Le Tote promises magic for consumers, growth for SJ County

 'It's like delivering Christmas every week'

By Reed Fujii

Record Staff Writer 

Posted Mar. 25, 2016

STOCKTON — Le Tote, an e-commerce startup providing a subscription clothing service for women, recently moved its distribution center to Stockton, where it now employs about 150 people.

The service — similar to Netflix when it still dealt in DVDs — provides clients a mix of three pieces of clothing and two accessories for $59 a month. Customers can wear them for as long as they want, then return everything and receive a new selection within days.

Clients may also keep favorite pieces and pay for them at a discount from retail, Le Tote officials say.

At the Stockton facility, just off Highway 99 north of Arch-Airport Road, the focus is receiving clothing and accessories, washing and repairing as needed, and filling new orders to meet individual customers’ preferences and needs.

The goods are inspected as they arrive, checked again after washing, then inspected again before going into a Le Tote box. There, stray threads may be snipped or wrinkles steamed out.

“When she opens the box, it has to be a magical experience,” said Vijay Khare, operations vice president.

His goal is to surprise and delight.

“It’s like delivering Christmas every week,” Khare said.

And the San Francisco-based start-up seems to be delivering on that promise.

It has received $30 million in capital funding; including a second round of venture capital funding in November of $15 million.

Le Tote officials report shipping nearly 1.5 million products in 2015, valued at more than $100 million, and look to more than quadruple that, projecting shipments of more than $450 million worth of apparel and accessories this year.

Its move to a 150,000-square-foot warehouse in Stockton, from a 24,000-square-foot facility in San Leandro, is intended to accommodate that growth.

Janice Miller, Stockton’s deputy director of economic development, said Le Tote’s e-commerce, technology-based business is the city’s sweet spot.

“It’s right in line with the types of industry we’re wanting to bring to our community,” she said.

Miller said Le Tote bringing its distribution center to Stockton — much as Tesla is manufacturing parts in Lathrop and Amazon.com has fulfillment centers in Tracy and Patterson — could be a sign that the Bay Area’s tech businesses will spread into the Central Valley. It’s a wave long anticipated by San Joaquin County economic development leaders.

“This is a turning point,” Miller said. “They’re getting priced out of the Bay Area.

“It’s all coming together after years of footwork of promoting … Stockton to the Bay Area and Silicon Valley.”

And Miller said the clothing rental concept — allowing women to match clothing and accessories from a huge selection, using their computers or mobile devices and leaving the laundering to someone else — is very attractive.

“I think it’s going to take off,” she said.

Knowing the customer’s preferences and needs, in great depth, is a key to the company’s success, said Brett Northart, Le Tote president and co-founder.

Traditional retailers, while relying on expert buyers and fashion designers, really have to guess at what consumers will want to buy months in advance and ordering such goods from manufacturers.

Then, those retailers stock “items in stores all across the country and then (hope) people will wander by and like what is there.”

Le Tote starts with knowing each customer’s size, color and style preferences and then builds on that as it receives feedback on its deliveries from 80 percent of its subscribers.

So for Northart, “It’s not so much of a guess as interpreting the data.”

With that data, Le Tote can better track and anticipate its consumers’ demands.

Yes, clothing is a highly competitive space.

There are other e-commerce startups offering subscription or rental services similar to Le Tote. Of course, there are more traditional clothing retailers. And Amazon.com is broadening it clothing offerings.

But Northart said he needs to pay most attention to his own business.

“My favorite quote on this is most startups die of suicide not homicide,” he said.

“There are a lot of brands we admire and we take cues from … but for us, it’s really about figuring out what our mission is and executing against that.”

More information about Le Tote may be found, naturally, at Letote.com. For employment information, send an email to jobs@letote.com or visit Letote.com/careers/.

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