The circular economy is under pressure.
The Restory, an early mover in the luxury repair space, faces an uncertain future as demands for profitability mount. The circular fashion start-up’s founding team has resigned, and liquidation is a possibility, said David Perez, cofounder of The Cobblers, which took a 50 percent stake in The Restory in 2022. Services are currently suspended.
“The decision has not been made. Liquidation [of The Restory] is one of the options,” Perez told WWD. The Cobblers, which offers online repair and aftercare services, is in ongoing discussions with potential investors, which may determine the fate of The Restory.
In a joint statement released Feb. 24 on LinkedIn, cofounders Vanessa Jacobs, Thaís Cipolletta Ferreira Alves and Emily Rea said they had stepped down from the company. “We have been incredibly proud to pioneer the aftercare space with our team and firmly believe this is only the start for the aftercare industry,” they wrote, citing a “heart-wrenching” decision.
Perez said that with The Restory, multiple factors led to the troubles, including unit economics and “tension with a group of investors.”
“[The Cobblers] has a very unique setup; we’re a marketplace in the U.S., we have 300 artisans across the U.S. That’s how we’ve managed to scale the business and get the quality and volume. [The Restory] was not organized like that, and they had issues covering costs and scaling up,” he said. The company recently raised $8 million.
The Restory aimed to be “foundation-matching app” for repairs and aftercare services in the words of Jacobs, former chief executive officer of The Restory, who previously spoke with WWD. Using its proprietary tech stack, The Restory funneled production and damage data to the right specialist and into a tailored quote for the client, with repairs performed in as little as an hour to six weeks for bespoke services. To date, the company raised more than $4.5 million, and its offerings attracted a number of fashion partnerships, including with Farfetch and Manolo Blahnik.
However, fashion buy-in does not automatically equate to a stable business.
“During the summer, we received a call from Vanessa [Jacobs]. She reached out in July last year telling us that the business was in a dire situation,” Perez said. “She had only a few days left before shutting down the operations and was already in contact with the insolvency process. She offered us a look at the company and [asked] if we wanted to get involved and take the company out of this situation.”
The Restory’s Jacobs and Rhea declined to comment for this story.
On LinkedIn, Jacobs said she was “informed” The Restory’s staff was being terminated with immediate effect and that a “‘proposed’ liquidator was named.”
Built on Relationships
The Restory was one of few businesses providing luxury repair to a swath of Londoners, and had built up a notable list of brand partners, including Farfetch, Browns, Selfridges, Harvey Nichols and Manolo Blahnik. Farfetch declined to comment for this story.
“We do recommend The Restory, amongst others, but we won’t be doing this while their services are suspended,” said Jodie Blake, head of marketing and communications for Manolo Blahnik, in an email. Manolo is still recommending other repair services in New York City and London.
At Selfridges, repair services have been a hit, said Lucy Willis, who handles communications.
In 2021, the retailer facilitated more than 28,000 repairs for customers. “One of these services, Sneakers ER, has been such a success in London that we’ve opened in Manchester Trafford and will be opening a concession in the Birmingham store too. We’ve worked with Timpson’s in Selfridges London for more than 20 years on shoe and watch repairs, and a Barbour Re-wax service allows customers to take their Barbour jackets to be re-waxed, repaired or altered,” Willis said.
Selfridges’ Repairs Concierge is available at its London store and virtually, where its team of experts aims to provide a one-stop shop for any repair needs (be it shoes, accessories, eyewear or tech).
Repair has made its way onto the runways, too.
Last September, Patrick McDowell worked with The Restory for the restoration of 25 pairs of shoes for McDowell’s “Marie Antoinette Goes to Liverpool” runway show for London Fashion Week. Though the partnership was not recurring, McDowell had nothing but praise for The Restory in an email to WWD, even using the service personally.
“They have a team of fantastic artisans that really know their stuff and work in such a way that respects the value of the product they’re working on,” he wrote. “What they offer is a real game-changer. It’s repair and restoration at a very high level and really enables you to keep your luxury items for life.”
Circular Fashion Chases Profitability
The Restory is not alone in its struggle. Similar to tech and media, fashion’s circular economy darlings have seen layoffs and leaning of operations under a profit-first investor landscape.
Rent the Runway laid off 24 percent of its staff in September to navigate inflation, tightened consumer spending and thus streamline efficiency. In February, The RealReal laid off 7 percent of its workforce (or roughly 230 employees) and closed a handful of neighborhood stores and flagships. A month prior, the company announced John Koryl as new chief executive officer in a bid to help the company streamline. Earlier this week, Poshmark laid off 2 percent (or roughly 16 of its 800 employees). EBay also said it plans to cut 500 jobs, or about 4 percent of its workforce, according to a recent SEC filing.
Fundraising for some sustainability-minded companies may also be getting tougher. Last year, next-gen materials saw “constrained” funding — $523 million shy of 2021’s $980 million — per a recent report from nonprofit the Material Innovation Institute.
Speaking more broadly to the investment landscape, Perez said, “Our confidence is very high. Through time, we have a very good handle on the restoration in the U.S. We’ve proven it. We know how to reach profitability.” With the infusion of $8 million in capital last year, The Cobblers hopes to launch jewelry and watch repairs as it expands both business-to-business and direct-to-consumer operations, though “priorities may change,” Perez said.
Both The Restory and The Cobblers maintain impressive social media followings, but The Cobblers Yelp reviews hover at around two stars for 270 reviews, similar to other circular businesses, including The RealReal, ThredUp and Poshmark.
Today, the repair landscape spans firms such as London-based Sojo and New York-based Alternew, as well as company-owned options like Net-a-porter’s “The Seam.”
Nancy Rhodes, the founder of competitor Alternew, weighed in on The Restory developments. “I love Restory — both as an entrepreneur in the space as well as a customer. The biggest draw for me has always been that voyeuristic approach to watching the care, repair and reimagination of products, bringing them back to life through their content.”
Rhodes, who provides on-demand repairs and alterations through her business, said she plans to take a somewhat cautious approach to fundraising.
“We are treading carefully with the customer and business owners at the forefront of our mission, making sure that potential VC growth expectations don’t supersede the needs of our most important stakeholders; those using our platforms to build their small businesses and those using it to find a way to reconnect with their wardrobe,” said Rhodes.
Rhodes looks to begin with a small friends and family round before approaching a larger seed, and potentially venture capital, by July or August. Reflecting on how The Restory’s story affects the ambitions of competitors, Rhodes said, “They’re not the first unsuccessful company in this space, nor will they be the last.”