“Clicks to bricks” was one of the overarching themes as private retail and apparel companies presented at the ICR Conference in Orlando, Florida.
Online retailers are finding that as they build their brand they end up needing brick-and-mortar stores. Investment bankers want to know whether these e-tailers can transition to physical stores profitably, especially at a time when traditional retailers are scaling down.
JustFab, which owns the popular Fabletics brand has already opened 6 stores in 2015 and has another “significant” amount planned for 2016. The company is clearly operating with plans to eventually take the company public. The apparel company has already managed to raise over $300 million in financing. And their operating approach is music to bankers’ ears: the company has physical stores that can be paid back in 12 to 15 months, and are cash-flow positive in 120 days.
Other brands like Strong Suits is preferring to partner with a physical store such as Nordstrom’s, which gains from having a hip, Millennial-anchored brand with a heavy social media presence coming into the store. Strong Suits serves as a traffic driver for shoppers seeking to see the brand in person. And Strong Suits gets to see its clients face to face, but without the commitment of a physical store.
Meanwhile, Nordstrom’s seems to be mining social media for its new store brands. Threads 4 Thought, a sustainable and cause-related brand noted that they were increasing their presence at Nordstrom’s. The company is trying to shrink its exposure to discount stores and Whole Foods, which has been a strong source of sales to more specialty and department stores.
Stance, the hot sock company also sells its products in Nordstrom’s. But one thing that makes this unique sock company unique is that any socks not sold in Nordstrom’s are returned instead of being marked down. Stance then puts these socks in its own stores, which it has just started opening with one shop on each coast. This small company recently raised $50 million in Series C financing, following a $5 million and a $25 million round. Partnerships with NBA stars and entertainment stars like Rihanna have quickly turned Stance into a sock favorite.