Thakoon Panichgul, designer of his eponymous line Thakoon, made the leap to a direct-to-consumer business model in September. The bet aligning his collections with an in-season schedule would mean to get new items to customers faster. As soon as they saw his new designs on the runway, they could shop them at Thakoon stores and on the brand’s website. The wholesale middleman was cut out entirely.
Turns out, he might have moved too fast.
On Monday, Thakoon’s investor, Hong-Kong based Bright Fame Fashion, released a statement announcing that both companies had put the business on “pause” to reorganize, Business of Fashion reported.
“We have recognized that the business model is ahead of the current retail environment,” said a Bright Fame Fashion spokesperson in a statement. “Therefore, we are taking a pause and an eventual restructure.”
In response, Panichgul said that he will take the lessons of his stab at a direct-to-consumer, see-now-buy-now business model and apply it to the next evolution of Thakoon. He declined to comment further when contacted.
Right now, the fashion industry is split between brands that are willing to switch their production cycles to match an in-season calendar, rather than one that operates six months ahead of schedule, and those who are not. For more traditional brands, particularly those based in Paris and Milan, it takes a lot to ruffle feathers and impart change. Forward-thinking brands like Burberry, Tommy Hilfiger and Thakoon (which is based in New York) have recognized the gap between when customers are seeing new collections and when they’re actually going on sale, and have decided to do something about it.
While details on the decision to put the business on hold are murky — including when the store and site will close — a failure to launch for Thakoon is a sign that, for all its buzz, see-now-buy-now isn’t viable yet for all brands.
“The consumer audience is there and ready for this see-now-buy-now, buying from the brand, direct experience. Demand is there,” said Elizabeth Stafford, director of business and strategy at digital agency Four32C. “However, the infrastructure and scale are not there. When you take out the middleman and go against the grain, you’re holding all responsibility, so you have to have sophisticated technology and big data to make decisions. That’s a huge challenge for smaller brands.”
Brands like Burberry and Tommy Hilfiger have the resources to do things like overhaul their internal business models and host weekend-long carnival parties surrounding their catwalks, as Hilfiger has done two seasons in a row. Thakoon had to seek an outside partnership to support his restructuring, which was secured when the deal with Bright Fame Fashion was penned. Resting a vision that still hasn’t been tested out at scale in the arms of an outside investor is a risky move for a brand that lacks the size and name recognition of a Burberry.
“It’s extremely hard to disrupt any industry, and fashion is one of the oldest,” said Kimmy Scotti, partner at VC firm 8vc, who was not close to the Thakoon-Bright Fame Fashion deal. “Thakoon adopting a new model is brave, and it takes focus. You can’t change an engine while a car is in motion.”
At the time of the launch of his e-commerce and retail store, Panichgul was bullish on the future of fashion being centered around a direct-to-consumer approach. His restructured business model reflected the belief that designer fashion could, and should, respond and deliver to customers as quickly as a fast-fashion retailer. He also expressed a lack of control over his brand when selling through wholesale partners.
“We are now directly linked to the customer. My designer can come [to the store] and really see what’s working, what’s performing, what’s not performing,” Panichgul told Glossy in August. “It’s closing the gap between design and the customer. With this new model, I’m able to control message, from the runway to in-store to online, and add additional content.”
Stafford said that Thakoon’s experience should serve as a learning experience for brands in similar boats that are looking to rethink their models, rather than a cautionary tale.
“We’re progressing towards this place where luxury designers and brands can have a direct relationship with customers, but it’s going to take time,” she said. “They need to make sure they have the tools and platform in place, and then it’s about paying attention to your customers and reacting in real time.”