Traditionally, luxury fashion stayed away from Web-based sales because of its desire to cater to the ultra-wealthy who were more likely to spend their dollars at high-end shops. The fashion startup scene, however, has changed that notion and started catering to the tech-savvy wealthy who want to turn to the Web.
Whether it’s renting high fashion like Rent the Runway, or regular, customized clothes like Le Tote, fashion startups are experiencing financial success. This continues with another company, Moda Operandi, which looks to take the typically for-your-eyes-only trunk show online and make high-end purchases less exclusive. This company got another major boost with a $60 million Series E round, as it looks to expand its online, mobile and analytic presence, according to The Wall Street Journal.
Moda Operandi was founded back in 2010 as a way to connect high-end retailers with customers by showing new lines that haven’t been shipped yet. An entire line of clothing is offered up to one hour before a fashion show by brands like Neiman Marcus, or any of the other 250 brands Moda works with. Consumers can choose to purchase the item with a 50 percent deposit on the spot, and receive the clothing in about five months, about the same time that high-end stores receive their new shipments.
Moda has so far been successful in what can be a very risky market, according to Barbara Wyckoff, managing director of specialty retail and apparel at CLSA Americas LLC, citing high return rates, and how luxury goods do better in physical outlets because it’s all in the detail. Moda, however, emphasizes their feature that allows stylists to help design custom fashion apparel for customers, minimizing return rates.
In 2014, Moda raised $50 million in revenue, a 70 percent increase from the year before, with very little advertising. With a 58 percent profit margin, it drew the eye of Fidelity Investments, which led the Series E fundraising round that values the company at $330 million, a 90 percent increase from their previous valuation last year. The funds, according to the company, will be used to add richer website content, further develop its iOS and Android apps, as well as improve its data algorithms to ensure the best fashion customization possible.