NEW YORK — In a marked shift from its original business model, designer trunk show e-tailer Moda Operandi is launching an in-season e-commerce business.
The strategy is aimed at capturing new customers who won’t wait months for delivery of next season’s purchases while also capitalizing on the Moda Operandi name in the luxury e-tail arena.
The site, launched in February 2011 by founders Aslaug Magnúsdóttir and Lauren Santo Domingo, is introducing its foray into immediate deliveries with a series of holiday gift shops that go live today. The full launch of the initiative will come Dec. 7 when a redesign of the site is introduced, offering customers the choice of shopping a complete in-season boutique as well as Moda Operandi’s designer trunk shows, which provide preorder access to an array of runway collections.
“We want to better serve our current customers and reach a new customer base. We’ve been able to establish a name in various pockets of the world and we want to take advantage of our positioning and build our market share quickly,” said Magnúsdóttir, chief executive officer of Moda Operandi.
Moda Operandi will unveil seven different themed gift shops over the next week, selling merchandise from brands like J.Mendel, Loewe, Nancy Gonzalez, Eddie Borgo, Peter Pilotto and Alexandra von Furstenberg. Next month, the full in-season rollout will include about 50 brands for resort — including Marc Jacobs, Marni, Valentino, Giambattista Valli, Charlotte Olympia, Nicholas Kirkwood, Peter Som, Prabal Gurung, Marchesa and Thakoon — with the vendor matrix tripling for spring.
The company expects in-season sales to account for 10 to 15 percent of total volume this year, growing to 25 percent next year. While trunk shows will remain the core sales driver for the next few years, the in-season business could surpass preorders within three to four years, said Magnúsdóttir.
The move into traditional e-commerce means Moda Operandi will be placing buys, stocking inventory, processing returns and clearing end-of-season merchandise for the first time. It will also compete with a number of established e-commerce players like Net-a-porter, Saks Fifth Avenue and Neiman Marcus, whereas previously it had much of the designer preorder business to itself.
“Our core business model is one of the most beautiful business models. There’s no inventory risk, it’s 50 percent cash up-front and you come through with 100 percent sell-throughs,” admitted Magnúsdóttir of pre-order sales. “When we tell [our investors] we’re going to start doing traditional retail, some of them were like, ‘That’s no good compared to your traditional business model.’”
The new strategy opens up a much larger market to Moda Operandi. As with many categories, the luxury market is growing at a faster rate online than offline. According to an October study from Bain & Co., e-commerce sales of luxury brands are forecast to jump 25 percent in 2012 to 7 billion euros, or $9.06 billion, compared to a 10 percent increase for the overall global luxury market.
“The Moda Operandi customer has a broad range of luxury e-commerce needs and this is a natural extension of the unique and distinct customer relationships we’ve built,” observed Tony Florence, a general partner at venture capital firm NEA, the largest investor in Moda Operandi. “We’re taking on inventory and it’s a different business than preorder, but we think from a return on capital perspective it should be a comparatively attractive business.”
In January, Moda Operandi will move from its 5,000-square-foot offices at 72 Madison Avenue to a 25,000-square-foot space at 315 Hudson Street, which will house its headquarters along with a new warehouse and fulfillment center and a photo studio. About 13,000 square feet will be dedicated to office space, about 8,000 to inventory and the remainder for the photo studio.
Moda Operandi currently works with about 300 brands in its trunk show business. Second-half revenue in 2012 is on track to triple from the same period in 2011. About 60 percent of sales are from the U.S. and 40 percent are international.
In June, Moda Operandi raised $36 million in a new round of fund-raising from investors including NEA, RRE Ventures, New Atlantic Ventures, IMG, LMVH Moët Hennessy Louis Vuitton and Condé Nast.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews