Archibald London Is Disrupting the Luxury Goods Market One $6000 Scarf at a Time

Archibald London founder Rohan Dhir has a simple dream: to sell luxury products direct to consumers without the sky-high mark-ups and it all starts with a $2,850 scarf. 

You have a scarf on your website that you’re selling for $2,850! How is that even possible?
You’re talking about the vicuña stole. Vicuña is the rarest fiber in the world. Essentially, the vicuña grows a new coat about once every five years or so. The entire industry of sourcing vicuña is essentially controlled by two brands, with Loro Piana owning the largest share — having a contract with the government of Peru. It is worth more than its weight in gold, quite literally. Because there is such a restricted supply and it costs so much to procure, once you put it through the traditional luxury retail model — which ends up being about a 10x markup — the cost of a vicuña scarf can be between $6000 and $8000 USD. Our vicuña scarf is less than $3000 and is also a thicker weave than Loro Piana’s, so it’s actually got more vicuña in it.

So what is your markup?
We source directly and put our products though our standard pricing model, which typically results in an 80% markup. And because we are direct-to-consumer, we are able to avoid the additional 4x mark up that usually comes with wholesale.

A lot of the products on your website is very reasonably priced — under $300 — so why make a vicuña scarf at all when it is so much more expensive than everything else?
The entire idea behind what we do is to sell the very best products at the most efficient price possible. We’re not trying to take something that is premium and make it cheaper. We want to create a truly high-level, high-luxury good and offer it at the best possible price, effectively creating the best value proposition out there.

Our shoes, for example, are hand-welted. Hand-welted shoes from Gucci are about $2,500 and they’re not even totally hand-welted. Ours are and we are selling them for $498.

The reason we brought vicuña in is because the raw material is so expensive. There’s no cheap way to do it. And people who know vicuña know that they are getting a great deal because they know how rare it is and how much Loro Piana charges for it. It’s a great way to get people to understand what it is that we’re doing and it’s actually one of our best selling products.

Seriously!?
Yeah! Here’s the thing, most people don’t even know what vicuña is, so if you are searching for it online, it’s because you’re already familiar with it. Then you see that there are only a couple of options available: one is $6000 and the other is $2,850. We offer free returns, so you figure, why not give it a shot. Then it arrives and you realize it is the same quality, but at a much better price. After that, most people who buy our vicuña scarf go on to become our best customers, shopping their way through the entire collection because they now understand what we are doing and what incredible value they are getting from our products.

What were you doing before you founded Archibald London?
I was a commodities trader for a bit and before that I was in college in New York.

So how did you go from commodities trading to owning your own D-to-C fashion company?
In my last year of university at Columbia, the guys from Warby Parker came in and did a presentation and I said to my friend, “You know, this is a good idea. We should copy these guys and do it in Europe.” But once we really dove into it, we saw that the quality of the product was actually extremely sub-par — seriously, Warby Parker makes some of the worst-quality products out there — so, we scrapped that idea. But then I thought, what if we figured out what it costs to make the best product in the world and then applied this sort of pricing model to those.

The company actually launched as Archibald Optics about five years ago. The best eyewear is made in Japan for about the same price (just in terms of labor and materials) as what Warby Parker is charging retail. So we started working with Japanese master craftsmen, using the best quality materials and selling glasses for about $225.

On our website, if you go to any product page, you can scroll down and you’ll see a receipt that shows exactly how the product is priced and billed and compares this to other products, including other equivalent high-quality luxury products.

The challenge is figuring out how to overcome this lack of perceived value that occurs with a lot of people because of how low our price points are. People who are used to buying Japanese eyewear are used to spending $800 to $1200, but here we are selling the same glasses for $225. It’s hard for some people to believe.

It’s such a strong value proposition, though, that we decided to expand. So we made contact with a mill in Scotland and got into knitwear and scarves. Then we started making these hand-welted shoes. At first we thought we were competing with brands like Church’s, but our shoes are actually made at a much higher level — completely handmade — than anything being done by Church’s and cost way less.

Now we’re going beyond fashion — selling copper pans handmade in the North of Italy for $99 to $349.

That’s so cool! So how’s business?
It’s good! We’re growing at a steady rate and I think we have something special on our hands, something that can actually change the game in a manner that I don’t think anyone has for a long, long, long time. I always compare this to when Harrods started. The guy was basically selling tea in a small shop and then the game became “I want to start selling the best of things from around the world.” Now, we’re doing the exact same thing, except we have the power of technology behind us. We don’t have the overheads involved with a traditional store and we can offer all of that stuff from around the world at a price that I don’t think anyone out there today can compete with.

We’re actually getting into food as well!

That sounds interesting.
It will be sort of like Eataly online, except without those crazy markups!

The markups at Eataly are insane!
Exactly. We’re just pulling it together now. We’re not even going to brand it with our own name. The products are going to be branded by the artisans that make them and it’s actually going to be run as a subscription model so that you are paying a subscription fee and then buying the products at wholesale — sort of like Costco for high-end, luxury food.

Wow. Sounds amazing. Sign me up for all of it!

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