DEFYING DOT-COM GRAVITY
Byline: Peter Braunstein
NEW YORK — Earthshaking news in the dot-com world: A small-scale fashion pure-play says it has broken even on an operating basis for 2000 — and it did so by building some serious sales momentum, rather than simply slashing spending.
In a valley of dead dot-coms, where publicly held pure-plays are in danger of being booted from the Nasdaq, and “leaner, meaner” post-shakeout dot-coms are struggling to stay in business, indie e-tailer Girlshop.com posted a 167 percent sales increase in March versus same-month sales in 2000.
The insurgent e-tailer — with no venture capital behind it and a mere 14 employees — boasted gross sales of $243,000 in March versus $91,000 in March 2000, according to the privately held firm based here. Gross sales for the first quarter ended March 31, grew 104 percent, to $657,000 from $322,000, a year ago. Traffic has also climbed notably, from 225,000 user sessions in March 2000 (an average of 7,500 a day) to 370,000 last month (averaging 12,000 a day). User session time has remained unchanged at roughly 8-9 minutes.
“Girlshop started as a cult thing, attracting people who would never go to Wal-Mart, but now it’s getting mainstream,” Laura Eisman, president of the self-financed firm, told WWD. “We have an extremely loyal customer base, and have made a major branding effort that’s paying off. People are willing to pay more for clothing by hip, emerging designers.” Indeed, Girlshop is projecting $4 million in gross sales for 2001, up from $1.6 million in 2000.
Yet for all its growth, Girlshop is not expecting to attract venture capital.
“None of us are from the VC community, we don’t have those kind of connections, so we’re no longer concentrating on getting funding,” Eisman explained. “Instead, we’re concentrating on our operational, and on being financially self-sufficient.” Eisman admitted, however, that Girlshop had contracted a chief financial officer last year with the object of attracting investors, but no longer has a person in that post, due to its scaled-down expectations of attracting funding. Eisman had no theories as to why male-run fashion e-tailers that continue to lose money, like Bluefly, Ashford, and Fashionmall have attracted outside funding, while GirlShop, run by a woman, has yet to attract outside investors.
Geographically, Girlshop.com is decidedly bi-coastal: 20 percent of orders come from California, another 20 percent from New York, with the rest of its customer base being dispersed nationally over many states. “We have a big following on the West Coast — L.A. girls love us,” said Eisman. “But we hit everywhere.” Girlshop’s fashion-forward inventory, which is generally overhauled every six weeks, Eisman added, appeals to Web customers nationwide who otherwise would never have access to Swarovski crystal-studded feathered thong clips, glam rock joggers, motorcycle T-shirts, or Femme Arsenal “Funk in the Trunk” cosmetic kits.
In the absence of outside financial backers, Girlshop.com has taken up a guerrilla approach to marketing — they don’t spend a dime on paid advertising. “Product placement is a huge part of our business model,” said Eisman. “We get a lot of free placement, generally in about five magazines a month.” In recent months, for example, Girlshop has been mentioned or featured in Time Out New York, VIBE, Cosmopolitan, Jane, and US Weekly.
The success of Girlshop has spawned two associated e-commerce ventures, Guyshop.com and Totshop.com, but the two offshoots thus far only account for 10 percent of total revenue. “Girlshop is the monster in the group,” said Eisman. “But the two other sites are growing, too.”