Direct-to-consumer luxury footwear brand Tamara Mellon on Monday revealed a $24 million Series B round of financing led by existing investor New Enterprise Associates, with participation from Quadrille Capital, a new investor. The Series B round brings to $37 million the total amount of capital raised by the brand.
Mellon and cofounder and chief executive officer Jill Layfield credited the company’s disruptive business model and strong performance for attracting interest from investors. “The business tripled in the first half of 2018 versus the first half of 2017, is largely mobile, and has a fiercely loyal customer base and social following,” Layfield said, adding, “We set out to raise $15 million. Because of the repeat data we’re seeing from customers we acquired, we had people sort of lining up and wanting to get behind us.
“We had planned to double the business this year and once we had the capital committed for the round, we started to invest very quickly,” Layfield said. “It’s given us more leeway and more capital to chase after growth. We’ve been very pleased. The business in the first half is above what we envisioned so far.
“This is absolutely the right time for direct-to-consumer,” she added. “We were appropriately aggressive and also paranoid about what could go wrong. We have a great team, a great market opportunity and the marketing is resonating with the customer. It’s an incredible growth story and we see the numbers lining behind that. Everything’s come together.”
Mellon’s previous business that mixed wholesale and online didn’t gel, despite the $24 million she raised in 2013 to launch the namesake brand, which went bankrupt two years later. She subsequently raised $12 million in a Series A funding for the current pure-play venture.
The Series B funding will also be used to build the team. Before the funding round, the company had 18 employees, including the two founders. Layfield said Tamara Mellon will end the year with 30 employees.
A new office was also on the list since the company’s staff was working in cramped quarters. “We now have a beautiful design space and a beautiful showroom where we’re taking appointments,” Tamara Mellon said. “We started last week inviting stylists and editors to come in and pull product. The showroom will help with brand awareness since we’ll dress actresses.”
Mellon’s vocal support of women’s empowerment has endeared the brand to consumers, Layfield said. “We’re talking to our customers in a much more transparent way,” she added. “We’re living in the age of transparency. Traditional luxury marketing is about being opaque and disconnected from the consumer. Twenty years ago, the focus was only on the product. Today’s consumer still wants craftsmanship, authenticity and design, but she also wants to know what you stand for. That’s ultimately what’s driving this.”
With 50 percent of its revenue and 80 percent of its traffic coming from mobile, there will be continued investment in the experience, which is Mellon’s core competency. “Once we achieve that, we’ll look to open our own stores off-line, the right partnership, maybe pop-ins and limited distribution,” Layfield said. “We pay a lot of attention to what other brands do and they’re marrying the best of online and off-line experiences.”
Given the enthusiastic response from investors, Layfield gave her assessment of a possible initial public offering in the future. “What we say is, that if we create value for our customers — and we understand her deeply, her needs and wants — and innovate on her behalf with the best quality products, then we’ll create value for our investors and employees in the form of IPO or acquisition,” she said, adding, “Yes, hopefully down the road.…Would it be amazing to be part of a portfolio of brands? Possibly. Would if be amazing to do an IPO? Yes.”