After thriving on limitation since 2008, Proper Cloth spreads its wings with a new $1M Soho flagship.

Tonight in Soho, drinks will be served, hip-hop will beat softly from the recessed speakers overhead, and tailoring will take center stage. This is the Proper Cloth way. Over the last eight years, the enterprise has worked hard to shed the idea of made-to-measure tailoring and suiting as dowdy, stuffy, and old-world. CEO Seph Skerritt explains it this way: “One of the things that’s unique about our custom shirt experience is that you come in and it’s not like older guys with ascots,” he says. “It’s a younger, hipper fit expert that’s there to help you. There’s hip-hop music playing quietly. It’s a different feel, and you can connect to the brand more than you can purely the online store.”

Modern luxury brands have upturned the rusty conventions of the luxury industry since the first rowdy bunch crashed the party nearly a decade ago. The one thing that hasn’t changed over the years is the desire to open up a New York flagship. What has changed in that conversation, however, is the thinking on the ideal New York location in which to open that flagship. Traditional, established brands still hold Madison Avenue as their holy grail. But today’s modern luxury founders dream of sleek, contemporary, downtown spaces right in the heart of Soho.

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As of today, Mr. Skerritt, 37, will be one of the fortunate early few to not only plant roots there, but do so in sizable fashion. Six floors up at 495 Broadway, just across the street from Bloomingdale’s, Proper Cloth will officially unveil its new showroom and headquarters, a place that Mr. Skerritt and his growing team of 22 intend to call home for at least the next five years.

As one of the older modern luxury menswear brands still in operation, this expansion has been a long time coming. Mr. Skerritt started the company in the fall of 2008 as both a basic concept and a one-man operation. The first spark came in the summer of 2007 while getting his MBA at MIT business school. He spent that summer doing internships in India and China, and during his time in China he got his first taste of accessibly-priced bespoke tailoring. Citing a potential need for this type of service stateside, he began weighing the prospects of a modern tailoring operation that stylistically appealed to men like him. He could then make the service both convenient for shoppers — and scalable — by handling everything online.

“I wasn’t particularly into fashion, or particularly into dressing at the time,” Mr. Skerritt recalls. “But when I got that first custom shirt and suit, I just remember thinking ‘What a great experience’ versus going to the mall or going to wherever and trying on six different things and none of them fit right. You just kind of picked whatever was the least bad. It was a compromise.” In this new experience abroad, though, there were no compromises. “You literally just told the guy what you want and you got it,” he says. It opened his eyes to the world of affordable tailoring. Still, given that these tailors were all stationed in China, it was an impractical service to rely on.

Back in the States, he searched for a comparable experience. The pickings, needless to say, were slim. The US men’s tailoring market was stagnant, and traditional custom suiting firms suffered from two glaring problems. First, they were extremely expensive — prohibitively so for the under-35 young professional. Second, they were incompatible with the tastes of that customer. For many shoppers like Mr. Skerritt, a stop-gap solution would be to rely on visiting tailors from Hong Kong. Arriving every couple of months, they would serve business school students by appointment. The service, however, left much to be desired. “That whole experience just seemed weird to me,” says Mr. Skerritt. “And it wasn’t available when you needed it. Plus you’re not really a fashion expert, so you don’t know if you’ll be getting something that looks stupid, nor did you really trust their brands.”

Simply put, there was no guidance. And although there were custom menswear e-commerce websites at the time, they were low-touch: poor quality and poor branding. “They were terrible,” he says.

“I thought it would be such a cool experience if you could get a custom fit shirt. I said, ‘Why don’t we make it more accessible by doing it online? And let’s just do it online really, really well. Let’s also make a brand that doesn’t have the same pretentiousness that an Ascot Chang would, but is still aspirational and cool.’”

True to business school protocol, Proper Cloth 1.0 was bare bones. There were limited fabric and style options. The website featured a basic user interface and was straight-to-the-point. The turnaround too, from idea to full operation, was rapid. In January 2008, while still at MIT, he started fleshing out the initial concept; by July graduation, he was full time. From there, it took about three and a half months to get the first version of the website up and running, and the first product finalized for the full launch that October.

In the early stages, Proper Cloth only sold custom shirts, and the only option was to design your shirt from scratch. Today, Proper Cloth offers a fully-developed product line, as well as seasonal collections. The collections are limited, but help to make the purchase decision more turn-key for the man on the go. “Instead of having to design their own shirt, they can kind of go to a gallery, and shop as if they were on Mr. Porter,” says Mr. Skerritt. Previously, guys would have to measure themselves. Well-intentioned though this was, it was also challenging, and ripe for error. The brand now has “smart sizes”. A customer answers a few questions about their body, style preferences, and lifestyles, which allows the company to streamline the sizing process.

Mr. Skerritt hasn’t been convinced to take on venture capital, and has run things in a sensible manner from the beginning. Having just reached its eighth year of operation this past October, Proper Cloth has still yet to take on any institutional funding. After securing an initial $150,000 investment from friends and family, Mr. Skerritt has optimized for profitability from day one, feeding the firm’s growth through revenues, rather than relying on VC support. The operation has been profitable for years, and for 2016, Proper Cloth will bring in well over $10 million in sales on the year.

Scaling up in Soho.

“We’re no Warby Parker,” says Mr. Skerritt. “But we definitely have reached a certain scale where we have tens of thousands of customers and really solid business. We’re up to 22 people today. We’ve grown the business quite a bit.”

The new Soho space is a continuation of that growth. And its existence speaks volumes. In a direct-to-consumer environment where such businesses are supposedly freed from the constraints of space, for Proper Cloth — a high-touch operation where in-person service is built into the business model — space is still very much a constraint. Their old space just a block away, totalled 3,000 square feet. Of that, 1,200 square feet made up the showroom space (the rest housed the back office team). The small showroom size which limited interactions with shoppers. Visitation to Proper Cloth is still primarily by appointment, though they accept walk-ins, and the old space capped appointments to around 60 per day at capacity. As a business that strongly emphasizes its real life service, this was a big deal — even at a revenue split between online sales and retail sales at 90 percent online.

As Mr. Skerritt started growing the team to handle online customer service, design, marketing, and operations, it was very clear that he needed more space to continue recruitment. At 12,000 square feet, and with over $1 million invested in it, the new location quadruples Proper Cloth’s capacity. While most of the location will be used for back office space, the new showroom square footage more than doubles to 2,500 square feet. That eases the bottleneck quite a bit, and now allows the company to add more appointments beyond just 60 a day.

Opening up a brick-and-mortar location is becoming de rigeur for certain modern luxury brands. Everlane, M.Gemi, and J.Hilburn, for instance, are among a handful of high-valuation companies that have cut ribbons on new locations since the summer alone.

But Warby Parker aside — whose rate of $3,000 sales per square foot rate is at Tiffany and Apple levels — showrooms are not huge drivers of direct sales. Yes, 90 percent of Proper Cloth’s sales are online. But having a dedicated showroom space makes a brand feel more legitimate and established. E-commerce will continue to play a huge part, but smart founders understand and appreciate that they’re still selling to human beings. The brick-and-mortar format is changing, that much is certain; but the desire for real life spaces to visit brands in person is not going away anytime soon. For niche specialists like Proper Cloth, these intelligent retail plays are becoming increasingly more important as they look differentiate themselves in a highly competitive online environment.

“Being able to provide that in-store experience so that people can get their first fittings done, or answer questions, or interact with the brand and to kick the tires, so to speak — that is super valuable,” Mr. Skerritt says. Having an outstanding online experience is vital, and selling online allows shoppers to order from home or from the office. But showrooms and physical locations that are well-conceived (offer more than just transactions) are still very important. That’s true even if the vast majority of a brand’s sales are happening online. “Even if you’re not doing a ton of your business directly in these showrooms,” says Mr. Skerritt, “they’re helping you onboard new customers and they’re helping people get a sense of what you are. That’s super valuable.”