NEW YORK, United States — Perhaps “see now, buy now” isn’t dead after all.
Just last week, Tom Ford and Thakoon announced that they were abandoning the in-season runway show model, expressing that the market simply wasn't ready for the change. But New York-based brand Rebecca Minkoff, the first to announce a shift to in-season shows — even before Burberry — is doubling down on its push to deliver product directly to consumers in a near-instant fashion.
To do so, the company laid off 12-15 employees on Friday, most of which supported wholesale operations. But those layoffs will be offset by recent and near-future hires installed to fuel the growth of the company’s e-commerce and direct-retail channels. (Rebecca Minkoff currently employees approximately 110 employees in its corporate offices, and also operates four standalone stores in the US.)
“When we started this ‘see, buy, wear’ experiment in February of 2016, we knew that it’s one thing to have a show,” chief executive Uri Minkoff told BoF. “But this was the beginning of a two-year experiment, a two year-process of disrupting our business model, getting out in front of it. Look, it’s a painful process, but we are fully committed to it.”
Right now, the majority of Rebecca Minkoff’s sales come from wholesale partnerships, although market sources suggest that e-commerce is close to 20 percent of sales. The executive said the restructuring of departments will set the company on a track to making direct retail — both physical stores and online — 60 percent of the business. (The company did not disclose financials, but gross sales in 2014 were reported to be upward of $100 million.)
The company will also add more production in Europe and domestically. “Getting out in front of Trump’s potential TPP tax code and being able to design two-to-four months ahead versus a year,” he said.
But as designers back away from the “see now, buy now” experiment, why is Rebecca Minkoff leaning in? According to Uri Minkoff, the brand has seen online sales increase by 60 percent year over year since its first in-season show.
“The reason why we’re not gun-shy is that the loyalty I have built with our consumer is incredibly strong,” designer Rebecca Minkoff told BoF. “The proof is in my trunk shows, in the fact that if I wear something, that’s what sells out. We are very certain that loyalty and [our client’s] desire are more intertwined.”
The brand, which launched in 2005 and quickly became known for its well-priced, trendy handbags, has prided itself on being first-to-market in terms of tech innovations, installing magic mirrors at its retail stores, launching wearable tech products and dabbling in virtual reality long before many of its competitors.
But while gutsy marketing initiatives can help to improve brand awareness, they often require significant investment. For instance, the brand’s last runway show, which was held at Los Angeles’ popular outdoor shopping mall The Grove, was an elaborate staging. However, Uri Minkoff said that long-established relationships have allowed the company to put on such events with a reasonable budget, and that Friday’s layoffs do not indicate any sort of financial distress.
“We have a good relationship at the Grove, and we have phenomenal sponsors that want to be a part of our shows because of the excitement around them,” he said. “Our out-of-pocket budgets are relatively the same with ‘see, buy, wear’ as they were before. People want to be a part of this.”