You may not think of the textile business as an industry with explosive growth potential—but you’d be wrong. In less than five years, one company, International Textile & Apparel Inc. (ITA), saw its online sales soar from $6,500 to more than $100M a year. All it took was the magic of the internet.
The family-owned company has been in the textile business for almost 40 years, primarily selling to major retailers like Walmart, Sam’s Club, Costco, Target, Family Dollar, and Dollar General. As our economy is changing and consumers are forming a habit to purchase online, even companies like these with longtime relationships at the largest big-box stores can’t ignore online opportunities.
As late as 2014, when the founder’s son, Mustafa Kothawala, joined the company, ITA had no exposure or presence online. But because its executives had the luxury of a profitable and successful existing business, they were able to take a risk and venture into selling some of the products online to see how they would perform. The first product was bulk packs of terry cleaning cloths that the company was selling to Sam’s Club and that were already in stock at its distribution centers.
Quality always wins, price is important, and reliability—your product has to always be in stock—are the key factors to being successful in an online business.
The company had huge, instant success selling the terry cloths online—so much so that the inventory allocated for e-commerce sales sold out in just a few weeks. ITA decided to add more products that it carried in stock and all of them started to perform very well. Some performed so well that the company had to rush in more inventory by air from a factory overseas to meet the online demand. ITA lost money doing that—but maintained inventory, sales momentum, and most importantly, trust from consumers that ultimately allowed the company to build volume. It also helped build a strong reputation for its consumer brand, Simpli-Magic.
Once it saw success in the terry cloths, primarily used in the janitorial and commercial cleaning industries, ITA’s leadership saw an opportunity to transition from a textile company into a consumer and commercial products company by adding a wide range of products used in the commercial cleaning industry.
Kothawala learned three things very quickly on the e-commerce side of the business: Quality always wins, price is important, and reliability—your product has to always be in stock—are the key factors to being successful in an online business.
There’s one huge benefit in selling online compared with traditional brick and mortar: Selling to a traditional retail store, you are limited by physical shelf space and a buyer will only give you a handful of SKUs. But online, you do not have any physical limitations. ITA can sell thousands of SKUs with no restrictions on space and unlimited categories of product.
Branding has been key to the company’s success in building a sustainable online business. It created the Simpli-Magic brand for its e-commerce division, and now owns five trademarked brands that are sold at all of the major e-retailers, as well as through business-to-business and business-to-consumer channels. ITA is also now seeing a big online following for its textile brand. Repeat customers and businesses are typing it into searches, people are asking about it—and there was even a Hollywood makeup artist who claimed Simpli-Magic’s shop towels were her secret weapon!
It is difficult to build an online brand from scratch and the beginning was a struggle. In the first few years of selling online, the company built a variety of products especially for the commercial cleaning industry. Year three was the breakthrough, and this year—the fifth—saw another level with COVID-related demand for cleaning and household products, and the business has grown exponentially.
The company ran out of stock early on in the pandemic, prompting it to increase supply, but demand outpaced the inventory arriving into its distribution centers. ITA was fortunate to carry some key items that have been trending upward during COVID, and also added products that were essential for COVID, such as hand-sanitizer dispensers, soap, wipes, and masks.
One day earlier this year, the company received a call from a distributor selling products to major restaurants, including McDonalds and Burger King, and ended up doing a deal with them to have its dispensers at several major fast food chains. ITA’s food service line had to pivot from restaurant products to food delivery products such as insulated food delivery bags, pan carriers, and grocery bags. The company carries products with antimicrobial elements that were in high demand, especially early on in the pandemic, including Simpli-Magic Anti-Microbial Face Masks. The masks received several write-ups online, which led to a deal with Walmart to have them at all of their retail locations.
Over the past five years, the company has developed a wide range of products across multiple categories with over 1,000 SKUs in the household, kitchen, janitorial and cleaning, restaurant, and food service spaces. It has a medical and health care product line planned for launch in 2021 as well as a line of hospitality products in anticipation of a post-COVID world where people are dining out and traveling again. With time, ITA plans to develop more categories and hopefully tens of thousands of SKUs for its online business.
The company’s focus for 2021 is growing its online business by expanding its distribution network to be able to reach all customers in the United States within the same or next day. And after recently expanding the business into Mexico and Canada, executives are looking at growing those markets and hopefully expanding into Europe.
To think, all of this came from a simple idea to sell terry cloths online.