Guesst, a new online B-to-B marketplace linking brands with retailers offering short-term selling space, is recharging the Steven Alan stores.
From Guesst’s “pop-share” platform, Steven Alan and his team are selecting brands to transform his three namesake stores in New York into “home and lifestyle labs.” The 1,000-square-foot shop at 465 Amsterdam Avenue on Manhattan’s Upper West Side; the 1,800-square-foot shop at 103 Franklin Street in Tribeca, and the 900-square-foot location at 347 Atlantic Avenue in Brooklyn are relaunching around mid-October for the holiday season, each with an eclectic assortment of home, gift, beauty and fashion products.
“We went through a whole rightsizing of the company, but I kept thinking about the evolution of the company and what I really like to do. I like to discover brands, curate them and present them in an innovative way,” Alan told WWD.
At one time, there were 23 Steven Alan stores in the U.S. But for the three remaining units, the association with Guesst means “bringing brands in to create newness without a tremendous amount of inventory,” Alan said. “We will help the brands build business in our brick-and-mortar stores.” There are also five licensed Steven Alan stores in Japan.
The Guesst software operates like a digital matchmaking service for the industry, where brands and retailers check each other out online. If they choose to work together, brands pay a licensing fee to occupy a small amount of retail space for a limited time, called a “pop-share.” It’s all negotiated on the Guesst “chat room” and ultimately it leads to signing a “smart” contract online.
“These are collaborative efforts that shed light on the brand’s identity, minimize their costs, and maximize retailers’ revenues,” said Jay Norris, cofounder and chief executive officer of Guesst.
During an interview at Manhattan’s Spring Place, where Guesst is based, Norris said there’s flexibility built into the pop-share model. Brands can be displayed on racks, walls, tables, in windows or via end-caps, and that a brand’s display could be up for weeks, months or a season, depending on what both parties agree upon, he noted.
Norris characterized Guesst as an alternative to the traditional wholesale model, which increasingly brands are abandoning. Many designers and brands feel abused by retailers squeezing them for markdown money and chargebacks, and complain they’re not presented well on selling floors.
Norris also said Guesst enables brands to enter the physical retail space, albeit in a modest way, rather than going to the cost and trouble of opening a pop-up or permanent store. Through Guesst, brands send products to retailers on consignment; brands leverage retailers’ staff, space and customers, and in a relatively fast and inexpensive way, they can test markets they haven’t sold in before.
According to Norris, Guesst launched in beta in August 2018, is self-funded, seeking investors, and has 350 companies listed on its marketplace, including two mattress and bedding companies, Tomorrowsleep.com and Coyuchi.com; Public School for upscale streetwear; Floyd furniture; Loli beauty; Where Mountains Meet fashion, and Petite Vigogne bedding for babies. Aside from Steven Alan, other retailers engaged in the Guesst platform include four Manhattan stores – Le Board, Upton Collective, Michele Varian and Il Fiorentino — and Retail Therapy in Southampton, N.Y.
For retailers, Guesst helps offset overhead with the fees that brands pay and potentially provide increased revenues. Retailers sell the merchandise without inventory carrying costs. “You can transform the look of your store and get paid for it,” Norris said.
Alan Mak, a partner in Public School and a member of the Guesst board, said the Guesst marketplace provides data-capturing opportunities such as sell-through information on styles and size on a local and a daily basis. Typically, data provided to brands by retailers is aggregated across many doors and provided weekly.
Mak is interested in Guesst because he recently shifted the business model at Public School to direct-to-consumer only, no longer wholesaling to stores. “At certain points in the life cycle of a brand, different things are appropriate,” he said. “I’m still a big believer in brick-and-mortar,” Mak added, noting that Public School has a pop-up in lower Manhattan. Still, he suggested pop-ups have their challenges. “They’re less risky than permanent brick-and-mortar stores, but they still involve staffing, leases and technology stacking. Digitally native brands are opening stores though they involve very big cap-ex.”
Others on the Guesst team include board member Darin Vest, who handles global retail real estate for L’Oreal; Guesst executives include cofounders Michele Varian, Alex Libkind, Edward Ludvigsen and Yves Nemorin.
Alan, who serves as a strategic adviser to Guesst, said the mix at his stores will encompass crafts, pottery, home brands and fashion, as well as Steven Alan products. “The categories are pretty fluid depending on the space and the synergy. We are still in the process of figuring out which brands are appropriate for which stores. A lot of brands have requested information to be part of it.
“Not everyone wants the tremendous expense of opening a store and staffing it,” Alan added. “Quite frankly, that really is not the right business for many of the brands to be in. The product can be fantastic, but very narrow and best suited to be situated around other brands to create a rich customer experience.”