six sizes, but between 21. This can be overwhelming at first, which is why we have developed a size finder. A size is suggested to the customer based on their height, weight and shoe size. This is a self-learning module where we analyze return rates and constantly improve the model.
Does the lower return rate also save CO2 emissions?
It is difficult to say how much this algorithm has saved net CO2. However, we know that new customers who use the size finder have a 20 percent lower return rate than usual.
So far we’ve talked more about the T-shirt. Can the size model also be transferred to other product categories?
For outerwear this is relatively easy as we offer the same model, especially for T-shirts and sweatshirts, in different lengths. With trousers this is a bit more complex. We already offer long and short versions, but that’s nothing special when it comes to pants. But we’re also currently experimenting with different fits tailored to different body shapes. However, we keep the same styling. Nevertheless, from an e-commerce perspective, we are still undecided about the number of options as this could potentially increase the return rate.
Inventory levels are a big problem for many companies even without 21 different sizes, how do you overcome this hurdle?
We do not offer seasonal products, but rather a constant product line. Our orders are made as needed when we see our inventory dwindling. We have a four-month forecast because the lead time is between ten and 16 weeks. This represents a business challenge to finance inventory.
That must have been a big challenge, especially at first…
The early days were tough, I admit that openly. As a small start-up, we had some problems with manufacturers due to low volumes. We also have 21 different sizes, which not all manufacturers are happy about.
You just mentioned low volumes. How many products do you currently order per production batch?
The production round varies depending on the product, but for our ‘perfect T-shirt’ we now order between 5,000 and 10,000 pieces per round.
Its initial phase also coincided with the pandemic, a time that many established companies did not survive without problems…
We have had significant supply chain difficulties, partly due to our own fault. At the beginning we didn’t have enough data. Normally you should reorder when the warehouse is full, not when it is empty. This was difficult at the beginning and also scary when there was a lack of capital. However, we have now developed a robust forecast and know how much we will sell next year.
To what extent were the difficulties self-inflicted?
We grew extremely in 2020. Previously we had a turnover of a few hundred thousand euros [Anm. d. Red.: 55.000 Euro in 2019] and jumped to a million. That wasn’t necessarily included in our original forecast. We have also experienced high demand as our products have been in demand during the pandemic – sweatshirts, t-shirts, sweatpants and a pure direct-to-consumer online business. We were among those who benefited from the pandemic, so we are doubly happy that our growth continues to develop positively.
Our biggest challenges then came in relation to production. We had planned too little and ordered too little while demand was soaring. We could have grown significantly faster during the pandemic if there had been no bottlenecks.
Keyword forecast – in 2022 their sales were 1.3 million euros. What are you expecting this year?
For this year we expect growth of almost 50 percent compared to last year. Next year we are also aiming for growth of between 30 and 50 percent, also thanks to wholesale models that we are considering and our first own retail store.
Are there already concrete plans for your first store?
Our first retail location will be in Munich. Here we have a dense customer network compared to the number of residents. We are also a Munich company. The store should not only be a sales channel, but also a marketing tool. The idea is to build a community. It should be more than just selling clothes, it should be a meeting place for our customers. We are therefore looking for locations away from the classic shopping streets in Munich, as the rental prices there are often unaffordable. Instead, we rely on creative concepts.
What’s next for Sanvt product-wise?
We are currently working on denim products, but there are no firm dates yet. We don’t make hasty decisions and continue to produce prototypes until we are 100 percent sure. In the medium term we are also planning a women’s collection. Although we currently sell our products as unisex, they are aimed at men in terms of sizes. There are also plans to expand into other segments such as children’s clothing and shoes.
You just said that Sanvt is unisex, but sized for men. To what extent is this reflected in your customer base?
Around 85 percent of our customers are men or women who buy for men. We can determine this based on the purchasing data. Only about 12 to 15 percent are women who shop for women. There is certainly potential to increase this share as our products are fundamentally unisex. However, currently our marketing focus is heavily on men.
Speaking of plans, you just mentioned wholesale models. How does this fit into your concept with such a range of sizes?
Classic wholesale is not an option for us. We remain true to our principle of offering the best quality at the best price. Our model simply does not allow for the wholesale margins that retailers would require. We are considering a commission model if the partners are suitable. We are conducting initial discussions in Germany and also have further plans for partnerships in the UK and the Far East. This could be an internationalization strategy for us, as classic direct-to-consumer online sales have their challenges.
What challenges do you associate with wholesale?
If our T-shirt were sold in a traditional wholesaler, it would cost between 70 and 80 euros instead of 38 euros. That is not an option for us. Our aim is to make fair fashion accessible to everyone. This would go against our company philosophy as we would no longer be able to offer the best product at the best price.
The UK and Far East are on the expansion plan. In which countries is Sanvt currently active?
Currently around 85 percent of our sales come from the DACH region. We are therefore now increasing our focus on the Nordic countries, Benelux, the United Kingdom, the USA and France. The construction of our French website is currently underway.
Let’s come back to your goal “to make fair fashion accessible to everyone”. Do you think you could offer the perfect t-shirt even cheaper in the future?
It is not possible to offer a significantly cheaper product than we do. Therefore our price is appropriate for a high quality, sustainably produced product. I understand that some people are still hesitant to spend 40 euros on a t-shirt, but society needs to change its relationship with clothing. Customers should appreciate their clothes and wear them for longer instead of constantly chasing the latest trends. If it’s possible to buy a new iPhone every two years, then you should also consider investing a little more in a high-quality t-shirt. So it’s about a change of perspective. The mainstream has been distorted by brands such as Shein and Primark, where prices are often unreasonably low.
However, it is also said that end consumers are currently price sensitive. Do you feel this too?
We have done educational work and explained why our products are priced the way they are. To date we have not received any negative feedback regarding our prices. I understand that there are social classes for whom it is more difficult to spend 40 euros on a t-shirt. But most people who really invest in clothing have to learn to buy less but with better quality. You can’t make a “sustainable” organic cotton T-shirt cheaply in Bangladesh with a dubious certification and sell it for 5.90 euros. This isn’t really a sustainable T-shirt, even if it says “Green Cotton” on it.
What makes your t-shirt more sustainable than the “sustainable green cotton t-shirt”?
Our most important sustainability criterion is longevity. As far as our customers are concerned, the sustainability aspect was and is not the main criterion for purchasing, but rather the high-quality and long-lasting products at a fair price. The sustainability component plays a supporting role for us. Manufacturing in Portugal follows closely behind. If we look at sustainability in a broader context, it becomes clear that this is an important aspect. However, hardly anyone buys a sweatshirt from us just because it is made from organic cotton.
And yet you have different sustainability certifications, correct?
Sustainability aspects and certifications are particularly relevant for us if we cannot trace the supply chain to the origin of cotton production. The GOTS certification at least allows us to trace the origin of the fibers relatively transparently. In general, we still view certifications critically, especially from the perspective of consumers. Greenwashing is often carried out in the areas of high street fashion and fast fashion.