Billion Dollar Unicorns: Luxury Retailer Moda Operandi On The Club’s Runway

According to a Bain and Company research report, the global luxury market was estimated to grow 5% in 2014 to €223 billion (~$234.5 billion). Within the market, luxury accessories accounted for 29% of the market and grew 4% over the year. Bain estimates that across all personal luxury categories, the retail channel grew and accounted for 30% of the market. Billion Dollar Unicorn club prospect Moda Operandi is a leading player in this segment.

Moda Operandi’s Offerings

New York-based Moda Operandi was founded in 2010 by Lauren Santo Domingo and Aslaug Magnusdottir. Laura is among the authoritative figures on New York’s fashion circuit. Prior to setting up Moda Operandi, she had worked at Vogue, where she is now a contributing editor. She leveraged her experience and understanding of high-end fashion to create a premier online designer merchandise retailer that puts their customers on the front row at the runway, from the comfort and privacy of their homes.

Through Moda Operandi, subscribers can preorder the latest ready-to-wear fashion, shoes, handbags, accessories, and jewelry several months before they are available in the general market. Additionally, they also offer a boutique site that sells curated selection of buy-now, wear-now designer styles. They have established relationships with designers such as Alexander Wang and Valentino along with more than 250 high-end designers for both their trunk shows and boutique collections.

Moda Operandi operates online designer trunk shows that last anywhere from 3 to 7 days. Customers can preorder the latest fashion from the runway by placing a deposit of half the price of the product that is sent directly to the designer. Once Moda Operandi receives the product from the designer, they bill the customer for the remainder amount and ship their order. Their boutique offering operates like any other e-commerce site where items that have been ordered and paid for are delivered within 24 hours.

The company also offers the services of a personal stylist to their customers. The stylist provides customers with one-on-one wardrobe building and style advice and guides them to purchase curated Boutique picks that have been tailored to fit the customer’s needs.

Last year, Moda Operandi experimented with a physical store as well. They set up a showroom in London where they were targeting sales of $350,000 for the first quarter. However, given their impressive product selection, the company actually retailed over $472,000 in the quarter. Inspired by the success, Moda Operandi is looking to set up more such showrooms and are evaluating options of setting up shop in Hong Kong, Dubai, and Miami.

Moda Operandi’s Financials

Moda Operandi does not disclose detailed financials. Recent reports reveal that the company has seen revenues grow over 70% to more than $50 million in 2014. Given that they are in the luxury segment, it is not surprising that they bring in nearly $2,000 per order. The number increases significantly for returning customers. Their reports reveal that customers who have been shopping on the site for more than three years have an average shopping bag worth $5,000-$7,000.

Moda Operandi is venture funded with $138.4 million in funding from investors including LVMH, RRE Ventures, New Atlantic Ventures, Advance Publications, New Enterprise Associates, Fidelity Investments, Condé Nast, and Manatt Venture Fund. Their last round of funding was held in February 2015 when they raised $60 million at a valuation of $330 million. Valuation has increased 90% since they raised $22 million in December 2013. The company plans to use their recently acquired funds for market expansion.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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Photo credit: Eva RinaldiFlickr.com.