The Revolve Group’s M.O. — a high-tech version of follow the customer and give her what she wants — powered big gains last year despite the pandemic.
And cofounders and co-chief executive officers Mike Karanikolas and Michael Mente are ready to go bigger as consumers keep coming out of their pandemic retreats.
Revolve certainly hasn’t slowed down, showing up in person for New York Fashion Week in September; tapping Kendall Jenner as creative director of the Fwrd luxury business, which the group also owns; navigating the supply chain back up, and more.
“Everything is on fire,” Mente told WWD in an interview on Wednesday. “We’ve been talking about reopening for a while. We’re finally really roaring now. A year removed from vaccines, it seems like the customer’s ready to go out.
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“When the consumer is able to travel, that’s the real mark we’re fully back,” he said. “For us, there’s an extra gear to shift to.”
Already, the company is moving pretty fast.
Revolve’s fourth-quarter profits increased 55 percent to $29.4 million from $19 million a year earlier, as sales jumped 70 percent to $239.8 million from $140.8 million. By division, Revolve sales increased 68 percent to $200 million while Fwrd rose 83 percent to $39.8 million.
Essentially, Revolve’s pandemic sales trajectory had it take a little step back in 2020 and then a big jump ahead in 2021 while profits kept moving higher throughout.
Last year, the company’s profits tallied $99.8 million, up 76 percent from $56.8 million in 2020 and well ahead of the $35.7 million seen in 2019. Sales of $891.4 million rose 54 percent from $580.6 million in 2020 and far exceeded the $601 logged in 2019.
The supply chain is still a problem at Revolve — and around the industry — but it’s clearly not holding up business too much.
“We’re definitely seeing delays,” Mente said, pointing to “cost increases, especially in shipping.”
But he said the brand uses close to 1,000 suppliers and has been able to adjust to keep product flowing.
And more of that product is flowing to Fwrd.
“Kendall Jenner has really changed the game for us,” Mente said, describing the hire as “a strong move that is really paying dividends.”
The company has also figured out how to shift more of its Revolve shoppers over to the Fwrd platform, making strategic use of its loyalty program.
But there’s more to do there.
“The overlap of Revolve customers who shop on Fwrd is still in the single digits,” Mente said. “We’re quite confident that we can continue this growth for years on end.”
If Revolve is charging ahead with its luxury bid, it’s taking a more wait and see approach on the buzz machine that is the metaverse, where brands of all stripes are racing to get a piece of something that still doesn’t quite exist.
“There’s a lot of excitement, but also a lot of noise,” Mente said of the metaverse. “Everyone has different rules and visions.”
So Revolve — a leader in technology — is still looking to see which way the digital winds blow.
“The main thing that ultimately will drive our activity is going to where our customers go,” Mente said. “If they are in VR, then we’ll be there and with a lot of energy. If she’s going to be on a yet-to-be-created platform, then we’ll be there.”
That is classic Revolve.
Karanikolas said the company has grown stronger during the pandemic by more or less doing what it has always sought to do: innovate and follow customers.
“We’ve been on an incredible run for the past 12 months,” Karanikolas said. “The most recent quarter is our best by a number of metrics. We’re excited to build on that.”
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