Online outlets – Growing in Europe


What is fashion? Some say it’s what goes out of fashion…

So what do fashion companies do with the clothes that are out of fashion? They have to find other ways to sell them and that’s why in the last years we have seen the emergence of so many ‘outlets’ where you can buy last year’s Prada, Diesel, Nike or Armani collections with discounts of up to 70%.

The problem is that the Prada outlet is just outside Florence in Italy, the Nike outlet near Barcelona is still 50km away. So this is why there’s recently been a surge of online outlets. The proposition is the same, discounts of up to 70% but with the convenience of the internet. Florence is a fantastic city, and Tuscany is even better, but it’s a slightly expensive way to save 200 Eur on a jacket.

So online outlets are growing fast… and are hiring a lot. I believe these are going to be pretty solid companies and what they do is pretty cool. Like any online marketplace they need products and buyers.

They contact fashion companies (and actually any kind of manufacturer who has stocks whose value deteriorates quickly like PCs and other electronic devices) to offer them to ‘publish’ their collections on their sites. Then they take pictures of the collections, organize the collections on their site and promote them to their users.

On the other hand they need to be very good at attracting users: the more buyers, the easier it will be that Armani will be willing to advertise their products. The more Armanis, Nikes, Toshibas and the more reasons users will have to keep coming back…  and tell their friends about it.

The one that has the largest user base (more potential clients) wins and can even avoid the costs of logistics (storing and shipping products) telling manufacturers to send the products directly to the buyers (faster and cheaper).

Also, this is a pretty solid model for a crisis as people are even more receptive to large discounts.

This is happening all over Europe:

– In Spain the leaders are http://www.privalia.com . It’s a company that went from 5 people in 2006 to 300 people today. They had sales of 7 million Euros in 2008 and are growing very fast. They send at least one email per day advertising new or upcoming collections. They are currently expanding around Europe. It’s a good moment to join!

– The other guys in Spain are http://www.ofertix.com . Founded by a former Privalia manager, they are focusing more on the international expansion.

– In France there is a dominant player (www.vente-privee.com) that is also expanding across Europe. These guys are already very large, they had revenues of over 500 million Euros in 2008. They started opening offices in Europe in 2007 and now are present in Spain (Barcelona), UK (London), Italy (Milan) and Germany (Dusseldorf). There are 1000 employees, the average age is 31 years-old with people from multiple nationalities. They are planning to hire 300 people in France this year. More info in French here.

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