Moda Operandi’s men’s launch comes during a period of intense growth for the New York-based e-tailer, as it aims to distinguish itself in a competitive market dominated by larger players. Farfetch, Yoox Net-a-Porter and MatchesFashion are angling to capture as much of the growing luxury e-commerce market as possible by offering exclusive styles, faster delivery and VIP services. Menswear is proving to be a key battleground.
In the last two years, Moda Operandi also expanded into home goods and fine jewellery. Last year the company reported about $165 million in revenue, compared with MatchesFashion’s nearly $400 million and Yoox Net-a-Porter’s $2.5 billion. Chief executive Deborah Nicodemus expects the company to grow another 54 percent in 2018, fueled in part by the new men’s offering. The company is also planning to open more townhouse store locations in key cities in the Middle East, Europe, North America and Asia.
“It seems like Moda Operandi is in a sweet spot right now,” said John Guy, head of European luxury at Mainfirst Bank, citing the company’s strong performance in fine jewellery. Another positive is Moda Operandi’s high average order value of about $1,300, compared with about $380 at YNAP in fiscal 2017 and about $700 at Ssense, according to Guy. “We think there are viable opportunities [for Moda Operandi] to diversify by rolling out ‘live from’ collection launches, for example, as well as expanding the global footprint.”
Starting on June 22, shoppers on ModaOperandi.com will be given the option to enter mirror-image women’s or men’s sites (the latter will be visually distinguished by a lack of the retailer’s signature pink) and pre-order the men’s spring 2019 collections from 50 brands as they come off the runway in Paris, Milan, London and New York. In addition, visitors will be able to shop Moda Operandi’s in-season offering from the pre-fall and autumn 2018 collections.
Only about 30 percent of womenswear runway collections make it to the sales floor, but the ratio is even smaller for men, said Nicodemus. Brick-and-mortar buyers only order about 10 to 15 percent of men’s runway collections.
“Over the past five years, there have been so many men who have asked me, ‘When are you going to do trunk shows for men?’” she told BoF.
For Moda Operandi, the men’s launch and its plans to expand in Asia in 2019 go hand-in-hand, as male millennial Chinese consumers are helping drive the region’s rapid growth.
China is at the center of luxury e-commerce strategies. Competitors such as Farfetch and MatchesFashion are racing to capture the $22 billion market there, which grew 20 percent last year, according to Bain & Company. Chinese consumers now represent 32 percent of global luxury consumption.
To support its international ambitions, Moda Operandi raised an additional $165 million in December from Apax Digital, an Apax Partners fund, and Hong Kong investor Adrian Cheng, among others, putting its total raised at over $300 million.
Now with the help of Cheng — who told BoF he invested in the company because of its unique pre-order model, editorial point of view and the way it curates emerging designer brands — Moda Operandi is preparing to make a big entrance in Asia in 2019. The company will release its first marketing campaign in China in the first quarter of the year, followed by the release of a Mandarin website in the second quarter. In the third quarter, it plans to launch a showroom location in Hong Kong, followed by the opening of a warehouse location in the region by the end of the year. Nicodemus expects the Asian region, which currently accounts for 8 percent of sales, to grow to represent more than 20 percent of the business by 2022.
But first, Nicodemus wants to firmly establish the men’s side of the business, which she says will ultimately represent 20 to 30 percent of total sales. “Our goal is to serve an underserved client,” she says, describing the men’s market as polarised between streetwear and traditional brands. She says the Moda Operandi menswear client is closer to the latter, but not as conservative; he might work in the arts or a creative field and is particularly interested in formal and casual tailoring. He’s not the kind of customer queueing up for sneakers, though the site will offer them.
Over the last year and a half, Moda Operandi tested the men’s market through its annual gift guide and select trunk shows. But it’s yet to be seen if men will shop the platform for themselves or how much appetite they have for pre-ordering off the runway. Nicodemus said she is confident the demand is there because the consumer hasn’t had access to full collections in the past, and because it worked for the women’s business. “The client — her versus him — are really no different,” she said.
Meanwhile, Nicodemus is “very focused on driving the bottom line” as part of Moda Operandi’s journey towards profitability, which is now forecasted for 2020, by increasing the frequency of trunk shows and launching new categories. She says the company decided to raise more money last year in part to establish its ownership over the pre-order process around the world, especially in China where trunk shows are less common. “We are definitely putting a stake into the ground and ensuring we own that model,” says Nicodemus.