With the high-end jewelry sharing business Flont, founder Cormac Kinney aims to help a host of companies cash in on the sharing economy.
Kinney, who is married to jewelry designer Mimi So, launched the site “fairly stealthily” in January with a little help from New York stylist Jackie Astier, who hosted a friends-and-family event. With 15 investors including Carmen Busquets, Google Japan’s chief marketing officer Miki Iwamura, former Coach executive vice president of global marketing and strategy Stephanie Stahl, former Coca Cola president Jack Stahl, Jefferies & Co. head of strategic investments Vlad Portnoy and former New York Times executive vice president Denise Warren, Flont has raised $2 million.
A software specialist and serial entrepreneur, Kinney has been cited in more than 1,500 patents and has raised about $500 million in capital for various companies in his 25-year career. During an interview with creative director Brooke Magnaghi and adviser Susan Shin last week, Kinney said, “This is my eighth start-up, and they have not all been hits, but I have managed to sell five companies such as NeoVision to public companies (including Oracle, Newscorp and SS&C Technologies among them) in the last 25 years.” Kinney also has invented trading systems that have been used by Fidelity, Merrill Lynch and others.
Most recently, he sold to News Corp. a social network called Network, which is described as a LinkedIn competitor. Network was meant to be used by publishers to create a consortium with leading business publications and all their user profiles who registered. In addition to recommending other articles that might be of interest, Network was designed to analyze interests and match readers with psychographic peers who would in turn suggest other articles from any range of resources. After launching Network in The Wall Street Journal, Rupert Murdoch decided to keep it exclusively to News Corp., he said.
After meeting So 20 years ago, he helped her raise money and form a partnership with Compagnie Financiere Richemont, which requested that Kinney serve as Mimi So’s president during the three-year venture. “I stopped becoming a software developer to become a jewelry executive. We traveled the world opening stores in Tokyo, Beverly Hills and a big store in New York. The point is that the whole time we have been married I have been very involved with a great New York jewelry brand,” he said. “I’m probably one of the few people who have built commercial technology, software companies and launched start-ups and actually know fine jewelry very well.”
Intrigued by Rent the Runway and the sharing economy, Kinney pointed to NetJets and the Steve Case-acquired Exclusive Resorts as examples of how it has been around for a while. “Sharing and luxury go way back but no one had done it with jewelry,” he said. “Carmen pointed out that we’re really bringing fair trade to jewelry designers.”
With an increasing number of retailers only taking high-end jewelry on consignment, small brands wind up financing the raw materials, production, wholesale and now the retail, he said. Flont buys from one-third of the jewelry outright from the participating designers, pays them a monthly lease sum for the remaining items and monthly revenue share without any added costs of shipping or maintenance. An on-site workshop is used to keep everything polished up and to ensure that the diamonds weren’t switched, “which can happen,” Kinney said.
Pamela Love, Deborah Pagani, Carla Amorim, Paige Novick, Crow’s Nest and Audrey Savransky are some of the 12 designers who have so far agreed to multiyear exclusive deals. Knowing that many shoppers take advantage of luxury stores’ one-year return policy by wearing and later returning their high-end purchases, Flont aims to help its resources avoid that problem altogether.
“As an editor covering jewelry for 18 years, I became very close with the designers, and any company that is going to support them is something that I am completely on board with. Having gone to couture the past few years and have talked to so many designers that have just been suffering because they can’t grow their businesses, they can barely make it in a memo economy. For me, this is a real game-changer for designers and consumers too,” Magnaghi said.
In addition to Magnaghi’s exclusive selections, Jill Heller has chosen signed vintage jewelry from brands such as Cartier, Van Cleef & Arpels, Hermes and others.
Flont members pay $249 each month and can rent up to $60,000 worth of jewelry a year. If a member chooses to buy an item, they can do so with a 15 percent discount. For example, if a $6,000 necklace is borrowed three times by Flont members and bought by a fourth borrower, the designer who made the necklace will receive three months of lease payments, as well as the full price, with Flont covering the 15 percent discount, Kinney said.
Men comprise one-third of the current base through gift card purchases, which allow recipients to borrow up to three pieces of jewelry in the next year. “Mothers are buying it for their daughters, playboys getting them for their girlfriends…,” he said. “So there are members, gift cards or if people simply want jewelry for an event, they can rent it – insured, FedEx is covered.”
With 40 members after a month, only 60 more or so are needed for Flont to break even, Kinney said. So far, 10 percent of members have wound up buying items, but not necessarily what they borrowed, a trend Flont executives refer to as “wrist retailing.”
Flont plans to partner with New York City hotel concierges as well as Trisha Gregory’s and Alexandra Lind Rose’s Armarium, another Busquets-supported e-sharing business. Aside from not feeling pressured to make an in-store decision, Flont members like being able to get feedback about their borrowed jewelry from friends. “We like to say, ‘Discover it, borrow it, keep it, love it,’” Shin said.
Through another element of its business, Flont is offering a software package to other global brands that want to open their own sharing service complete with customized insurance that Kinney developed with a multibillion-dollar insurance company that executives declined to identify. A few pilot programs have already been developed for companies that he declined to name that are waiting to see Flont’s own data before launching their own sharing services. Companies also have the option to use Flont’s services.
“We’re already in discussions with most of the major super global brands,” said Kinney.