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Start-Up Pitches Luxury Goods, Minus the Brand

Italic will sell products made by the same manufacturers contracted by luxury brands like Prada, Celine and Burberry. But do consumers value the craftsmanship more than the logo?
Bag, $135, from factory used by Miu Miu; Cashmere Scarf, $200, from factory used by Loro Piana; Glasses, $75, from factory used by EssilorLuxottica | Source: Courtesy
By
  • Tamison O'Connor

LOS ANGELES, United States — It's no secret that product markups in luxury fashion can be eye-wateringly high. From factory to shop floor, items can be priced at multiples higher than they cost to produce.

E-commerce site Italic is betting that removing the brand — and the mark-up — from the equation will prove a hit with consumers.

The start-up's members-only marketplace, which launches Thursday, allows manufacturers that create products for luxury brands to sell directly to consumers. Shoppers who pay a $120 annual membership fee can choose from a selection of unbranded luxury goods, from bags and wallets to prescription eyewear and leather jackets, produced by the same factories that count names like Prada, Givenchy, Celine and Burberry among their clients.

The company has raised $13 million in funding, counting Index Ventures, Ludlow Ventures, Comcast Ventures and Global Founders Capital among its investors. Over 100,000 people joined a waiting list to be notified when membership opens, with signups initially limited to the US, said company founder Jeremy Cai.

Motorcycle Jacket, $425, from factory used by J Brand

Upon launching, the platform will have about 60 styles live on the site, with a view to doubling this by the end of the year. However, customers won't find unbranded versions of the Gucci Dionysus bag or Hedi Slimane's latest Celine creations. All products sold on Italic will be unique and exclusive to the platform to avoid infringing on brands' intellectual property.

The start-up joins a growing number of brands, including Everlane and Warby Parker, which provide a premium-feeling, minimally branded product at relatively affordable prices. Within the luxury sector, high-end retailers, including Mr Porter, Joseph and MatchesFashion, are expanding their private label collections, which tend to be priced below standard luxury fare.

Italic goes one step further, selling items that lack even the private label branding. The marketplace will instead focus on providing the infrastructure — from marketing, design and warehousing to customer support — to enable manufacturers to sell products directly. The company will take a commission on sales.

“We essentially do everything that brands do and more, but we do it for the manufacturers,” Cai said.

For example, Italic's merchandising team will work with factories that have product and pattern libraries to tweak existing designs so they don't mimic products already on the market. Italic also has two designers, alumni of Armani and Calvin Klein, to work with manufacturers that don't have in-house creative teams.

“We are very careful about every single product that we sell being originally designed, you won’t find an exact product like it in the market,” Cai said. “We want breadth and coverage of a lot of different styles.”

We essentially do everything that brands do, and more, but we do it for the manufacturers.

Branding can be a powerful tool, especially in a sector like luxury, where purchases are emotional rather than practical. That’s especially true for “statement” products, like handbags.

"People buy branded products to be reassured of the quality and style of the item and also for their projected image: they somehow communicate to other people the style, sophistication and preferences of their owner," said Mario Ortelli, managing partner of luxury advisors Ortelli & Co. "You want to feel and show that you are part of the brand story."

But Cai doesn’t anticipate the manufacturers on Italic’s marketplace competing head to head with luxury brands.

“For a person who is going to buy a Gucci bag, we are never going to win them over with unbranded product,” he said. “That doesn’t mean in some avenue of their life, they wouldn’t be open to switching up their sheets or maybe a shirt, or a leather jacket, where they actually don’t like a logo on there.”

As well as geographical expansion and international shipping, the platform’s short term goals include expanding into product categories like activewear and beauty. The focus will remain on luxury, Cai said.

“The reason we want to start in luxury is because we can say to the customer: we can make premium product effectively and replace a lot of your aspirational shopping,” he said.

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