brands fashion customers also seasonal may online
How fashion startups can raise the right kind of moneyMeanwhile, Silas Capital’s Thorne invested in Hatch because the “largestdemographic in the US is the 26-year-old millennial, which is also the averageage nationwide of first-time pregnancies. There is a tidal wave of women aboutto enter this stage of life.”Other indicators investors look for are brands whose core product — somethingthat represents about 80 per cent of sales — is less seasonal and more basic.“Investors don’t like taking fashion risks because seasonal product may nothit and you have to figure out how to sell off the inventory,” says Thorne,who also has an investment in Australian wallet company Bellroy, a brand witha similar profile. “You may have seasonal products, but the goal is to bringpeople to the site to drive purchases of the core product.”“Fast fashion has a perspective that resonates quickly but fades away,” saysHayden. She liked Argent because she saw that customers were not only buyingcolourful statement pieces but also neutrals, which tend to be synonymous withquality and functionality.Have an online-to-offline strategyWhile traditional physical retail may be struggling, pop-ups have become acornerstone of the 21st-century fashion business. Brands that show they candeftly navigate online and offline tend to have a better chance of raisingfunding.“Digitally native brands that have been able to continue to grow online butfound outlets for growth are attractive,” Thorne says. “A proven ability tosell online and in owned retail and select wholesale is important as the costof acquiring customers grows.”Hatch has hosted trunk shows since 2011. After finding that customers spendmore in person than online, Goldman opened stores in Santa Monica and NewYork. The latter broke even six months after opening in 2017.When Mejuri’s Sakkijha began testing showrooms, she found that up to 80 percent of in-store purchases were from first-time customers, but that they werealready familiar with the brand. “They just wanted to interact with it beforemaking a decision,” she says. Mejuri plans to use the money it has raised toexpand the brand’s physical presence.“Phenomenal founders have a lack of fear. They bend reality to see a path tosomething different,” Larco says. “There are very few creative people who areanalytical and process-oriented, and when you marry the two, it’s a force.”To receive the Vogue Business Technology Edit, sign up here.Comments, questions or feedback? Email us at [email protected].