Himel Bros Chevalier bis

[Will Zach]

Previous page in this thread has some discussion over profit margins and jacket production costs, particularly re: Himel. I think the post below captures what I'm responding to.



Just trying to point out we don't really know what the profit margin is, particularly because the overhead and operating costs vary between these makers significantly.

If you don't think there is a healthy profit margin in a $2300 - $2500 artisan jacket, you are living on another planet. Plenty of artisan makers are doing well in the $1100 - $1300 range, using Shinki and other fine leathers.

 

[VestCoast]

If you don't think there is a healthy profit margin in a $2300 - $2500 artisan jacket, you are living on another planet. Plenty of artisan makers are doing well in the $1100 - $1300 range, using Shinki and other fine leathers.

I don't really see your comparison of Field Leathers to Himel as valid. Greg is brand new and getting established, quite successfully so far. Himel has been around for 11 years. Greg has a 6 month waitlist(and growing), more than twice Himel's wait time. Goodwear is years long. Who knows what Field Leathers will look like in a decade, or what sacrifices he is making right now to as competitive as he is. Just checked Diamond Dave's eBay page and he has a jacket listed for $2100. Seeing as were not privy to the business details, I'm not really sure we can judge between a "healthy" profit margin and a sustainable one.

As far as living on another planet goes, it sure feels like it here in TX--6 degrees last monday and 80 out today.

 

[Will Zach]

Maverickson also keeps it around $1100 and somehow making it. My point was that there must be a room for quality labor in the healthy margin in a $2300 jacket. If you claim that said margin need not necessarily be "healthy", sure. But more than likely it is, given all the examples of makers who keep their prices in the $1100 - $1300 range, and somehow have been making it.

 

[willyto]

If you don't think there is a healthy profit margin in a $2300 - $2500 artisan jacket, you are living on another planet. Plenty of artisan makers are doing well in the $1100 - $1300 range, using Shinki and other fine leathers.

Does Greg or Mavericjson employ people and pay 4 salaries or more each month? Because as far as we read, HB has Parker, Dave and 2 machinists (Excuse me if I read that wrong).

People tend to forget about the costs of having people working for you. You must give them a living salary and still be able to make a profit so the business can grow and improve. Himel has been going to Japan for promotionat the CC show, attending Inspiration, etc. That all costs money, marketing, promotion, collaboraton with brands or stores.

You're comparing apples to oranges here by mentioning two makers who are themselves doing the work from their homes and Greg just started on his own, he would shoot himself in the foot if he put more expensive prices.

If someone thinks that either of the makers is getting dirt rich by making custom jackets I think you are the one living on another planet. Specially if we talk about a small scale operation.

I'll repeat it again: Most of us could could stop buying 80 jackets and buy less for more money if we wanted. There's just hoarding mentality. A lot of people in the forum can afford a Himel, a RMC, a Freewheelers, Fine Creek, Buzz Rickson, Eastman, Field Leathers, whatever brand you want to mention. The reality is that people see jackets in numbers " I can get two or three aeros for that price" and stuff like that. Yeah you could but they're not the same jackets and more jackets doesn't mean better.

People who will buy one leather jacket won't mind spend that kind of money. Try purchasing a pair of bespoke shoes or a suit and see how much that costs. Of course there are more or less expensive options but it doesn't mean that the more expensive ones aren't worth it. They're different options.

 

[Will Zach]

Does Greg pay 4 salaries or more each month?

People tend to forget about the costs of having people working for you.

That was exactly my point. That quality labor should have have been included in those 4 salaries.

 

[ton312]

As far as living on another planet goes, it sure feels like it here in TX--6 degrees last monday and 80 out today.

18” of snow last week, 50 and sunny w/ ribeye on the grill tonight!

 

[Superfluous]

If you don't think there is a healthy profit margin in a $2300 - $2500 artisan jacket, you are living on another planet. Plenty of artisan makers are doing well in the $1100 - $1300 range, using Shinki and other fine leathers.

Other than Himel, I personally am only aware of three other companies outside of Japan offering Shinki HH: FL, GW, and SB. Who else is offering Shinki HH?

FL and GW are not “in the $1100 - $1300” range for Shinki jackets. Rather, to the best of my knowledge, both are $1,600 or higher.

SB has considerably greater volume than Himel, FL, or GW, and thereby achieves an economy of scale that enables lower pricing (not to mention the benefit of no upfront R&D costs because of the origin of its patterns, but that is a different story).

FL and GW are one-man bands. Because they make their own jackets, their production costs are considerably lower than Himel, who employs people to manufacturer his jackets. Additionally, Himel rents space for his manufacturing operations. I am not sure whether FL and/or GW work out of their home/garage but, if they do, their operational expenses are even lower.

I don’t think any of these guys are getting rich off of the sale of handmade, artisan jackets. None of us have an accurate understanding of their actual operational costs and most of what is tossed around here is pure speculation. I have reason to believe that Himel sells approximately 300 jackets per year. Lets say Himel’s average gross profit for direct sales is $1,000 per jacket (I have no idea, but an average gross profit figure must include discounted pricing offered during sales) and his gross profit for wholesale sales to third-party retailers is $500 per jacket. Lets say his sales are split evenly between direct sales and wholesale sales to retailers. That is a gross profit of $225,000 ($1,000 x 150 + $500 x 150). Disregarding the numerous expenses that offset gross profit and equating gross profit with net profit – a wholly unrealistic and implausible accounting fallacy – Himel would take home in the neighborhood of $150,000 after taxes (I suspect the actual figure, after factoring in the myriad of operational expenses, is less). I don’t mean to minimize a $150,000 income, but it ain’t the kind of profiteering that warrants condemnation or castigation. Even if Himel averaged a $1,000 per jacket profit margin for both direct sales and wholesale retail sales -- seems highly unlikely given the necessary discounts offered to retailers -- that would still result in a net income after taxes of $200,000 or less. Not the sort of profit that should engender hostility or outrage. Frankly, I would not operate Himel's business, expose myself to the considerable risks inherent in such an entrepreneurial undertaking, and endure the manic customers and critics he must deal with on a daily basis -- including the likes of what has occurred here over the past week -- for this level of profit. I'd rather operate a franchised frozen yogurt shop: "you don't like the peppermint banana swirl that you selected after four samples, and thereafter ruined by topping it with raisins and coconut -- no problem, choose another on the house."

 

[JMax]

Other than Himel, I personally am only aware of three other companies outside of Japan offering Shinki HH: FL, GW, and SB. Who else is offering Shinki HH?

FL and GW are not “in the $1100 - $1300” range for Shinki jackets. Rather, to the best of my knowledge, both are $1,600 or higher.

SB has considerably greater volume than Himel, FL, or GW, and thereby achieves an economy of scale that enables lower pricing (not to mention the benefit of no upfront R&D costs because of the origin of its patterns, but that is a different story).

FL and GW are one-man bands. Because they make their own jackets, their production costs are considerably lower than Himel, who employs people to manufacturer his jackets. Additionally, Himel rents space for his manufacturing operations. I am not sure whether FL and/or GW work out of their home/garage, or rent space.

I don’t think any of these guys are getting rich off of the sale of handmade, artisan jackets. None of us have an accurate understanding of their actual operational costs and most of what is tossed around here is pure speculation. I have reason to believe that Himel sells approximately 300 jackets per year. Lets say Himel’s average gross profit for direct sales is $1,000 per jacket (I have no idea, but an average gross profit figure must include discounted pricing offered during sales) and his gross profit for wholesale sales to third-party retailers is $500 per jacket. Lets say his sales are split evenly between direct sales and wholesale sales to retailers. That is a gross profit of $225,000 ($1,000 x 150 + $500 x 150). Disregarding the numerous expenses that offset gross profit and equating gross profit with net profit – a wholly unrealistic and implausible accounting fallacy – Himel would take home in the neighborhood of $150,000 after taxes (I suspect the actual figure, after factoring in the myriad of operational expenses, is less). I don’t mean to minimize a $150,000 income, but it ain’t the kind of profit that warrants condemnation or castigation. Even if Himel averaged a $1,000 per jacket profit margin for both direct sales and wholesale retail sales -- seems highly unlikely -- that would still result in a net income after taxes of $200,000 or less. Not the sort of profit that should engender your apparent hostility. Frankly, I would not operate Himel's business, expose myself to the considerable risks inherent in such an entrepreneurial undertaking, and endure the manic customers and critics he must deal with on a daily basis -- including the likes of what has occurred here over the past week -- for this level of profit. I'd rather operate a franchised frozen yogurt shop: "your don't like the peppermint banana swirl that you selected after four samples -- no problem, choose another on the house."

Here is my contribution to the thread— if you do open up the yogurt spot, please offer macadamia brittle yogurt. I dig that stuff.

 

[TheDonEffect]

I've had this conversation here before regarding costs. Consider that the cost of enough CXL leather to make a jacket is about 400-500, then you factor in another 50-100 for hardware (I learned quickly that buttons for instance can add up quick), then labor, yeah 1000 doesnt leave a whole lot more.

Then you consider how, hmm, discerning? certain consumers are, wanting custom measurements, design changes, customer service (exchanging emails adds up a ton of time), factor in that not all hides are "flawless", that customers are always totally satisfied with fit (with measurements they provided), etc etc really how much money are they making. Then, if this matters to you, what sort of business you're supporting.

 

[Marc mndt]

Who else is offering Shinki HH?

Thedi at about €1600

Additionally, Himel rents space for his manufacturing operations. I am not sure whether FL and/or GW work out of their home/garage but, if they do, their operational expenses are even lower.

Greg rents a space.

I don’t think any of these guys are getting rich off of the sale of handmade, artisan jackets.

I don't think so either. I've made a similar calculation before and like you I came to the conclusion that profit margins aren't that big and if you're doing it for the money, there are easier ways to make a living.

These guys are in this business because it's their passion.

 

[plainsman]

The discussion on pricing and margin seems a bit futile. Nobody is forced to buy a Himel jacket. Each maker chooses his/her market positioning and buyers decide if the price is worth it or not (for value, quality, prestige or whatever reasons). However, I find very useful to get feedback when quality is less than great as these are still expensive garments.
For disclosure: I do not own a Himel jacket (i am only moderately insane with two aeros, one goodwear, one vanson and a few others from less regarded brands)

 

[Marc mndt]

Each maker chooses his/her market positioning and buyers decide if the price is worth it or not (for value, quality, prestige or whatever reasons). However, I find very useful to get feedback when quality is less than great as these are still expensive garments.

+1. I think it should be ok to discuss all the quality aspects of those (expensive or inexpensive) garments here on the lounge, no matter whether we think quality is great and in line with our expectations or whether it fails to meet our high expectations. Potential buyers are only able to make informed decisions when we do not only praise the good ones but also discuss the 'not so good' ones.

Edit : typo

 

[Peacoat]

As a reminder: Once a thread is locked, an end run may not be made by starting a new thread on basically the same topic. That new thread will be summarily deleted.

As to the Vendor thing, it appears this status isn't fully understood:

"We mark those who are here to offer goods or services (once or many times) as a 'Vendor' right away.
Vendors may post an introductory note explaining what is offered. After that, posts that are sales messages will be removed by the Bartenders."
https://www.thefedoralounge.com/threads/merchants-and-the-fedora-lounge.52323/

Note that they are "marked" as a Vendor. This is so the bartenders will know they aren't allowed to advertise on the forums. They certainly don't pay for that "title." While they aren't allowed to advertise, they may join general discussions in the forums, as long as they aren't promoting their product.

Nor are Vendors allowed to advertise in the Classified section.
https://www.thefedoralounge.com/threads/read-this-before-posting-here.3683/
They may, however, occasionally sell items in the Merchants forum.

To summarize: vendors don't pay for the title; TFL receives no money from them. They aren't allowed to advertise or sell items in the Classified section. They may occasionally sell items in the Merchants forum.

Before this thing erupted, I had no real feeling for what Himel did. I vaguely knew he made jackets, but that was it. In talking with the other bartender involved with the thread in question, I found out that he didn't know Himel was marked as a Vendor. And neither did I. I didn't even realize he was a member of TFL.

So, we aren't protecting a manufacturer; we are attempting to keep the forum on track with the principles of TFL.

 

[Edward]

Another comment from behind the bar...

This thread has been pruned of the moderation issue which has been since discussed elsewhere; my fellow bartender's post above has been left for information purposes.

The tidying up here has been done to return it to its original purpose: both the OP's original review and later revision, and the different discussions that have flowed therefrom, should be visible to all.

Normal service shall now be resumed.

 

[Carlos840]

Another comment from behind the bar...

This thread has been pruned of the moderation issue which has been since discussed elsewhere; my fellow bartender's post above has been left for information purposes.

The tidying up here has been done to return it to its original purpose: both the OP's original review and later revision, and the different discussions that have flowed therefrom, should be visible to all.

Normal service shall now be resumed.

Thank you Edward, this is very much appreciated.

 

[dudewuttheheck]

@Edward Thank you for doing this and for allowing @jeo speak about his experience as well.

It says a lot that you allowed us to complain about you and your fellow mods and listened to us as well instead of blocking all discussion and banning people. You are a huge reason why this forum is so great.

 

[Fonzie]

^ Agreed!

 

[MrProper]

It's a shame when you lose your fun with the jacket because of the poor quality, but the fit is absolutely awesome.

 

[Monitor]

It's a shame when you lose your fun with the jacket because of the poor quality, but the fit is absolutely awesome.

Ultimate TFL fit IMO!