NEW YORK — Luxury sales have been somewhat anemic lately, but Moda Operandi isn’t retreating from that gilded and rarified corner of the market. On the contrary, the e-commerce site is digging its well-shod heels deeper into high-end territory.
“This year we’re going to stretch our tent wide and put stakes in the ground,” said chief executive officer Deborah Nicodemus. “We’re focused on the international business. We’re growing aggressively, but the objective is to balance growth with profitability.”
Moda Operandi’s sales volume will be more than $100 million in 2016, Nicodemus said. In terms of transactions, the average online order at Moda Operandi is $1,200, compared to the typical online spend of $300, Nicodemus said.
“Our international growth is coming from the high-touch aspect of our business,” she added. The company in September 2014 opened a consumer-facing showroom in London. It took two years for Moda Operandi to understand how to operate the showroom, being geographically removed and having a non-inventory model. But the company figured it out and “we became very successful at it,” Nicodemus said.
In the next five years, the ceo said 15 showrooms will open, including one in Abu Dhabi next year, followed by units in Hong Kong and Seoul.
“We’ll backfill with locations in the U.S. in New York, Texas, California and Florida,” Nicodemus said. “We’ll also enter Canada in Vancouver.”
Tokyo and other cities in Europe are also on the list.
The locations will be exclusive, in keeping with Moda Operandi’s modus operandi. “It’s not about traffic,” Nicodemus said. “They’ll be serving one client or five at most” at one time.
That will allow stylists to “find all the brands she adores in her size,” Nicodemus said, adding that designers will visit showrooms to share their collections with groups of clients following their runway shows.
“We’re using the showroom to help us define big opportunities, which will serve the Internet side of the business,” the ceo said. “They’re not means just for transactions. It’s really more experiential.”
At the same time the showroom strategy is being implemented, the company will pursue a high-tech transformation of its web site to help serve international clients.
“We’re localizing languages and currencies and services unique to those regions,” Nicodemus said. “It’s a huge opportunity.”
Another avenue for growth is category expansion.
Nicodemus has her sights on the men’s business, which has been a general bright spot at retail for some time.
“In 2019, we’ll start doing the heavy lifting for a men’s web site,” she said. “So many men have repeatedly asked us to implement a men’s business. We’re not going to be taking baby steps.”
As always, Nicodemus will test and learn before putting her foot on the accelerator. A test of a men’s gift guide last fall represented 10 percent of Moda’s total volume for the holiday period. A Father’s Day store in June that opened on the Moda web site and sold gifts and ready-to-wear, captured 13 percent of sales for the period.
Men’s will be tested in the showroom prior to a web site launch. A group of about 100 men in Silicon Valley will participate in a trial and help Moda determine how to frame the business. The participants will be looking for gifts for their wives. “It’s a step to build a client file of men,” Nicodemus said. Also, prior to launching a men’s site, Moda will hold trunk shows of runway collections for brands with both women’s and men’s components.
“Typically, category expansion comes from a successful business,” Nicodemus said. “The fine jewelry business, which we launched in April of 2014, has been a big success.”
Prices for fine jewelry range from $10,000 to $100,000 and include one-of-a-kind pieces.
“We had a client base already,” Nicodemus said. “They’re not just browsing. They’re pairing jewelry with evening gowns and occasion wear.” Eye-catching jewelry includes Nam Cho’s blue sapphire drop earrings for $23,100; Renee Lewis ruby snake pendant, $32,890; Wendy Yue’s golden diamond cuff, $21,500 and unusual sapphire and tsavorite snake cuff, $18,000, and Sanjay Kasliwal’s Indo-Russian emerald and pearl earrings.
“We’re expecting significant growth in high jewelry,” Nicodemus added. “Our high street delivery time is two months to five months. We’ll launch an in-season business to coincide with fashion week. It will be a boutique business, making deliveries in five weeks with prices from $1,000 to $10,000. It will be a high-end branded type of business with Moda’s point of view.”
The new boutique jewelry offering will feature multiple designers, but it will be more about lifestyle and trends than singular statements.
Selling unique designs, whether in fashion, fine jewelry or accessories, is critically important to Moda Operandi. Nicodemus said it’s ingrained in the brand’s DNA and is what sets Moda apart from its competitors.
Moda photographs an entire collection after a runway show, not just the most commercial part of the collection that department stores typical buy, which Nicodemus estimated constitutes about 25 percent of a designer’s line.
“Department stores are trying to stay within these guard rails,” she said. “We want to be a platform for emerging talent.”
It’s not simply altruism that keeps Moda on the hunt for new talent to nurture. The site’s customer is most interested in the 75 percent of a collection that isn’t bought by department stores, Nicodemus said, explaining that Moda shoppers want the most unusual pieces, for example, Dolce & Gabbana’s corseted tinsel dress, $12,000, and Giambattista Valli’s long chevron mink coat, $7,200. From emerging designers there’s Isa Arfen’s spray frock risqué dress, $1,590, and Johanna Oritz’s Anne Boleyn dress, which is exclusive to Moda, $4,250.
“We’re styling the client from head to toe,” Nicodemus said. “We merge two separate businesses — emerging talent and high, international luxury brands.”
In addition to going to established fashion capitals, Moda buyers visit less obvious style hubs such as Berlin, Sydney and Seoul.
“We need a very strong point of view,” Nicodemus said. “If you don’t have a different point of view, why? We have different criteria for bringing on new talent.” If carefully managed, new brands can perform at the same level as established ones, she said.
In another attempt to offer consumers different prisms through which to view fashion, Moda Operandi has partnered with Vogue. The publication is providing edits of collections. Select items will be available for pre-order or purchase on Moda’s site. The partnership is being expanded from a test for New York Fashion Week to include editorial content. First up is Vogue accessories editor Grace Givens’ selection of fine jewelry with a floral or other natural motif.
“The idea is to merge editorial and commerce,” Nicodemus said. “We’re both interested in emerging talent and focus on international luxury brands. Our center of gravity is fashion.”
Vogue will provide edits during New York Fashion Week, followed by content surrounding lifestyle and gift giving. The partnership will be featured on Moda and Vogue’s web sites.
“We are happy to be able to build upon our long-standing relationship with Moda Operandi. This partnership allows us not only to share our runway favorites directly with our readers, but also to provide them with the opportunity to purchase those looks directly from Moda Operandi,” said Hildy Kuryk, Vogue’s executive director of communications.
“It’s their authentic voice,” Nicodemus said. “They’re defining what the stories should be. Our [specialty] is curation and fulfillment. They’ll go into the marketplace for each fashion week city. They have a unique and authoritative voice. It will be a special synergy.”
Nicodemus said Vogue will receive a percentage of sales connected to the items it highlights. “We’re going to continue our own curations,” Nicodemus stressed. “We also do editorials ourselves.”
Lauren Santo Domingo, a socialite and Vogue editor, cofounded Moda Operandi in 2011 with Aslaug Magnusdottir, an Icelandic entrepreneur and former Gilt Groupe executive, who left Moda in 2013.
Moda’s investors have deep pockets and a wealth of synergistic experience. The company in 2015 raised a $60 million round led by Fidelity Investments. Participants in the series E round valued the company at $330 million. “We have a remarkable board that crosses technology and fashion,” Nicodemus said. Investors include LVMH Moët Hennessy Louis Vuitton, Fidelity, Condé Nast and New Enterprise Associates. Previous financing rounds netted a total of $70 million.
Moda Operandi’s foundation is the trunk show in the spirit of couturiers who showed their collections for the upcoming season to prized clients, who in turn, would wait for the garments to be produced. The majority of Moda’s consumers are content to preorder items from a collection, knowing that they have dibs on their favorite products is enough.
For now, Moda is watching the see-now-buy-now phenomenon, rather jumping head-on into the immediate fashion flames. An in-season boutique on the site caters to the smaller segment of shoppers who want fashion instantly. The majority of Moda customers dine at fashion’s banquet table and aren’t looking to be sated by a quick style bite. “The heritage of international design is tied to runways,” Nicodemus said. “That’s not to say those designers won’t have see-now-buy-now capsules. But they’re not going to walk away from their core business. About 90 percent of Moda’s sales is runway. It doesn’t impact us.
“Our client is putting her collection together six months in advance,” Nicodemus added. “She’s shopping online and has the benefit of stylists, a service. We’d go to her living room if she wanted.”
The showrooms Moda plans to open should go far toward fulfilling that desire, while the constant refreshing of the web site helps banish boredom. The London Mews location in Belgravia is in a townhouse. “When you go there, it’s like, exhale,” Nicodemus said. “The site changes every day. We launch 10 new brands across the spectrum from emerging to luxury, and new editorial. We’re very consistent. This is our fourth year of strong results.”