Designer Wardrobe chief executive Ruby Morgan, with co-founders Aidan Bartlett and Donielle Brooke.
Designer Wardrobe chief executive Ruby Morgan, with co-founders Aidan Bartlett and Donielle Brooke.
Online fashion marketplace Designer Wardrobe has completed its latest fundraising round, securing $1.9 million in equity to invest in rental inventory.
The Auckland-based peer-to-peer sales and clothing rental business will use the funds, the majority raised by existing shareholders, to buy new designer clothing to expand its range. Over thenext three years it plans to triple its portfolio of dresses to around 6000 options.
Designer Wardrobe chief operating officer Aidan Bartlett said the company easily secured its initial target of $1.5m. Earlier this year the company raised $600,000.
The "capital-hungry" business posted annual revenue of just over $1m in the last financial year but is on track to double that this year, Bartlett told the Herald.
Serial entrepreneur Shane Bradley is the company's largest shareholder, owning a 16.4 per cent stake. Bradley founded NZME-owned GrabOne, Neighbourly and IdeaHQ.
Designer Wardrobe chief executive Ruby Morgan, who started in the role in January and is the sister of Trade Me founder Sam Morgan, said the majority of capital would be used to purchase new clothing for the growing rental side of the business.
The rental side of the business makes up around half of revenue for the company, which also operates a second-hand marketplace. It takes an almost 10 per cent commission cut of any sale made on its platform.
"The rental business is relatively new, it's only two years old, so we're continuing to invest in that; getting more inventory, marketing and rolling out new initiatives," Morgan said.
These initiatives include a rental subscription service, and upsizing its Auckland store located in Grafton. The company was also looking at opportunities to open a second store in Wellington to support growth, she said.
The second-hand side of the business was experiencing year-on-year growth, and with sales in excess of $100,000 each week, Bartlett said.
"It's all part of the macro trends that we are seeing globally of a shift towards pre-loved versus new and of course reuse and recycle as a wider [movement]," he said.
Designer Wardrobe hopes to triple its portfolio of dresses in the next three years. Photo / Supplied
Second-hand fashion is forecast to surpass fast fashion by 2028, according to Bartlett, who said 10 per cent of all retail sales were set to be resale by 2022.
The US resale apparel market is projected to be worth US$41 billion by 2022, according to a report from thredUP, an American resale retailer.
"Fast fashion is rapidly declining whereas we're seeing double-digit growth with pre-loved."
Designer Wardrobe has about 180,000 regular users on its platform, split between New Zealand and Australia.The company strived to tackle the issue of fast fashion and to minimise the impact that the global industry had on the environment, Morgan said.
The company would refocus its efforts on the development of its online marketplace in the new year, she said. "Now that we've seen how popular it is and the growth we are getting from it organically, we are going invest more into the app and the platform so we can support more users."
