Lovers + Friends, Revolve

Revolve, which brought Alliance Apparel Group into its fold in a deal revealed Friday, will enter the footwear fray come spring and is on a revenue trajectory that — if consistent — could have the company hitting $1 billion in the next few years.

CERRITOS, CALIF. — Contemporary e-tailer Revolve’s growth streak has caught a second wind.

Revolve, which brought Alliance Apparel Group into its fold in a deal revealed Friday, will enter the footwear fray come spring and is on a revenue trajectory that — if consistent — could have the company hitting $1 billion in the next few years.

Revolve’s purchase of Los Angeles-based Alliance, for an undisclosed amount, adds Lovers + Friends, Tularosa and NBD to its portfolio. Revolve also owns the online shop Forward by Elyse Walker.

The shoe line, named Raye, was in the works at Alliance prior to the deal’s close. It launches with 30 styles priced from $135 to $300. “Alliance was really a diamond in the rough,” said Revolve cofounder and cochief executive officer Mike Karanikolas. “We feel like their trajectory is tremendous. They’re on a great track. We can support them with capital and high-level advice.”

Alliance is expected to close this year with $18 million in sales, up 140 percent from the year-ago period. That projection is based largely on the natural growth track of the three brands and it’s likely the company could beat that figure, Karanikolas said.

Alliance designs its lines out of Los Angeles, where the company will keep its headquarters. Founders Mitch Moseley, ceo, and Raissa Gerona, chief creative officer, will stay on.

As for a Revolve-branded offering, it’s something the two think about, but there are no firm plans for that in the future even with the close of this deal.
Alliance’s resources could potentially be leveraged across Revolve’s stable of designers, now totaling more than 500, particularly the younger ones, Revolve cofounder and co-ceo Michael Mente pointed out.

The deal, in some ways, also serves as a safety net for Revolve by ensuring its top brands can successfully scale. Lovers + Friends became the company’s top-selling brand in 2013 and that continued into last year.

“I won’t mention who. It was in late 2013, our number-two line went out of business and that was a big shock to us,” Mente said. “We’ve been more conscious to stay in deeper communication [with brands].”

There are no additional deals in the works, but Revolve is open to discussions.

“I think we’ll be very open and opportunistic about it when there’s a brand that we know that resonates [with customers],” Mente said. “It’s a shame because in the past we weren’t very open to it and we saw some of our very important brands go out of business.” Revolve is projecting $400 million in companywide sales this year, which would mark the third straight year of 50 percent year-over-year growth. That rate of growth, if continued over the next three years, could propel the company to the $1 billion mark.

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