As digital advertising costs rise, more fashion companies are newly opening stores to reach customers. And they’re taking innovative approaches that are set to play into the accelerated reshaping of the physical retail landscape, which has been in swing since 2020.
This week’s briefing breaks down four examples, including:
- What Goes Around Comes Around, with its multi-flagship play,
- Soho House, with its service-first approach to retail,
- ReDress, with its rent-a-rack business model, and
- Christian Cowan, with its strict focus on brand-location fit.
- Founder Sophie Hill discusses Thread Styling’s new $12 million funding round, and
- A case for stocking up on white tank tops.
2 flagships within 3 blocks: Inside What Goes Around Comes Around’s bold Soho plan
On Monday, 29-year-old luxury vintage retailer What Goes Around Comes Around sent out an e-vite to industry insiders for a party celebrating the re-opening of its original flagship store, set for April 7.
The store, located on West Broadway in Soho, has been closed for nearly a year, following a sprinkler malfunction within its building causing great damage. Forced to close the store’s doors, founders Seth Weisser and Gerard Maione took the opportunity to perfect its design, with a focus on making it cohesive – in 2003, they took over the neighboring store, eliminating wall dividers but never syncing the space’s looks. The midcentury modern design of the company’s Beverly Hills store, which opened six years ago, has provided inspiration.
While renovations were underway, Weisser and Maione decided to open a pop-up located just three blocks away, on Wooster Street between Spring and Prince Streets. Based on the “incredibly good reaction” they’ve seen, they’ve since decided to make it the brand’s third permanent flagship, said Weisser.
“There’s a different customer on that block,” he said, referring to the Wooster store. “It’s more in the kill zone, in terms of the foot traffic in the neighborhood.”
Comparatively, the original store is “a destination” and also serves as a brand “identity store,” he said.
The stores will be merchandised differently, with the Wooster store serving as a more direct response to the recent resale boom; it will sell pre-owned styles from the last 10-15 years. Meanwhile, the West Broadway store will more closely align with the retailer’s reputation as a source for true vintage, specializing in styles from the ’80s and ’90s.
Weisser said that buying products from sellers, versus reselling items via a consignment model, is a key differentiator for What Goes Around Comes Around amid the recent crowding in the pre-owned market. He said he’s focused on keeping the company’s sellers and shoppers, versus losing them to new competitors. And competition is heating up.
He acknowledged that other resale companies are “highly funded,” while What Goes Around Comes Around hasn’t taken on outside investment. But taking on funding is now a consideration, as the aim is to continue expanding the business, he said.
What Goes Around Comes Around is also unique in that its e-commerce site drives the smallest percentage of its sales. Its stores drive more sales, and its wholesale channel drives even more. It quietly sells vintage styles through 20 retailers, including Kith, Goop, Shopbop and even Dillard’s.
“You wouldn’t expect luxury to work in Tuscaloosa, Alabama, but the woman shopping at the local Dillard’s wants to buy a Louis Vuitton bag just like the woman in Soho does,” Weisser said.
And that’s especially true since the start of the pandemic. More consumers are thinking of luxury fashion pieces as collectible investments – a concept luxury brands have recently been driving home by drastically raising prices.
“Secondary market prices reflect price increases [in the primary market],” Weisser said. “In the last 2-3 years, everything in the Chanel vintage catalog has about doubled in price. We were charging $7,000 for a Chanel jumbo classic [handbag], and we’re now charging $9,000-$10,000.”
And at the same time, luxury shoppers have increasingly turned to resale. “In the last two years, they couldn’t get to a Chanel store or a Gucci store as much as they used to,” he said.
Inside Soho House’s service-first retail play
As brands increasingly embark on a mission to become “a full lifestyle brand,” Soho House is decidedly leading the pack. Building on its retail offerings of home furnishings and natural beauty products, it debuted skin-care brand Soho Skin this month.
In terms of catering to more aspects of its 118,000 members’ lives, the skin-care venture builds on Soho House’s notorious clubs – located in Europe, North America and Asia – as well as its restaurants, cinemas, workspaces, spas and hotels. And fashion may soon be on the horizon, said Aalish Yorke-Long, managing director of retail at Soho House.
“It all starts with the members and considering how they live. So if members ask us for fashion, maybe we’ll launch fashion,” she said, adding, “And maybe next year.”
Soho Skin’s 11 products exclusively launched to Soho House members via its “bedrooms,” or hotels, three weeks ago. Members can now provide feedback on the products through provided QR codes. In June, the products will be at the center of treatments offered by Soho House health clubs and made available for members to purchase. Finally, come September, the products will be rolled out to the public via SohoSkin.com, as well as strategic retail partners.
For its part, Soho Home, launched six years ago, is now available at Net-a-Porter and Selfridges, among other retailers. And, having gone “from strength to strength,” according to Yorke-Long, the brand opened its first store, in NYC’s Meatpacking District, in November. The plan is to open another Soho Home store in L.A. by the end of the year.
Soho Skin was a “lockdown baby,” Yorke-Long said, noting the “extreme” impact of the pandemic on Soho House as a whole. “All of the houses were shut,” she said. “So we [shifted our focus] to making all the experiences we provide bigger and better for our members when they returned.”
In step, Soho House became a digital brand, she said, noting its addition of online services like livestreams of its health club classes.
Yorke-Long declined to share the portion of the business that product sales make up, only stating that “lockdown was kind to retail” and that retail has outpaced its ambitions in the last two years.
“Because it’s science-led,” Soho Skin’s development was made possible through an outside partner, Yorke-Long said, though declined to elaborate. As the brand grows, however, the plan is to conduct all operations in-house, as is the case with Soho Home.
Soho Skin’s tagline is “Intelligent skincare for modern living,” a nod to its streamlined assortment made with its members’ busy lives in mind. Through surveys, focus groups and testing panels, among other means, members were involved throughout Soho Skin’s 12-month development process.
Also based on member feedback, the brand has a ”strong pipeline of products” set to release in the next 12 months, Yorke-Long said. And, through its Soho Chance program, a member is creating a range of supplements that will be released under the Soho Skin label.
“Influencer is a dirty word at Soho House,” Yorke-Long said, but noted that the company often collaborates with its members, offering them a platform for their work.
Though retail is clearly an increasing focus for the company, don’t expect Soho Houses to evolve into stores. “The most nuanced part of my job, and my biggest responsibility, is to not make people feel like they’re in a shopping hub. We don’t want to shove things down their throat,” said Yorke-Long. “[Our products] are meant to enhance our members’ experience.”
Emerging business model: Rent-a-rack comes to resale
The current acceleration of all things digital notwithstanding, a new, analog take on the resale store is arguably among the most innovative retail concepts to sprout up in recent years. Best described as the rent-a-rack business model, it has legs because of – not despite – its simplicity.
Born in November in Los Angeles, ReDress introduced the concept to the states, though it’s been thriving in founder Kati Kanerva’s home country of Finland for decades, she said. In short, anyone wanting to sell items from their closet can rent one of the store’s 50 racks for $99 for one week or $149 for two weeks. They can then fill it with up to 50 clothing styles and five accessories, restocking it as items sell in the rental period and tracking sales through the company’s online booking system. At the same time, they can avoid the learning curve of uploading styles to a Poshmark, for example. Sellers pick the price, though ReDress offers best practices, and the company takes a 15% cut of each sale.
Kanerva said ReDress sells styles from brands from Zara to Prada. The company has gotten the word out largely through Instagram ads, plus its location in L.A.’s bustling Atwater Village neighborhood – a popular shopping district that hosts a farmer’s market – has worked to bring in ample foot traffic. ReDress has made a practice of reaching out to “important influencers” and stylists who have “a lot of stuff” since before its launch, Kanerva said. In doing so, it’s consistently filled its racks; it currently has a two-month waitlist, with most sellers opting for the two-week rental option – a month is the maximum rack rental period.
Sellers typically post about their rack on Instagram, while stating their assigned rack number. ReDress, too, spotlights racks via its Instagram account, which has 4,300 followers. Within the account’s highlights is a “Vendors” spotlight calling out impressive earnings to date. For example, one included image of a seller is captioned, “Christina made $1,325 in two weeks!”
Altogether, Instagram’s worked to bring in shoppers from far beyond L.A.’s city limits, Kanerva said. And, considering demand, she plans to open a second ReDress store in L.A. by the end of the year. Taking the concept to other cities is a longer-term goal.
While digital resale platforms have gone to great lengths to offer sellers a turnkey route to offloading their clothes, this new IRL concept offers a more comfortable option to those still less than digital-savvy. Bonus: Unlike other physical resale options, the model doesn’t involve a strict evaluation of a seller’s items, with ReDress only vetoing items in poor condition. In other words: There’s little chance that styles will be declined by a snooty store associate. We’ve all been there, no?
Christian Cowan achieves brand-location fit with first store
Tonight, British fashion designer Christian Cowan is hosting a grand opening event for his brand’s first retail store, in NYC’s Soho neighborhood. For the 5-year-old brand, taking the leap to physical retail was all about location, location, “once-in-a-lifetime” location, according to Cowan.
He described his brand as being “built on glam nightlife” while noting the alignment with the backstory of the space.
“[The store] has its own glamorous history,” he said, going on to share that it housed Grace Jones’s La Vie en Rose restaurant in the mid-1980s. It was also formerly an art space frequented by the likes of Andy Warhol, Keith Haring, Jean-Michel Basquiat and Julian Schnabel. And Yoko Ono once borrowed the space to stage an exhibition of John Lennon’s artwork.
“It remained empty for five years before we were allowed to take it over,” he said. ”It’s a fantasy fulfilled.”
As “a Christian Cowan look isn’t complete without a full face of glam,” Smashbox beauty stations stocked with products are set up throughout the store, he said. What’s more, Smashbox Pro Artists will be on hand to offer consultations and product testing.
4 questions: Founder Sophie Hill on Threads Styling’s new funding round
On Monday, 13-year-old chat-based shopping platform Threads Styling, based in the U.K., announced a $12 million funding round. The round was led by existing investors, including Highland Europe and C Ventures. And it plays into a dual-raising strategy, which permits Threads customers to invest in the company through crowdfunding platform Crowdcube.
With the new capital, the company aims to expand its service channels beyond DMs and chat, to include an e-commerce site and Live Shopping events. Threads is reportedly not yet profitable, and its 2021 revenue was around $60 million.
In an interview on Wednesday, founder and CEO Sophie Hill shared more on the news.
What is the breakdown of your shopper base, and what’s resonating with them now?
“Regionally, we have a strong customer base in Europe and the Middle East, and the U.S. and APAC are fast-growing markets. Plus, 80% of Threads customers are Gen Z or Millennials. They’re really interested in the hot, must-have styles of the season, but we’re also seeing an increasing trend toward more rare, bespoke and personalized pieces.”
What drove the e-commerce launch?
“[Providing] Inspiration and personalized service are at the heart of Threads’ unique approach, which we’ve built on social and chat commerce. And by integrating the same creativity, service and technology into our new e-commerce platform, we think we can both stay true to our DNA and drive growth. We want our customer to know she can shop [on whatever platform] suits her needs at that moment. And we’ll continue to evolve and expand in ways that allow us to serve our customers best.
Part of our success has been attracting and retaining some of the best personal shopping talent in the industry. And this team’s ability to service our customers at scale will only grow as our e-commerce platform supports a range of chat-based and other customer journeys.”
What’s unique about how you’re catering to high-spend customers?
“We are proud to do whatever it takes to track down what our clients want. We’ve even persuaded a museum to sell a pair of vintage Saint Laurent boots from its archive that just happened to be the right size for our client.”
What motivated the crowdfunding campaign?
“Because the Threads community is highly engaged and their input so valued, it made sense to invite them to invest and to share in our growth. We see crowdfunding as a natural next step.”
Trendspotting: The plain white tank is having a moment
Whether it’s the Tommy Lee effect or just another example of consumers’ pandemic-driven prioritization of fashion classics, the plain white tank is having a moment. Brands including Bottega Veneta, Prada, Chloe and Bevza showed the style on their fall 2022 runways. And, according to Brieana Clay, creative growth manager at tech platform Narrativ, a $6 version from Target is currently an “extremely popular” affiliate commission driver among its creator community. Influencer Courtney Grow (63,000 followers), who regularly posts style steals, has generated a majority of the sales.
Inside our coverage
Kanye “Ye” West has been dropped by the Grammys, but not Gap. The discrepancy is simple, according to Danny Parisi: He makes the apparel company a lot of money – so much so that it may be able to overlook his recent, controversial social posting spree. He’s certainly influential. According to U.K. fast-fashion retailer Boohoo, after West wore a balaclava face covering to Paris Fashion Week in February, there was a 6,900% increase in searches for “balaclava” on the company’s online store in 24 hours.
Supply chain obstacles are only getting worse. That’s according to Deepa Gandhi and Melissa Mash, founders of DTC accessories brand Dagne Dover. “We’ve had to place our orders months ahead of normal, to ensure that we have product when we need it and that we stay in stock,” Gandhi said. “And things are only getting longer, they’re not getting shorter.… [Products] are taking anywhere from two to three to six months to arrive from a port, when it used to take one to two months, max.”