Billionaire clothing dynasty heiress launches Everybody & Everyone to make fashion sustainable

Veronica Chou’s family has made its fortune at the forefront of the fast fashion business through investments in companies like Michael Kors and Tommy Hilfiger . But now, the heiress to an estimated $2.1 billion fortune is launching her own company, Everybody & Everyone, to prove that the fashion industry can be both environmentally sustainable and profitable.

There’s no argument about the negative impacts of the fashion industry on the environment.

The textiles industry primarily uses non-renewable resources — on the order of 98 million tons per year. That includes the oil to make synthetic fibers, fertilizers to grow cotton, and toxic chemicals to dye, treat, and produce the textiles used to make clothes. The greenhouse gas footprint from textiles production was roughly 1.2 billion tons of CO2 equivalent in 2015 — more than all international flights and maritime shipments combined (and a lot of those maritime shipments and international flights were hauling clothes).

The litany of catastrophes that can be attributed to the clothing industry extends to pollution as well. About 20% of industrial water pollution globally can be traced to the dyeing and treatment of textiles — and microplastics from polyester, acrylic and nylon are polluting the world’s oceans.

Meanwhile, the rise of fast fashion has encouraged consumers to accelerate waste. Roughly one garbage truck full of clothes is landfilled around the world every second, according to a 2017 report from the Ellen MacArthur Foundation. That means consumers are throwing away around $400 billion worth of valuable goods every year as low prices and more “seasons” create an illusion of disposability.

Screen Shot 2019 10 27 at 10.21.17 PM

Image courtesy of World Resources Institute

As the fashion business has expanded so has the wealth of the Chou family. South Ocean Knitters, the knitwear manufacturer started by Chou’s grandfather was responsible for one of the first foreign investments into mainland China in 1974. It is now one of the largest suppliers of knitwear in the world and together with the Hong Kong manufacturer Li & Fung, is behind the Cobalt Fashion Holding, conglomerate.

And her father, Silas Chou, made millions as an investor in Michael Kors and Tommy Hilfiger. As an executive at Iconix Brand Group China, Veronica Chou played a role in the acceleration of the industry — bringing American brands to Chinese consumers. Chou also served as the cofounder of the Beijing-based private equity fund China Consumer Capital and a director of Karl Lagerfeld Greater China.

For Chou, an understanding of the environmental toll that the family business was taking on the planet began six years ago — a few years before Iconix Brand Group acquired the China subsidiary she had co-founded with her father in a transaction reportedly worth $56 million.

It was around the time that Chou had her children, she says, that she realized the importance of making a brand that was both environmentally sustainable and inclusive.

“It was six years ago I started learning about sustainability and five years ago that I said that I needed to have a sustainable brand,” says Chou. 

Since that revelation Chou dove into the world of sustainable manufacturing head-first. Through her family’s investment vehicles she has worked with companies like Modern Meadow, which uses bio-engineering to make leather goods in a lab. Chou has also led investments in Thousand Fell, a soon-to-launch manufacturer of fully recyclable shoes; Dirty Labs, which is developing more sustainable laundry cleaning products; and Carbon Engineering, which is developing a direct air capture technology for carbon dioxide.

Everybody & Everyone applies the lessons that Chou has learned about sustainability to a new fashion brand that she hopes can serve as a model for how to weave sustainability into every facet of the industry.

The new brand, which sells women’s clothes for every size from 00 to 24 and at prices ranging from $18 to $288 (most fall in the $50 to $150 range, given a quick scroll through the company’s new website) partners with companies like Naadam and Ecoalf for sustainable cashmere and recycled fabrics made from plastic.

“For our brand, recycled is a big story for us,” says Chou. “Our t-shirts, our socks, our packaging, our mailers, our labels, our stickers are all made from recycled materials that can be recycled again.”

The company’s attention to its environmental impact also extends to its supply chain. “Most of our fabrics are knit close to where our garments are manufactured. That is definitely reducing our carbon footprint,” says Chou. “I put an emphasis on having factories in America… our denim is manufactured in America and in the future we’re looking at t-shirts and athletics to be manufactured in America.”

Some clothes are also made with fabrics that have recycled silver in them — so that the clothes can be worn multiple times without smelling or the need for a wash. 

Digital printing is used in place of screens to prevent tons of water waste, the company said, and several of the company’s fabrics are not dyed at all. instead, the company relies on an upcycling process by separating recycled fibers mechanically by color.

Everybody & Everyone has also partnered with the organization One Tree Planted to plant a tree for each purchase that’s made with the company. In addition, the company has calculated its carbon footprint from all of its pre-launch activities and has bought and retired offsets to balance its emissions, Chou says.

“I started building Everybody & Everyone from the ground-up, first by getting the best team in place then by finding the right vendors, manufacturers and partners who were already making strides in the sustainability space,” Chou said in a statement. “I wanted this brand to be for every woman, so body positivity, inclusivity and sustainability were going to be the backbone of everything we did. We then constructed the brands sustainable & technical pillars, which consist of activation, recycled, dyeing & printing, naturals done better, bio-based fibers and end use to ensure our products would minimize negative impacts. We are sustainable down to the labels sewn into each garment.”

Source: Nike has picked up Russell Wilson’s Tally/TraceMe in a rare acquisition

Nike has long been synonymous with premium sneakers and other sports gear, but now it seems that the company could be extending its brand into another area — digital media — thanks to the rumored acquisition of a Seattle-based startup.

TechCrunch has learned from a source that the multibillion-dollar sports giant has acquired TraceMe, which originally built an app to let fans engage with sports stars and other celebrities before later pivoting into a service called Tally, a platform aimed at sports teams, broadcasters and venues to help fans engage around sporting events.

TraceMe was originally founded by Russell Wilson, the champion quarterback of the Seattle Seahawks, who was the executive chairman of the startup. The company had raised at least $9 million from investors that included the Seattle-based Madrona Venture Group and Bezos Expeditions (Amazon CEO Jeff Bezos’ fund), as well as YouTube co-founder Chad Hurley and others, and it was last valued, in 2017, at $60 million.

Our source said the deal closed in recent weeks and that “it was a good outcome” for the company and investors. It involved both IP — the main interest, the source said, was in TraceMe’s tech rather than Tally’s — and the team.

Indeed, at least eight of them, including TraceMe’s CEO Jason LeeKeenan, an ex-Hulu executive, are now listing Nike as their place of employment. LeeKeenan describes his new role as the head of Nike Seattle. Others on the team now have taken roles that include software engineers, head of product and product designers.

No one at TraceMe and Nike that we contacted has responded to our requests for comment, but just a little while ago GeekWire (which likely had the same tip we did) published a post noting that it had a source that confirmed the deal.

The athletic footwear giant Nike is no stranger to the world of technology: it has been a longtime collaborator with the likes of Apple to develop apps for its devices and has been an early mover on the concept of bringing and integrating cutting-edge (yes, possibly gimmicky) tech into its footwear and other gear. And that’s before you consider Nike as an e-commerce force.

But while the dalliance between sports, tech and fashion is well established, this deal opens up a different frontier for the company. It’s very rare for Nike to make an acquisition, but it makes sense that if it were going to do some M&A, it would be in the area of digital media and picking up engineers to execute on a wider vision in that area.

The company is best known, of course, for its shoes and related sporty clothes, which it has for a long time created in co-branding with the biggest sports stars and has more recently started to extend to a wider circle of celebrities and hot brands in a spirit of sporty street style. These have included the likes of so-cool Supreme, Travis Scott and seemingly tentative forays into music culture.

Nike overshadows all other sports shoe brands in size, with its current market cap at nearly $117 billion, more than twice that of its closest competitor, Adidas . But Adidas has been stealing a march when it comes to partnerships with a wide network of celebrities (even if Drake prefers checks over stripes).

While it isn’t clear yet how and if Nike will be using the startup’s existing services, you could see how a deal like this could help Nike start to think about how it might leverage the collaborations and endorsements it already has in place into experiences beyond shoes, advertising and athletic performance. In this age of Instagram and influencers playing a massive role in shifting consumer sentiment (and dollars), this could give Nike a shot at building its own media platform, independent of these, on its own terms.

This is a bigger trend that we’re seeing across a lot of digital media. Consider how companies like Spotify have extended beyond simple music streaming, investing in building tools to help artists on its platform with marketing and expanding their brands: selling shoes means selling a concept, and that concept needs to have a foothold in a digital experience. 

Google brings its Jacquard wearables tech to Levi’s Trucker Jacket

Back in 2015, Google’s ATAP team demoed a new kind of wearable tech at Google I/O that used functional fabrics and conductive yarns to allow you to interact with your clothing and, by extension, the phone in your pocket. The company then released a jacket with Levi’s in 2017, but that was expensive, at $350, and never really quite caught on. Now, however, Jacquard is back. A few weeks ago, Saint Laurent launched a backpack with Jacquard support, but at $1,000, that was very much a luxury product. Today, however, Google and Levi’s are announcing their latest collaboration: Jacquard-enabled versions of Levi’s Trucker Jacket.

These jackets, which will come in different styles, including the Classic Trucker and the Sherpa Trucker, and in men’s and women’s versions, will retail for $198 for the Classic Trucker and $248 for the Sherpa Trucker. In addition to the U.S., it’ll be available in Australia, France, Germany, Italy, Japan and the U.K.

The idea here is simple and hasn’t changed since the original launch: a dongle in your jacket’s cuff connects to conductive yarns in your jacket. You can then swipe over your cuff, tap it or hold your hand over it to issue commands to your phone. You use the Jacquard phone app for iOS or Android to set up what each gesture does, with commands ranging from saving your location to bringing up the Google Assistant in your headphones, from skipping to the next song to controlling your camera for selfies or simply counting things during the day, like the coffees you drink on the go. If you have Bose noise-canceling headphones, the app also lets you set a gesture to turn your noise cancellation on or off. In total, there are currently 19 abilities available, and the dongle also includes a vibration motor for notifications.

2019 09 30 0946 1

What’s maybe most important, though, is that this (re-)launch sets up Jacquard as a more modular technology that Google and its partners hope will take it from a bit of a gimmick to something you’ll see in more places over the next few months and years.

“Since we launched the first product with Levi’s at the end of 2017, we were focused on trying to understand and working really hard on how we can take the technology from a single product […] to create a real technology platform that can be used by multiple brands and by multiple collaborators,” Ivan Poupyrev, the head of Jacquard by Google told me. He noted that the idea behind projects like Jacquard is to take things we use every day, like backpacks, jackets and shoes, and make them better with technology. He argued that, for the most part, technology hasn’t really been added to these things that we use every day. He wants to work with companies like Levi’s to “give people the opportunity to create new digital touchpoints to their digital life through things they already have and own and use every day.”

What’s also important about Jacquard 2.0 is that you can take the dongle from garment to garment. For the original jacket, the dongle only worked with this one specific type of jacket; now, you’ll be able to take it with you and use it in other wearables as well. The dongle, too, is significantly smaller and more powerful. It also now has more memory to support multiple products. Yet, in my own testing, its battery still lasts for a few days of occasional use, with plenty of standby time.

jacquard dongle

Poupyrev also noted that the team focused on reducing cost, “in order to bring the technology into a price range where it’s more attractive to consumers.” The team also made lots of changes to the software that runs on the device and, more importantly, in the cloud to allow it to configure itself for every product it’s being used in and to make it easier for the team to add new functionality over time (when was the last time your jacket got a software upgrade?).

He actually hopes that over time, people will forget that Google was involved in this. He wants the technology to fade into the background. Levi’s, on the other hand, obviously hopes that this technology will enable it to reach a new market. The 2017 version only included the Levi’s Commuter Trucker Jacket. Now, the company is going broader with different styles.

“We had gone out with a really sharp focus on trying to adapt the technology to meet the needs of our commuter customer, which a collection of Levi’s focused on urban cyclists,” Paul Dillinger, the VP of Global Product Innovation at Levi’s, told me when I asked him about the company’s original efforts around Jacquard. But there was a lot of interest beyond that community, he said, yet the built-in features were very much meant to serve the needs of this specific audience and not necessarily relevant to the lifestyles of other users. The jackets, of course, were also pretty expensive. “There was an appetite for the technology to do more and be more accessible,” he said — and the results of that work are these new jackets.

IMG 20190930 102524

Dillinger also noted that this changes the relationship his company has with the consumer, because Levi’s can now upgrade the technology in your jacket after you bought it. “This is a really new experience,” he said. “And it’s a completely different approach to fashion. The normal fashion promise from other companies really is that we promise that in six months, we’re going to try to sell you something else. Levi’s prides itself on creating enduring, lasting value in style and we are able to actually improve the value of the garment that was already in the consumer’s closet.”

I spent about a week with the Sherpa jacket before today’s launch. It does exactly what it promises to do. Pairing my phone and jacket took less than a minute and the connection between the two has been perfectly stable. The gesture recognition worked very well — maybe better than I expected. What it can do, it does well, and I appreciate that the team kept the functionality pretty narrow.

Whether Jacquard is for you may depend on your lifestyle, though. I think the ideal user is somebody who is out and about a lot, wearing headphones, given that music controls are one of the main features here. But you don’t have to be wearing headphones to get value out of Jacquard. I almost never wear headphones in public, but I used it to quickly tag where I parked my car, for example, and when I used it with headphones, I found using my jacket’s cuffs easier to forward to the next song than doing the same on my headphones. Your mileage may vary, of course, and while I like the idea of using this kind of tech so you need to take out your phone less often, I wonder if that ship hasn’t sailed at this point — and whether the controls on your headphones can’t do most of the things Jacquard can. Google surely wants Jacquard to be more than a gimmick, but at this stage, it kind of still is.

IMG 20190930 104137IMG 20190930 104137

Syte snaps up $21.5M for its smartphone-based visual search engine for e-commerce

Visual search has become a key component for how people discover products when buying online: If a person doesn’t know the exact name of what he or she wants, or what they want is not available, it can be an indispensable tool for connecting them with things they might want to buy.

Now, one of the companies building technology to do this has raised a round of funding to expand its business further into the U.S., and not just across digital platforms, but to tap further into the opportunities of bringing visual search into the world of physical commerce, too, by way of smart mirrors and apps for store assistants to better help customers.

Syte, a Tel Aviv startup that works with fashion retailers like Farfetch and River Island, as well as those that sell a wider variety of goods like Argos, Sainsbury’s and Kohl’s, has raised $21.5 million in funding. The Series B was led by Viola Ventures, with participation from Storm Ventures, Commerce Ventures, Axess Ventures and Remagine Ventures.

Syte has now raised $32 million, including a previous round in 2017; it’s not disclosing its valuation but is projecting 300% revenue growth this year.

The use of visual search — using computer vision to “read” a picture, match it up with its metadata and then find pictures of products that are similar to it — has become commonplace in e-commerce in recent years.

Among the many other companies that have this kind of tech — including visual search platforms like Pinterest and social media platforms themselves — Syte’s approach is notable in how it engages shoppers in the process of the search. Users can snap pictures of items that they like the look of, which can then be used on a retailer’s site to find compatible lookalikes. Retailers, meanwhile, can quickly integrate Syte’s technology into their own platforms by way of an API.

Lihi Pinto Fryman, Syte’s CMO who co-founded the company in London with husband Ofer Fryman, Idan Pinto and Dr Helge Voss, said in an interview that the company spent about three years developing its technology — spurred initially by her own surprise, when she was working as an investment banker, at not being able to find a particular dress she spotted in a magazine — and only launched a product about 18 months ago.

Since then, she says Syte has seen “super hyper” growth because of the gap the company is filling.

The crux of the problem goes something like this: Retailers both online and offline have found that a new generation of shoppers are less interested in visiting their storefronts.

They are instead shopping by browsing social media platforms like Instagram and buying from there, which essentially opens those retailers to whole new set of competitors, and puts them potentially at a great disadvantage, as they are not as well-equipped to speak to that audience or anticipate what interests them to trigger sales.

“Young people are on Instagram for hours each day,” Fryman said. Indeed, Instagram is one of the only big social networks that’s seeing usage rise at the moment. “Retailers need to find a way to compete with that and remain in the market, and they can’t just continue what they’ve always done.”

On the other hand, while there are a number of visual search tools out in the market, not all of them are useful enough. “If you are searching for a ruffled floral yellow dress but you get a blouse, it just doesn’t cut it,” she noted. “And if it takes seven seconds to get an answer, that’s also not good, because people will give up after two seconds. Millennials and Gen Z shoppers have a very short attention span, so you need to be accurate and fast.”

The idea is that a product like Syte’s addresses both of these issues, and then some. In addition to its camera-based search service, it provides a recommendation engine to retailers, plus tagging services for its back catalog to complete the service.

“Rarely do we find companies that have managed to solve a technological problem that tech giants have been working for years to solve without success,” says Ronen Nir, general partner at Viola Ventures, in a statement. “The feedback from the market is clear and swift and the rate of adoption of Syte’s solution is unparalleled. We are excited to lead a significant funding round that would be able to take the company to the next level.”

Syte’s more recent foray into physical commerce is an interesting turn as well. Smart mirrors have been more of a wishlist item than something that has seen critical mass adoption so far in changing rooms.

If the idea does catch on, I wonder what kind of a digital divide it might create among retailers, though, since the cost of refurbishing changing rooms to include these, along with all the backend changes that would need to be made, will likely be only the kind of service that bigger or high-end boutiques will be able to shoulder.

More interesting, perhaps, is the idea of app-based tools for assistants, many of whom already carry a smartphone and would likely be grateful for recommendations to help sell better to customers.

“We have a vision to transform product discovery, and thus the e-commerce experience, for both retailers and consumers.” said Ofer Fryman in a statement. “That vision is what has led us since we founded Syte, and it is what continues to lead us as we enter this stage.”

Nike launches a subscription service for kids’ shoes, Nike Adventure Club

Just in time for back-to-school shopping, Nike today officially announced its entry into the subscription service market with the launch of a “sneaker club” for kids called Nike Adventure Club. The new program is specifically designed to make shopping easier for parents who struggle to keep up with their quickly growing children’s shoe needs. Instead of taking kids to the store and trying on pair after pair to try to find something the child likes, the new Nike Adventure Club will instead ship anywhere from four pairs to a dozen pairs of shoes per year, depending on which subscription tier parents choose.

The club serves kids from sizes 4C to 7Y — or roughly ages 2 to 10.

Club pricing begins at $20 per month which will ship out new shoes every 90 days. For $30 per month, kids get 6 pairs per year. And for $50 per month, kids will get new shoes every month — a choice that may be excessive except for the most active kids who were their sneakers every day, play sports, or have a tendency to wreck their shoes in short order.

However, even the minimum of four pairs per year may be too frequent for some parents of older kids.

According to the American Orthopaedic Foot & Ankle Society, toddlers under 16 months grow more than one-half a foot size every two months. From 16 to 24 months, they grow an average of one-half a foot size every three months. From 24 to 36 months, it’s one-half a foot size every four months. Then things slow down.

Children over three years old grow one-half a foot size every 4 to 6 months. That means some older kids only need to replace their shoes twice per year, outside of excessive wear and tear.

That said, Nike allows parents to upgrade or downgrade their subscription at any time, or even put it on pause.

NikeNews NikeAdventureClub ActivityGuide 1 native 1600

Once signed up, parents will receive an email with a selection of over 100 styles of Nike and Converse shoes to choose from, which they can review with their kids. They then pick which shoes they want to receive, and these are shipped to the home in a box with the child’s name on it. This box also includes an “adventure kit” filled with activities and games for parents to do with their kids, stickers, plus a small gift. The kit is created in partnership with the nonprofit KaBoom, which is focused on encouraging kids to lead healthy lifestyles.

If the shoes are the wrong size, exchanges are free within a week of delivery.

Perhaps the best part of the program is the recycling component.

Twice a year, Nike will ship out a prepaid bag where parents can send back their kids’ worn shoes, which will either be donated to families in need if in good condition or recycled through Nike Grind, a program that separates out the rubber, foam, leather, and textile blends, grinds them into granules, and incorporates those into new products including footwear, apparel, and play surfaces.

“We see Nike Adventure Club sits as having a unique place within Nike, and not just for it being the first sneaker club for kids,” says Dave Cobban, VP of Nike Adventure Club, in a statement about the launch. “It provides a wide range of options for kids, while at the same time, it removes a friction point for parents who are shopping on their behalf.”

Nike has been testing the program since 2017, when it was known as Easy Kicks. The test reached 10,000 members, the company said.

Nike isn’t the first to launch a subscription focused on kids — and big retailers have taken note. This year, Foot Locker took a minority stake in kids’ clothing subscription Rockets of Awesome and Walmart partnered with children’s clothing startup Kidbox.

Stitch Fix also offers a kids’ styling service. And Amazon offers a try-before-you-buy shopping service without a subscription, Prime Wardrobe. Amazon’s variation offers both girls and boys options where parents can fill a box with apparel, shoes, and accessories for home try-on and easy returns.

Nike’s Adventure Club is launching today but is easing in new customers via a waitlist option.

Ethical fashion is on the rise

The fashion industry has historically relied on exploitative, unsustainable and unethical labor practices in order to sell clothes — but if recent trends are any indication, it won’t for much longer. Over the last several years, the industry has entered a remarkable period of upheaval, with major and small fashion brands alike ditching traditional methods of production in favor of eco-friendly and cruelty-free alternatives. It’s a welcome, long-overdue development, and it’s showing no signs of slowing down.

Tradition fashion is unethical in almost too many ways to count. There is, of course, the monstrous toll on animal life. Every year, over one billion animals are slaughtered for their fur or pelts, usually after living their lives in horrific factory farms.

Cows, including newborn and even unborn calves, are skinned alive in order to make leather, while animals killed for their fur are executed through anal electrocution, neck-snapping, drowning and other ghastly ways in order to avoid damaging their pelts. Even wool, traditionally perceived as a more humanely-produced animal product, involves horrors on par with those at a slaughterhouse.

But animals aren’t the only ones who suffer under the traditional fashion industry. In Cambodian garment factories, which export around $5.7 billion in clothes every year, workers earning 50 cents an hour are forced to sit for 11 hours a day straight without using the restroom, according to Human Rights Watch.

Mass faintings in oppressively hot factories are common, and workers are routinely fired for getting sick or pregnant. In Bangladesh — the world’s second-largest importer of apparel behind China — a poorly-maintained garment factory collapsed in 2013, killing 1,132 people and injuring around 2,000 others. When Cambodian garment workers protested in 2014 for better working conditions, police shot and killed three of them.

Lastly, traditional fashion is killing the planet. Every year, the textile industry alone spits out 1.2 billion tons of greenhouse gases — more than all marine shipping vessels and international flights combined — and consumes 98 million tons of oil. Textile dyeing is the second-largest polluter of clean water, and on the whole, the apparel industry accounts for 10 percent of all greenhouse emissions worldwide. Worst of all, the clothes produced by this massive resource consumption produces clothes are rapidly discarded: In 2015, 73 percent of the total material used to make clothes ended up incinerated or landfilled, according to a study by the Ellen MacArthur foundation.

Thankfully, as big and small clothing manufacturers alike are realizing, there are plenty of ways to sell fashionable clothing and accessories that don’t destroy the environment, endanger workers, or cause suffering to animals.

Vegan clothes are becoming increasingly popular, and there’s no shortage of them to choose from. Some brands, like Keep Company and Unicorn Goods, offer an expansive generalized catalogue of vegan shirts, jackets, accessories and more. Other brands are more specialized: Unreal Fur has a beautiful line of vegan faux-fur, Ahisa, Beyond Skin and SUSI Studio all sell stylish vegan shoes, and Le Buns specializes in vegan swimwear. There are upscale vegan clothing retailers, such as Brave Gentleman, as well as more casual budget options, like The Third Estate.

Strict veganism isn’t the only way to manufacture clothing ethically. Hipsters For Sisters’ products are made entirely with recycled, upcycled, or deadstocked materials, earning the approval of PETA. Reformation utilizes a carbon-neutral production process to make its clothes (and offers customers a $100 store credit if they switch to wind energy), while Stella McCartney’s entire product line is vegetarian.

GettyImages 978108544

British fashion designer Stella McCartney poses prior her presentation during the men and women’s spring/summer 2019 collection fashion show in Milan, on June 18, 2018. (Photo by MIGUEL MEDINA / AFP) (Photo credit should read MIGUEL MEDINA/AFP/Getty Images)

Many vegan clothing companies, such as In The Soulshine and Della, have found ways to sell cruelty-free clothing while also providing humane working conditions to their factories’ workers. Amanda Hearst’s Maison de Mode features a combination of Fair Trade, recycled, cruelty-free, and organic products — as well as a comprehensive labeling system to inform customers which is which.

There are plenty of small, niche companies offering ethical clothing options, but make no mistake: The transition to sustainable and ethical fashion is an industry-wide phenomenon. Well-established brands like Dr. Marten’s, Old Navy, H&M and Zara all now sell vegan clothes. Gap, Gucci, and Hugo Boss have banned fur from their stores, and three of the largest fashion conglomerates — H&M Group, Arcadia Group and Inditex — recently pledged to stop selling mohair products by 2020.

Companies are rapidly investing in new ethical alternatives to traditional clothing as well: Save The Duck’s PLUMTECH jackets feature a cruelty-free alternative to down feathers, while companies like Modern Meadow are developing new biofabricated leather made from collagen protein and other essential building blocks found in animal skin that don’t require the slaughter of any animals.

There are, of course, some holdouts. Canada Goose still traps and kills coyotes to make its fur jackets, and uses a device that’s been banned in dozens of countries for its cruelty in order to do so. As a result, its store openings regularly draw protesters.

But by and large, the trend is in the opposite direction. From up-and-coming brands to the biggest names in fashion, the industry is moving away from the destructive practices of years past and toward cleaner, ethical ways of making clothes.

It shouldn’t be a surprise. After all, being successful in fashion has always required changing with the times — and in 2019, basing an industry on labor abuse, destruction of the environment and animal torture to make their products is no longer a sustainable business model.

Wedding dress customizer Anomalie raises $13M as bridal stores crumble

David’s Bridal once owned 50% of the $36 billion wedding gown market before it filed for bankruptcy last year. Brides were growing sick of the lack of styles and sizes plus high prices at expensive brick & mortar shops. The industry was destined for disruption by software that would replace overhead costs and inflexibility with direct-to-consumer personalization.

That’s why I profiled a new custom wedding dress startup back in 2016 called Anomalie despite little funding or traction. The rise of Instagram meant every bride wanted to look unique on a budget, not pay $5000 for a cookie-cutter $200 dress that happened to be white. Anomalie was willing to embrace software to offer 4 billion design permutations and break the markup cartel by selling gowns starting at $1000.

2.5 years later, Anomalie has begun to prove that cheaper doesn’t have to look cheap and custom doesn’t have to cause a headache. 13% of US brides, 275,000 out of 2.1 million, created an Anomalie account in the last year. With David’s Bridal looking shaky and wedding dresses being a seven-times larger market than bedding and mattresses, investors eagerly proposed to Anomalie. Today the startup announces a $13.6 million Series A led by consumer product VC Goodwater Capital .

“I don’t think I’ll ever get tired of working with brides. Other companies would kill for this costumer. She’s so obsessed with every detail of her wedding dress. it’s just a perfect environment to collect data” says Anomalie co-founder and CEO Leslie Voorhees. “Long lead time, high margin, this industry that’s completely f*cked up —  it’s the perfect place to start this mass customization engine beginning with the wedding dress” she tells me, hinting at the startup’s potential to customize other clothing too.

Anomalie is also flexing its tech muscle today with the launch of its new dress sketch visualizer. Choose between a few options on shape, cut, color, pattern, and fabric, and you’ll see an algorithmic sketch of your dream dress appear instantly. Anomalie then pairs you with a squad of its designers to finalize the details, ship swatches, and get you your gown with a 100% refund policy if it’s not right.

The startup’s nest egg will go towards hiring more engineers plus bringing more of production in-house to offer additional features like this. But Voorhees insists that “I don’t think we’ll ever completely automate away the stylists. Customer don’t care about AI or machine learning, but they want to trust us to pull the ideas out of their heads.”

Anomalie co-founder and CEO Leslie Voorhees

Anomalie was woven out of Voorhees’ frustrations picking her own wedding dress. She’d been managing factories and supply chains in Asia for Nike and Apple, and it made no sense why slapping “bridal” on a dress could make it up to ten-times more expensive.

Her investigation uncovered that most brands were outsourcing their manufacturing, so she did an end-run, contacted factories directly, and got her dress made custom for a fraction of the price. So many of her pals demanded help doing the same that the Harvard Business School grad soft-launched Anomalie with her husband Calley Means [Disclosure: who I know from college] in the summer of 2016.

The startup’s gowns now average $1,400. Growth has been swift since weddings are so photographed and shared, with Anomalie reaching an outstanding net promoter score of 91. A friend of mine recently bought her dess through the company and it looked stunning and one-of-a-kind without breaking the bank. And since they’re custom, Anomalie makes inclusivity and advantage by offering larger sizes absent elsewhere

Meanwhile, Anomalie’s incumbent competitors have struggled. Gap and J.Crew abandoned the wedding dress business in the last few years. David’s Bridal emerged from bankruptcy with its 300 retail stores still operating, but it’s slipped to 30 percent US market share. It’s now owned by lenders including Oaktree Capital Group, which is a bad omen given that firm was responsible for driving Toys”R”Us into liquidation instead of keeping it open. No other players have a sizable foot or well-known brand besides super high-end designer Vera Wang.

Anomalie capitalized on David’s troubles by poaching its head of bridal production Angela Ng, who now leads the startup’s Hong Kong team and relieves Voorhees of constant trips to China. It also hired former Sephora VP of digital Marcy Zelmar and former TrueCar VP of engineering Aaron Tavistock. Their goal is to sell more dresses to get Anomalie more data, more factory modularization, and more control over its manufacturing.

Anomalie’s dress visualizer turns a few style selections into a sketch of your potential gown

The new funding round that builds on its $4.5 million seed round was joined by Signia, SoGal Ventures, Lerer Hippeau’s BN Capital Fund, and Fin’s Sam Lessin also includes strategic angels like former Stitch Fix CTO Jeff Barrett and ThirdLove underwear CEO Heidi Zak. At Anomalie’s San Francisco headquarters, mannequins sporting design prototypes stand beside software teams optimizing the new dress visualizer. And when I say the dresses are custom, I mean they can get about as weird as you want. Anomalie is finishing up a dress with lyrics from the couple’s favorite song embroidered in a secret language from their favorite TV show…and it still looks beautiful.

“One of the coolest things about Anomalie is that they’re not just using digital as a distribution strategy, but to also deliver a differentiated product experience” says Goodwater partner Eric Kim. “Anomalie’s sketch-builder is a great expression of this emphasis on product and customer centricity.” Wedding dresses have been largely ignored by startups despite the market being bigger than luggage ($34 billion), or shaving ($21 billion), oral care ($10 billion) and hair loss ($4 billion) combined.

The challenge is that unlike those products, bridal gowns are “a zero failure game. This is like airplane engines and heart rate monitors” Voorhees stresses. Anomalie must maintain perfect quality, times, and customer experience to avoid ruining someone’s big day. “Never messing up a dress or losing a dress — we take this really, really seriously.” She knows a few viral disasters could sink the ship. It also has to stay ahead of fresh entrants like COUTURME, a new Y Combinator startup making custom evening gowns as well as wedding dresses.

Anomalie’s SF headquarters. Photo by Summer Wilson

Anomalie sees global demand for a better experience, and thinks it can apply its data set to wedding dresses for more cultures as well as additional types of clothing. “We are building up a large repository of female measurements and creating tech plus operational processes around ‘mass customization’ that can be applied to other garments” Voorhees reveals. “Our aspirations are around bringing more body inclusivity + customization to women’s fashion, not just bridal.”

And while Anomalie could always find a retail partner to get more exposure, it’s tough for brick & mortar brands to operate online without cannibalizing their sales. “We think the women’s closet of the future contains staples from Stitch Fix, rotating dresses from Rent the Runway, and signature custom garments from Anomalie.”

The Anomalie just needs to educate brides that they can actually have the dress of their dreams, and now it wants to inspire that dream on-site too. Full of ambition and verve, Voorhees concludes, “What’s Pinterest valued at when it’s basically a wedding dress search engine?”

Armoire is angling to become the every day Rent the Runway

When Armoire first emerged from MIT’s accelerator program back in 2016, the company’s vision was already fully formed — combine StitchFix and Rent the Runway to give women a low-cost, sustainable way to get a high-fashion, high-functioning wardrobe for every day.

Ambika Singh, the Seattle-based company’s chief executive set out to solve two problems, the amount of time wasted on shopping, some 216 hours spent in stores or online, and the waste associated with the impulse purchases and fast fashion that have become the byproduct of an accelerating consumer culture.

Carried along by two trends — the proliferation of direct to consumer brands trying to capture the attention of a new customer and the rise of the rental movement — Singh thought Armoire could provide a daily wardrobe for professional women at a price point that could be attractive enough to switch from an ownership to a rental model for fashion.

(Or as the New York Times put it in a strong contender for headline of the year: “They see it. They like it. They want it. They rent it.“)

It may have taken three years, but investors are now renting out some space of their own on the company’s cap table. Armoire recently raised a $4 million seed round from investors including Jesse Draper’s Halogen Ventures; Zulily co-founder, Darrell Cavens; Vijay Talwar, the former chief executive of BlueNile; and Rajeev and Jill Singh, former executives at Concur.

A subscription to Armoire’s service costs $149 per month and covers four items per shipmnet. The company’s average customer (Singh would not disclose how many of those there are), typically receive between 12 and 15 items in a month by swapping out the clothes they order.

Singh says this $149 per month is a discount to inventory that would otherwise cost around $300 if bought directly from stores.

The other benefit, says Singh, is that the company focuses on women-owned brands. Current suppliers include Of Mercer, Brass Clothing, and Zuri.

While the relationship between the company and its clothing providers is more of a wholesale model (Armoire buys the clothes at a discount), Singh envisions a time when the company could reduce costs or add revenues by marketing styles from its clothing suppliers to customers.

Other companies that are also taking the rental retail model to the masses have a consignment relationship where their suppliers are getting a portion of rental revenues.

The number of companies pitching rental retail has grown significantly since Armoire’s chief executive first stepped on the MIT pitch competition stage in Boston years ago. Now there’s Gwynnie Bee, Haverdash, and the grand dame of rental fashion, Le Tote.

Why enter a market when there’s already a global contender backed by over $62 million in venture financing?

Some competitors and retailers have a consignment relationship they’re getting a portion of a rental revenue.

“We’ve got a particular focus that a woman post-30 needs. We focus on maternity and nursing and we have a focus on fit.” says Singh. “The fact that rental has major headwinds around us and we have this consumer that is underserved and finding her voice in her wallet.”

Armoire’s team is 90% women and was hired from places like TheRealReal, Amazon, Zulily, and Rover. The company owns all of its own inventory, and is targeting a 30-to-60 year-old woman who’s typically a working mother.

Singh uses a $70,000 median household income as its targeting proxy on Facebook, but says she’s hoping to bring the price point down for middle class consumers. “This is a good way to get the volume ‘she’ might desire with a fixed budget,” says Singh.

And Armoire does have an option to buy the clothes that customers are renting — should they feel inclined. Singh expects the company booked roughly $200,000 in May.

 

Depop, a social app targeting millennial and Gen Z shoppers, bags $62M, passes 13M users

The rising popularity of omni-channel commerce — selling to customers wherever they happen to be spending time online — has spawned an army of shopping tools and platforms that are giving legacy retail websites and marketplaces a run for their money. Now, one of the faster growing of these is announcing an impressive round of funding to stay on trend and continue building its business.

Depop, a London startup that has built an app for individuals to post and sell (and mainly resell) items to groups of followers by way of its own and third-party social feeds, has closed a Series C round of $62 million led by General Atlantic. Previous investors HV Holtzbrinck Ventures, Balderton Capital, Creandum, Octopus Ventures, TempoCap and Sebastian Siemiatkowski, founder and CEO of Swedish payments company Klarna all also participated.

The funding will be used in a couple of areas. First, to continue building out the startup’s technology — building in more recommendation and image detection algorithms is one focus.

And second, to expand in the US, which CEO Maria Raga said is on its way to being Depop’s biggest market, with 5 million users currently and projections of that going to 15 million in the next three years.

That’s despite strong competition from other peer-to-peer selling platforms like Vinted, Poshmark, and social platforms that have been doubling down on commerce, like Instagram and Pinterest, but on the other hand the opportunity is big: a recent report from ThredUp, another second-hand clothes sales platform, estimated that the total resale market is expected to more than double in value to $51 billion from $24 billion in the next five years, accounting for 10% of the retail market.

Prior to this, Depop had raised just under $40 million. It’s not disclosing its valuation except to say it’s a definitely upround. “I’m extremely happy,” Raga said when I asked her about it this week.

The rise of the bedroom entrepreneur

The funding comes on the heels of strong growth and strong focus for the startup.

If “social shopping”, “selling to groups of followers”, and the “use of social feeds” (or my headline…) didn’t already give it away, Depop is primarily aimed at millennial and Gen Z consumers. The company said that about 90% of its active users are under the age of 26, and in its home market of the UK it’s seen huge traction with one-third of all 16-24 year-olds registered on Depop.

Its rise has dovetailed with some big changes that the fashion industry has undergone, said Raga. “Our mission is to redefine the fashion industry in the same way that Spotify did with music, or Airbnb did with travel accommodation,” she said.

“The fashion world hasn’t really taken notice” of how things have evolved at the consumer end, she continued, citing concerns with sustainability (and specifically the waste in the fashion industry), how trends are set today (no longer dictated by brands but by individuals), and how anything can be sold by anyone, from anywhere, not just from a store in the mall, or by way of a well-known brand name website. “You can now start a fashion business from your bedroom,” she added.

For this generation of bedroom entrepreneurs, social apps are not a choice, but simply the basis and source of all their online engagement. Depop notes that the average daily user opens the app “several times per day” both to browse things, check up on those that they follow, to message contacts and comment on items, and of course to buy and sell. On average, Depop users collectively follow and message each other 85 million times each month.

This rapid uptake and strong usage of the service has driven it to 13 million users, revenue growth of 100% year-on-year for the past few years, and gross merchandise value of more than $500 million since launch. (Depop takes a 10% cut, which would work out to total revenues of about $50 million for the period.)

When we first wrote about Depop back in 2015 (and even prior to that), the startup and app were primarily aiming to provide a way for users to quickly snap pictures of their own clothes and other already-used items to post them for sale, one of a wave of flea-market-inspired apps that were emerging at that time. (It also had an older age group of users, extending into the mid-thirties.)

Fast forward a few years, and Depop’s growth has been boosted by an altogether different trend: the emergence of people who go to great efforts to buy limited editions of collectable, or just currently very hot, items, and then resell them to other enthusiasts. The products might be lightly used, but more commonly never used, and might include limited edition sneakers, expensive t-shirts released in “drops” by brands themselves, or items from one-off capsule collections.

It may have started as a way of decluttering by shifting unused items of your own, but it’s become a more serious endeavor for some. Raga notes that Depop’s top sellers are known to clear $100,000 annually. “It’s a real business for them,” she said.

And Depop still sells other kinds of goods, too. These pressed-flower phone cases, for example, have seen a huge amount of traction on Twitter as well as in the app itself in the last week:

Alongside its own app and content shared from there to other social platforms, Depop extends the omnichannel approach with a selection of physical stores, too, to showcase selected items.

The startup has up to now taken a very light-touch approach to the many complexities that can come with running an e-commerce business — a luxury that’s come to it partly because its sellers and buyers are all individuals, mostly younger individuals, and, leaning on the social aspect, the expectation that people will generally self-police and do right by each other, or less risk getting publicly called out and lose business as a result.

I think that as it continues to grow, some of that informality might need to shift, or at least be complemented with more structure.

In the area of shipping, buyers generally do not seem to expect the same kind of shipping tracking or delivery professionals appearing at their doors. Sellers handle all the shipping themselves, which sometimes means that if the buyer and seller are in the same city, an in-person delivery of an item is not completely unheard of. Raga notes that in the US the company has now at least introduced pre-paid envelopes to help with returns (not so in the UK).

Payments come by way of PayPal, with no other alternatives at the momen. Depop’s 10% cut on transactions is in addition to PayPal’s fees. But having the Klarna founder as a backer could pave the way for other payment methods coming soon.

One area where Depop is trying to get more focused is in how its activities line up with state laws and regulations.

For example, it currently already proactively looks for and takes down posts offering counterfeit or other illicit goods on the platform, but also relies on people or brands reporting these. (Part of the tech investment into image detection will be to help improve the more automated algorithms, to speed up the rate at which illicit items are removed.)

Then there is the issue of tax. If top sellers are clearing $100,000 annually, there are taxes that will need to be paid. Raga said that right now this is handed off to sellers to manage themselves. Depop does send alerts to sellers but it’s still up to the sellers themselves to organise sales tax and other fees of that kind.

“We are very close to our top sellers,” Raga said. “We’re in contact on a daily basis and we inform of what they have to do. But if they don’t, it’s their responsibility.”

While there is a lot more development to come, the core of the product, the approach Depop is taking, and its success so far have been the winning combination to bring on this investment.

“Technology continues to transform the retail landscape around the world and we are incredibly excited to be investing in Depop as it looks to capture the huge opportunity ahead of it,” said Melis Kahya, General Atlantic Head of Consumer for EMEA, in a statement. “In a short space of time the team has developed a truly differentiated platform and globally relevant offering for the next generation of fashion entrepreneurs and consumers. The organic growth generated in recent years is a testament to the impact they are having and we look forward to working with the team to further accelerate the business.”

Global Fashion Group plans to raise €300M in Frankfurt IPO

The ongoing evolution of the startup factory known as Rocket Internet continues apace. Today, the group of regional e-commerce fashion sites incubated in the Berlin outfit that eventually got spun out under the Global Fashion Group umbrella — Zalora, Dafifi, The Iconic and La Moda — announced that it is planning a public listing on the Frankfurt stock exchange. It is expecting to raise €300 million ($336 million) by selling newly issued shares in its IPO.

Part of the hope is that the funding and IPO will help the group continue building out its presence in emerging markets — when it was in growth mode, one of Rocket’s key strategies was building e-commerce “clones” in developing markets to tap into early growth ahead of large global brands like Amazon expanding and competing against it.

Emerging markets are still growing at a time when growth in more developed markets in regions like the US and Western Europe has levelled off. GFG estimates that the total value of fashion and lifestyle in its operating regions totalled €320 billion in 2018.

“We are excited about this next step for GFG,” Christoph Barchewitz and Patrick Schmidt, the co-CEOs, said in a joint statement. “It is still very early days for fashion and lifestyle e-commerce in our markets. Today, most of our markets have less e-commerce adoption than Europe had 10 years ago. As consumer behaviour migrates towards e-commerce, GFG’s well-known consumer platforms, local teams, and fashion-specific operational infrastructure put us at the forefront of this growth opportunity. An IPO will allow us to keep investing in our end-to-end customer proposition, further strengthening our position as the leading fashion and lifestyle destination in growth markets.”

We’ve asked for an estimated valuation of the GFG, and we’ll update this post as we learn more. Historically, the group has had some ups and downs. One round of funding in 2016 came at a $1.1 billion valuation — but that was down on a valuation of $3.5 billion a year before. Several of the most unprofitable operations have also been closed or downsized over the years.

In the meantime, GFG is disclosing some numbers ahead of the listing:

● It notes that its active customer base is now 11.2 million, up from 8.9 million in 2016.
● NMV grew from €1,076 million to €1,453 million between 2016 and 2018.
● Revenues were €1,156 million in 2018, up from €887 million in 2016.
● GFG is still operating at a net loss but individual operations are now break-even on an Adjusted EBITDA basis. These include its Latin American operations and Australia.
● For the year 2018, Adjusted EBITDA margin (post the adoption of IFRS 16) was (4.3)%.
● Following a strong first quarter, GFG expects NMV to grow by 20-23% (on an organic basis)
to reach €1.7bn to €1.8bn in 2019.
● Further, the Company expects to generate more than €1.3 billion in revenue and to make additional progress towards EBITDA break-even in 2019.

DTC (direct to consumer) has become one of the most important trends in online commerce in the last several years, with a number of brands bypassing traditional retailers and leveraging their own websites, social media and other channels to find and sell to customers.

The companies that make up the GFG have been built in part on that trend: consumers have become more open to hearing about and trusting new brands in recent years, and that has helped GFG’s companies establish themselves in the market, collectively selling more than 40 of their own fashion and lifestyle brands (and reaching economies of scale by selling them across their various markets) alongside 10,000 global, local and own fashion brands to a market of over 1 billion consumers.