This week, we take a look at P180, the apparel investment firm that just acquired a minority stake in Altuzarra, and its mission to help luxury and apparel brands achieve that elusive return.
Brendan Hoffman, former CEO of Vince, and Christine Hunsicker, founder of rental and e-commerce platform Caastle, are leading apparel investment and retail with a simple but lofty goal: to help apparel brands achieve profitability. Founded company P180.
P180 is being pitched as a general investment company and a way to connect brands and retailers with Kastle. The company’s first venture was in May in luxury retailer Elise Walker, followed by the announcement this week of its first brand investment in Altuzarra.
P180 on Tuesday announced a minority stake investment in Altuzarra, taking over the management of Altuzarra’s e-commerce business, which has been relocated to Kasur, and adding rental options for Altuzarra’s clothing and accessories.
Joseph Altuzarra told Glossy that while he knows DTC and e-commerce are important parts of the business, his small team limits the growth Atluzarra can drive without outside help. Ta.
“We think P180 will accelerate our growth,” he said. “We didn’t have DTC and e-commerce expertise, and we knew that would limit our growth.”
Part of P180’s pitch to brands is a focus on profitability, something investors in the fashion industry are now much more focused on than they were a few years ago due to rising interest rates. But for many brands, even in a relatively high-margin sector like luxury fashion, achieving profitability is a difficult prospect.
P180’s solution is to increase the monetization of all clothing by focusing on rentals.
“The metrics we’ve used for decades to measure retail success are changing,” Hoffman said. “Smooth, instantaneous price comparison[on smartphones]didn’t exist 15 years ago. If something is marked down somewhere, it’s marked down everywhere. One of our main goals is about capturing back margin, and extending the monetizable life of a product through rental is one way to do that.”
Jessica Devoret, global head of growth at Kastle, said rentals have many knock-on effects that help improve profitability beyond the revenue generated by rentals. For example, luxury brands often have best-selling core styles that remain the same season after season, while trend-driven products may or may not be a hit in a given season. However, with rentals, customers are more comfortable taking risks on trendier clothing because they only pay to wear it a few times.
“Rental is just one part of it,” she says. “Rental supports all other channels. By offering rentals, we can keep our products discounted for longer. We can take risks creatively. We introduce our brand to people for the first time. And we find that when brands drive rentals, they drive more sales to their e-commerce channels.”
The P180’s entry into the market comes at a time when even major luxury brands are struggling with profit margins. Burberry, for example, announced a 40% drop in profits in May. LVMH’s profits fell by 8%, while rival Kering’s profits fell by 50%. Although the luxury goods industry remains in recession due to a shrinking Chinese market and rising interest rates in the United States that are squeezing profit margins, companies like P180 that focus on profit will continue to be valuable.
Over the next two years, Hoffman plans to add more brands to P180’s portfolio, with a particular focus on apparel monobrands rather than retailers like Elise Walker.
“The brands we’re looking at are Joseph (Altuzarra) peers,” Hoffman said. “These are brands with growth potential, the kind of brands that would be sold in places like Neiman Marcus. Even before the partnership with Altuzarra was announced, they were brands that wanted to work with us. We’ve had some interest, and now we’re getting a lot more interest.”
This week’s statistics
12.7%. That’s how much Brunello Cucinelli’s revenue rose in Thursday’s earnings report. Cucinelli was one of the few luxury brands to report a profit last month, while entire industries including major luxury conglomerates such as LVMH and Kering, independent brands such as Burberry, and the Swiss Watch Industry reported declining sales. I am doing it.
CEO Brunello Cucinelli said the growth was due to the brand’s focus on its high-end customers and its most loyal customers.
“Our excellent results for the first nine months of this year are due to strong sales of our Fall/Winter 2024 collections, and this is just the beginning for these collections,” he said on a conference call. “We’ll have to see if people like them, but if people don’t, there’s not much we can do at this stage. But people rate them very highly. This and our continued commitment to the best in craftsmanship, we can confidently maintain our revenue growth forecast of approximately 10% in 2024.”
Other luxury news you need to know
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Mr. Shane is inching closer to an IPO in London
