A cluster of firms run by these graduates are helping to recreate the traditional fashion industry, as more and more companies move their sales online to take advantage of the current e-commerce boom.
These companies are offering consumers something new – from subscriptions, networking, editorial content and even yoga classes to beef-up sales at bricks-and-mortar stores.
Europe is at the centre of this entrepreneurial movement. Fashion technology firms have found homes in the cities of London and Milan – the traditional fashionista hotspots along with Paris and New York City.
Traditional tech firms would flock to Silicon Valley, but fashion-blended ventures are instead turning to European capitals. About 50 fashion start-ups have been founded in London in the past five years, according to Crunchbase.
The Future Fifty program matches high potential businesses with investors to fast-track growth. The initiative is run by London-based Tech City UK, the fastest growing tech cluster in Europe.
Lyst, a personalized fashion marketplace, and luxury fashion retailer Matchesfashion.com, were among the latest celebrated fifty high-potential technology companies.
While Europe’s venture capital industry has been lagging behind the Bay area, significant investments have been made in fashion tech start-ups, meaning entrepreneurs have been warming to the Continent.
Balderton Capital, a London-based VC firm, has invested about $690 million in fashion start-ups in the past ten years. The fund has pumped sizeable investments into e-commerce-focused fashion groups such as Secret Sales and Girl Meets Dress.
Xavier Rolet, chief executive of London Stock Exchange Group, said that his group’s attempt to simplify access to capital markets is helping Future Fifty companies grow.
It is thought that the UK’s fashion tech firms are aided by proximity to brands clustered in London, Paris and Milan.
Online fashion marketplace Farfetch, which is based in London, raised $66 million in investment earlier this year. The funding round was led by Vitruvian Partners, the European private equity group.
“Farfetch’s ability to serve the luxury consumer is unique. The growth of Farfetch, and the brands and boutiques it serves, has been very impressive as a result,” said Mike Risman, a managing partner of Vitruvian Partners.
It is unclear, however, whether such growth will prove sustainable. There have been fashion flops in the past.
LN-CC, London’s up-market fashion retailer which combined an experiential store with an online business, went into administration in February. Style Passport, the e-commerce fashion retailer started by former Marie Claire fashion editor Sarah Walter, was last year placed in voluntary liquidation.
But there are a troop of MBA up-starters who are hopeful that their businesses will boom, with clever online marketing and innovative ways of upping in-store interest.
Into The Fold
Polly McMaster, co-founder of The Fold, said that the company is all about “understanding the professional woman’s needs in her daily life”.
The London-based fashion community sells women’s-specific clothing that is suitable for the workplace. After studying an MBA program at London Business School, Polly joined forces with classmate Cheryl Mainland. The pair officially launched their fabulous fashion label after graduation.
Polly was inspired to provide suitable work attire for women. “Looking as smart as a man in his bespoke suit gives a woman the same level of confidence and gravitas at work,” she said.
She feels that an MBA program gave them the best chance of success. “What the MBA did was give us the mental space to think creatively and come up with the idea, and also test it in more formalised business way,” Polly said.
The site uses community networking and editorial content to promote its wares. Fold Woman, the company’s editorial section, has profiled a bevy of top businesswomen.
Through a showroom in Clerkenwell, The Fold attracts customers who are keen to sample their collections, and arranges personal appointments with stylists.
Since the company's launch in 2011, The Fold has seen “200-300 per cent” growth year-on-year.
Hot Gossip
Elizabetta Camilleri, chief executive of SalesGossip, may have an MBA degree but it did not make her rise to start-up stardom easy: “It was ten times harder than I ever could have imagined.”
The company provides an online and mobile service that gives users access to fashion and beauty deals. It was founded out of a need – Elizabetta could not find an app that listed all of her favourite stores’ sales. She met her business partner, Emilio Sanz (who also has an MBA), while studying at LBS.
The founders used the business school’s incubator, and Elizabetta thinks that the supportive MBA network was one of the biggest benefits of paying for a business school program.
“An MBA is an amazing luxury; to be able to have such an in-depth overview of what’s happening in the world of business,” she said. “As an entrepreneur, you are in a very weak position. You are no-one. You’re starting from scratch. It’s essential to have a view of everything that can impact your business.”
SalesGossip has over 1,000 fashion and beauty industry partnerships, and works with retail stores and websites including Topshop and Asos.
Since launching the business in July 2011, the company has grown to have more than 500,000 users. In February it raised £600,000 in new funding, led by investors including Andrew Grahame, who co-founded boutique hotel group Mr & Mrs Smith. SalesGossip initially raised £250,000 in an angel round in late 2012, and won a further £25,000 after winning the Royal Bank of Scotland’s EnterprisingU competition.
Elizabetta feels a sense of reward after raising the business from the ground up. “The only thing that gets you through it is perseverance,” she added.
Pulling The Wool Over Your Eyes
Bronwyn Lowenthal, founder of Lowie, has shifted from a fashion wholesaler to an online retailer. “I've had to change the business model a lot,” she said.
The company sells ethical women’s fashion and accessories, specialising in winter hand-knits, and vintage-style clothing. Bronwyn operates a shop front from Herne Hill in southeast London, but has adapted to the retail revolution.
Lowie’s site features a style blog, and the retailer sells a collection of women’s as well as kid’s clothing online.
“Our Lowie brand is almost equally dispersed between web and shop front, although web is especially important at Christmas,” said Bronwyn, who is currently enrolled on Cass Business School’s EMBA program. She added: “Cass is such a prestigious school, and it’s been really helpful and beneficial to me.”
She thinks that fashion customers still love high-street shopping, although the nature of the experience has changed.
“Shops need to provide an 'experience' that makes customers come back for more, and in-store activities and events to coerce customers to physically get to the shop,” she said. “In the autumn we will be introducing yoga and other classes in the evenings.”
Founded in 2002, the brand is worn by style icons including Lily Cole and Fearne Cotton. She was awarded a scholarship to study in London, alongside running the company. “I would’ve got to this stage in the end, but this MBA scholarship opened doors for me, doors that I otherwise would've had to pry open.”
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