Is This Brand The Next Everlane?

Here's what usually happens when you go shopping: You try a bunch of stuff on, maybe interact with a salesperson, and head to the register with your final pieces. Such is the drill at Grana, but with one small twist at the ending: You don't get to bring the merchandise home after paying for it.

This startup clothing company is selling solid tees and button-up shirts in every color of the rainbow at "fitting rooms"— pop-up shops with next to no inventory. After picking the best-fitting sample, customers are prompted to enter their payment information into one of the sales floor computers. The order arrives in a cobalt-blue box by mail — along with a hand-written thank you note, colorful stickers, and illustrated wrapping paper.

If any of this rings a bell, it's probably because at some point you opened a box like that from Everlane, the San Francisco-based startup quickly becoming America's premier e-commerce brand for ethical clothing. However, similar as the two companies may look, they are not exactly cut from the same cloth — and Grana is attempting to capitalize on places where Everlane falls short.One of the most striking elements at Grana is the pricing — almost an unbelievable bargain, given the scattered countries of origin of the high quality materials. Jeans cut with Japanese denim are all under $50; rainbow-colored Chinese silk tops are priced at $39, and crewneck T-shirts made with Peruvian pima cotton are yours for $15 each.

According to CEO and cofounder Luke Grana, the markup of his products is between two to two-and-a-half times — considerably lower than the average retailer's eight to 10. "We're really focused on providing luxury essentials at guilt-free prices," says Grana. "Our customers are not getting something that will break down after a few washes."

That frustrating scenario was precisely what prompted Grana to start his brand: After discovering pima-cotton T-shirts at a local Peruvian market, he was unable to find anything of a comparable quality in his native Australia. The 20 samples he brought home as souvenirs instantly became hot commodities, giving him the idea to bring pima cotton— and other high quality, under-the-radar fabrics around the world— to the masses (this origin story is similar to Cuyana's, another quality-focused e-commerce venture that brings local materials and craftsmanship to global consumers).In 2014, Grana officially set up a warehouse and headquarters in Hong Kong. The location choice stemmed from the city's standing as the largest air cargo hub in the world and its relatively low shipping costs. (The site charges $10 for shipping to the U.S., and the fee is waived if users spend more than $75.) With 20% of its organic sales coming from American customers, Grana is actively looking into expanding stateside by mid-2016. A pop-up shop in San Francisco was unveiled last December, and the entrepreneur is actively seeking retail space in NYC for an April or May launch.We're really focused on providing luxury essentials at guilt-free prices.The inception of Grana seems perfectly in sync with what the people are demanding now. According to Adweek, more and more millennials are opting to purchase their fashion essentials online. Moving toward a more edited wardrobe, this key demographic is shunning traditional retailers in favor of niche brands with a clear mission and narrow range of products, more of which tend to exist in the digital space.This shift in attitude has contributed to the runaway success of Everlane, another direct-to-consumer startup offering wardrobe basics. Many have drawn parallels between the two brands, but Grana was quick to point out that his prices are 20 to 30% lower on average.

While Everlane focuses on neutrals, Grana's products are decidedly more diverse and vibrant in color, like American Apparel without the drama.

What both brands do remarkably well is exerting control over the value chain. Since everything from technology and development to marketing to customer service is done in-house, it becomes feasible to create an identity that customers feel connected to — an important key to success in this day and age.

To differentiate the company from fast-fashion conglomerates, Everlane has been fastidious in promoting its total transparency. The site features an interactive map where users can swipe through photo series and summaries on each factory. While Grana operates a similar world map, more emphasis is put on showcasing the eclectic textures of its materials. Grana confirmed that while a big portion of its garments are manufactured in China, like Everlane's, the company strives to sustain a fraction of its production near the mills where the fabric originates.Business at Grana is very much thriving, considering the brand has only been in existence for a year. Internal statistics cite 25% growth month-to-month, with a 42% repeat-order rate — impressive stats for a label that deliberately refrains from sales promotions and discounts.

"Millennials really understand where we're coming from," says Grana. "They appreciate the fair pricing, knowing that we're working with mills that are dedicated to workmanship and treat their workers fairly."

However, to break into the lucrative but crowded American e-tailer market, Grana will have to tread carefully on the sizing front. The biggest size currently available is extra large, but a significant percentage of the styles max out at large, which will fit a U.S. size 8 to 10. A narrow range of sizes typically does not sit well among the American public, per the major backlash experienced by Lululemon, Abercrombie & Fitch, and Brandy Melville.

"We are still a young brand that's working on increasing our order volumes," Grana explained. "We are working on a broader sizing range as a response to the general feedback we've been getting." Apart from catering to more body types, the company is also looking to expand its offerings to activewear, swimwear, socks and lingerie by mid-year.

"Quality drives every decision we make," says Grana. "We really believe that the efficiencies we get out of selling this way will evolve into some sort of future for retail."

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