Pedro Palha is one of three co-founders behind ISTO., the Portuguese label whose name is an acronym for Independence, Superb, Transparency, and Organic. A firm favourite amongst members of the Studio Graft team due to its timeless, affordable, and high-quality wares, all four tenets are guiding principles for this business, which is fast becoming a direct-to-consumer market leader with a strong online community and six stores in Europe.

Prior to starting ISTO., Pedro got a taste of working in finance (not uncommon for fashion industry professionals) and later in an incubator business in Berlin, specialising in tech start-ups. Both are a far cry from the intricacies and difficulties of running a fashion business, which he had lodged in the forefront of his mind that he wanted to start. “In 2017, I came back to Portugal to explore this idea within the Portuguese textile industry. I then made some calls and met who would be my eventual co-founders. They’d both been working within advertising and working with the biggest Portuguese companies, and they really knew how to create a brand and pursue the right pillars and fundamentals,” he says over the phone whilst taking refuge in the shade in the Algarve on holiday. “I had the idea of creating a brand which offered high-quality basics ​​[a word he later laments using] at a fair price with a transparent mindset. With the other two, we decided that everything needed to be made in Portugal and had to be organic.”

Fast-forward seven years and ISTO. is still very much independent, and its goods are certainly fairly priced. For example, a mid-weight organic cotton T-shirt costs a mere £40 and an exact, holistic breakdown of the price is clearly displayed on the product page. They’ve managed to achieve this by favouring the increasingly popular B2C business model and local production, which provides ISTO. and other brands across a spectrum of categories significantly more control over pricing and promotions, thus allowing them to influence margins and set prices to align with their view of their products’ value.

It’s an organic approach, which, Pedro says, “has benefits in terms of rent, brand recognition, storytelling, brand positioning.” That said, it comes with risks and limitations. “Since we don’t have wholesalers, etc., and it’s harder to grow faster. We can only grow by either investing in performance marketing or opening new stores, and both are expensive.” 

Some argue that there should be more brands like ISTO. because of its values, ethics, and commitment to sustainable practices. On the other hand, some believe we don't need more brands and the market is already too saturated. 

There’s no denying that ISTO. has like-minded counterparts, and Pedro readily acknowledges this. But does he see these brands as competitors or allies? “They are obviously competitors, but in a positive and constructive way. Sometimes, we feel inspired by our competitors. There are a few we’d like to follow and a few we wouldn’t. We all see it positively. We live in a world where creating value is essential, and economic growth is necessary to improve our quality of life. I'm completely okay with not being a $200 million company; we want to grow, be available worldwide, follow the right practices, and even inspire other brands. We aim to be an alternative to cheaper and more famous brands. I'm confident that big conglomerates will continue to merge with and acquire sustainable brands in the future.”

Since the 1990s, Portugal has slowly but surely established itself as a go-to supplier for responsible clothing manufacturing. We’d easily hazard a guess that if you were to check the care label on a number of your favourite items of clothing, you would see Made in Portugal. “Labour is very fair in Portugal and the European Union regulates everything, and so there are lots of rules in which we need to abide by,” he says. 

A rule set upon themselves, however, is the exclusive use of natural fibres. “We use organic cotton, which is free from 99% of the pesticides and chemicals found in traditional cotton. Our organic farmers respect the plant's natural growth process, and our cotton is either sourced from Turkey and the United States, but we purchase the yarn in Portugal or from an Italian supplier.” From a design perspective, however, ISTO. has made it overwhelmingly clear that it will only create clothing with designs that “extend their lifespan; you can produce an incredible T-shirt with very good quality with materials sourced correctly. But if it has a graphic of a tiger or a huge logo on it, you've sentenced the T-shirt to its death.”

If sustainability was the buzzword of the last five years, the latest buzzword is community—something ISTO. has organically cultivated, particularly within the food and beverage world. In London, for instance, it has hosted parties and events with the niche magazine SLOP, which champions independent restaurants and high-quality produce, much like ISTO. champions organic cotton. “We're always around food and wine, so it was natural to start conversations with people we like—and some of them were restaurant owners. It's interesting to find similarities between these industries and clothing, particularly in sourcing the right produce. In the end, we feel there's a lot to be shared. It's super refreshing to be involved with these sorts of people, and we even want to explore new business opportunities in this area.”

The future is looking extremely positive for ISTO., but as the business grows, it will be interesting to witness how it goes about ensuring that the product it’s producing in five years' time is of the same high quality as it is now. Some brands would buckle under the pressure of growth, and would seek investment to prop up sales and invest in multiple areas but not ISTO. “I don't know what the future holds, but I truly believe that by keeping it private for as long as we can, we will be able to make the best decisions possible. We have in our name Transparently Made in Portugal, so if our clients start to see products made in other countries, then we wouldn't be consistent.” When asked about his vision for the business in five years, Pedro is most excited about opening a store in London in late 2025 and another in the U.S. by 2029. Reflecting on the challenges of the past seven years, he acknowledges the difficulty of balancing business growth with raising a family, a balance he has managed well. As we conclude our call, he returns to his holiday with his family, demonstrating his commitment to both his personal and professional life.