NEW YORK, United States — Moda Operandi is shutting down its men’s business as the coronavirus pandemic crushes demand even among top tier shoppers.
The online retailer started selling men’s collections, in season and through its trunk show model, in June 2018 to capture a rapidly growing luxury menswear market.
In a report last week, Bain & Company said the luxury market could lose between €60 to €70 billion in sales this year, with losses peaking in the second quarter. Other analysts expect up to a 35 percent contraction in the market.
“As a result of the economic impact to the fashion industry caused by COVID-19, Moda Operandi has made the difficult decision to sunset our men’s division, and focus on our core business around women's fashion, fine jewellery and home products,” said a representative for Moda Operandi in a statement. Employees who support the men’s team will stay employed until the end of June.
Moda Operandi started off 2020 with layoffs, cutting 50 people across the business and shutting down offices in Shanghai in January, according to sources with knowledge of the business, before securing $100 million in equity and debt financing from existing investors, including New Enterprise Associates and Apax Digital.
Moda Operandi had last raised money ($165 million) at the end of 2017 under former chief executive Deborah Nicodemus. She resigned in 2018 and was replaced by former Tesla Vice President Ganesh Srivats, who has hired new employees, many from Tesla and Jetblack, Walmart’s now-closed personal shopping service. He has also overseen a brand redesign and dealt with a problematic warehouse move in 2018 that disrupted orders into the following year.
Many multi-brand retailers are facing serious challenges as a result of the coronavirus pandemic in what was already a competitive market to capture luxury sales.
Department stores like Nordstrom and Saks Fifth Avenue are cutting costs and furloughing staff, while Neiman Marcus is exploring options including bankruptcy. Online players are facing lower-than-expected sales and logistical challenges. Net-a-Porter is accepting orders online, for example, but can’t send them out until after distribution centres reopen. Farfetch has seen its share price fall by more than half since late February to an all-time low.
Editor's Note: This article was revised on 3 April 2020. An earlier version of this article stated that 65 people were laid off in January. About 50 people's roles were eliminated at that time.