Moda Operandi: $130 million in total VC funding (but still not profitable).
BoF dropped (yet) another 1,800 word opus last week on a certified BoF darling, Moda Operandi. We’ve distilled it down to the best bits to get you the quick and tidy update on the brand that you’re looking for. (596 words.)
NEW YORK — BoF dropped (yet) another 1,800 word opus last week on a rubber stamped BoF darling, Moda Operandi. We’ve distilled it down to the best bits to get you the quick and tidy update on the brand that you’re looking for.
The Moda Operandi business as it stands today:
No, they’re still not profitable: “To date, Moda Operandi has raised over $130 million from a range of investors, including a $60 million Series E in 2015, but has yet to cross over into profitability.” ETA to profitability: 2019.
But the average customer spend is pretty damn impressive: Average order: $1,400., with most customers returning to order seven times a year. “(By comparison, average order value at Net-a-Porter in 2016 was €334, or about $356).”
And they’re showing good growth numbers: “Sales grew 54 percent from a previously reported $69 million in 2015 (putting turnover for last year at about $106 million).”
2013 and 2014 were years of big changes:
- “[F]ive high-profile personnel in 2013 and 2014 [parted ways with the company], including Magnusdottir, the company’s co-founder and former chief executive, and creative director Taylor Tomasi Hill.”
- CEO Deborah Nicodemus was also hired in 2014, and she promptly ushered in some serious changes (for the better): “she hired a merchandising and planning team” — true specialists, not shoehorning editors into these jobs. “Nicodemus also decided that in order to keep scaling the business, Moda Operandi needed to double down on its distinctive product assortment — namely, “occasion wear,” which has the highest average order value in ready-to-wear, and service. Moda Operandi’s team of stylists has grown from 3 to 28 since Nicodemus arrived, and the goal is to reach 80 by 2020. (The company currently employs a total of 172 people).”
Very smart: M.O.’s using their showroom to deepen customer relationships — not merely as a singular point of sale: “’We knew that we wanted to have a more high-touch experience, and the only way to really do that is to have a showroom,’ [Nicodemus said]. Instead of using it as a customer acquisition tool, the company focused only on deepening relationships with its existing client base through a highly personalised experience — and saw an immediate response from clients.”
They’re also using data brilliantly — and for a true purpose: “But the interplay between Moda Operandi’s trunk shows and its traditional e-commerce business is much deeper. Indeed, the company uses data from its pre-orders to help inform its inventory buys. In January 2016, Nicodemus began experimenting with ways to ‘migrate the philosophy of pre-order from trunk show into boutique’ — meaning that two months before inventory orders arrive at the warehouse, customers can start pre-ordering those pieces, too. ‘Not only did it drive additional sales… it reinforced our understanding of what the client was interested in so we could reorder immediately.’ This shift, along with a redesign of the site’s top navigation, boosted the conversion rate by 30 percent. In 2017, Moda Operandi plans to further evolve its website navigation to integrate trunk show product with its in-season offering, allowing users to filter by category and delivery date.”
Their new accessories (mostly jewelry) arm is doing very well: “grown 70 percent year-over-year.”
More international showrooms are on the way: Total count: “about 20 global locations”. The next wave is coming first in Dubai, likely by the fall “where the company is already building out a team of stylists and managers”, and then it’s “Hong Kong (or Singapore) and Seoul in Asia; Miami, Dallas, Los Angeles and Vancouver in North America; and Paris and Geneva in Europe.”