The California-based company is profitable. It generated between $104 million and $106 million in net revenue and about $50 million in gross profit during the three months ending Oct. 3.
Lulu’s started off as a vintage boutique in California in 1995 but eventually transitioned to a purely digital business by 2008. Like many fast fashion brands, it releases hundreds of new styles weekly and operates on a data-driven model to determine what to keep producing.
”Our product creation and curation model leverage a ‘test, learn, and reorder’ strategy to bring hundreds of new products to market every week; we test them in small batches, learn about customer demand, and then quickly reorder winning products in higher volume to optimise profitability,” the company wrote in its prospectus.
Investment firms like Andreessen Horowitz are backing start-ups that mimic the Chinese fast-fashion giant’s blueprint, as they look to build the next big Gen Z label.