![]() While the company seemingly comes out on top from a pure dollar perspective, Song should also do well given the minimal amount of work she will have to dedicate to the line, compared to someone who owns and operates their own brand. This is significantly more than the 48.5% gross margin from third-party brands that Revolve reported in 2017. Revolve, in total, makes $164.20 when bundled with Alliance’s earnings, while Song walks away with just under $24, leaving Revolve with a nearly 69% gross margin in this hypothetical scenario. This means Alliance Apparel (owned by Revolve) makes $60 Song, with a generously estimated 10% royalty, makes $23.80 and Revolve (the retailer) makes $104.20. Alliance Apparel makes it for an estimated $50, “sells” it to Revolve for an estimated $110 (the wholesale price) and then Revolve retails it for $238. To better understand the economics, a jacket in the collection retails for $238. The most interesting part of the arrangement is in its economics: Alliance Apparel, which Revolve bought in 2014 and which manufactures all of the retailer’s private labels through its network of 130-plus suppliers around the world, will make the collection, “sell” it to Revolve and then the company will pay Song a royalty off the top. The 50-piece collection Revolve made with Song, who has over five million Instagram followers, marks the first time Revolve has put a face on one of its private labels. Starting on May 13th, the retailer will launch its first owned brand with an influencer (Aimee Song) at the helm. ![]() As it aims to change the narrative from a wholesale-driven retailer to something more promising, the company is debuting a new strategy. Putting the IPO on hold is telling The only logical reason for the decision is that because of its business model, investor appetite was lower than Revolve had hoped. More than six months later, the company is in the same exact financial position it was back in September 2018. However, owned brands accounted for 20% of total revenue in 2017 ($80 million), rising to 31% in 2018.īut then something interesting happened: Revolve never went public. In 2017, no third-party brand accounted for more than 2% of the company’s overall sales, while Lovers + Friends, one of Revolve’s private labels and its top-selling brand, accounted for 5% of sales ($16.6 million), though they curiously fell to $11 million in 2018. As you read about last fall, in 2018 Revolve stocked over 500 total brands with more than 110,000 unique styles and served more than 840,000 active customers. It outlined a multi-faceted but interrelated business that relied on influencers, private labels, owned manufacturing and modern marketing that grew the company to nearly $400 million in 2017 sales, and more than $500 million in 2018 sales.īetween 20, Revolve’s financials painted a rather promising picture that spoke to its future potential. Over 3,000 members were onboarded to the program during its soft launch, and around 10,000 people applied.Last September, Revolve, the digital- and influencer-first retailer, filed to go public. Ambassadors’ social channels can link to their Revolve storefronts, and they can also receive commissions and exclusive incentives like early access to new brands and participation in #RevolveAroundtheWorld trips and the Revolve Festival. Additionally, four ambassadors from four follower count tiers who drive the most sales from their links will have a chance to create their own Revolve capsule collection, giving influencers an incentive to engage with the program. And considering that influencers / online celebrities are the most-trusted public figure group among Gen Z, Revolve’s ambassador program could be an ever bigger boon for a brand that is already winning over young shoppers. Revolve notes that ambassadors can create customized landing pages that mimic storefronts where they can add “favorites” and curate products around specific themes. To connect with its loyal fan base, Revolve is rolling out the Brand Ambassador program to allow existing consumers to act as influencers for the brand and receive rewards and prizes for engaging with their favorite brands / products. ![]() A fan favorite among influencers, Revolve sells clothing from over 500 brands and more than 20 owned brands, and the online retailer is growing fast as it solidifies its position in the fashion influencer space. Revolve is tapping its loyal consumer base to become micro-influencers for the fashion brand.
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