Revolve Group Inc.’s growth playbook for 2025 may sound like more of the same, but it underscores the fashion house’s large runway for expansion.
The owner of retailers Revolve and FWRD, along with a growing list of owned brands that includes the recently acquired French fashion label Alexandre Vauthier, ended the fourth quarter and year on a high note.
Net sales in the fourth quarter jumped 14 percent to $293.7 million. Sales growth was seen at both Revolve and FWRD. Meanwhile, companywide net income spiked 237 percent to $11.8 million.
FWRD’s performance was notable as it marked a return to growth after seven quarters of volatility and contraction.
The company’s FWRD Renew pre-owned handbags selection about doubled sales in the quarter in comparison to the year-ago period.
“In early 2024 we talked about the disruption of the luxury e-commerce market on the heels of two distressed sales of large competitors in late 2023,” co-founder and co-CEO Michael Mente told analysts Tuesday afternoon. “As a profitable company with consistent cash flow generation, we saw an opportunity to benefit from this industry turmoil by investing in the luxury segment while others seemingly had no choice but to cut back.”
Mente, along with co-founder and co-CEO Mike Karanikolas, own about 45 percent of the business and have long-touted Revolve Group’s successes due in part to the owner-run mentality.
For the full year, Revolve Group’s 2024 net sales rose 6 percent to $1.1 billion. Companywide net income in 2024 was $48.8 million, up 73 percent.
Revolve, the much larger division, drove the overall business for the year with a 7 percent increase in sales to $970.5 million.
FWRD sales for the year were off 3 percent to $159.4 million.
The Right Mix
The company spent much of last year getting its assortments right and making improvements to its online merchandising, according to Mente.
Those moves helped push full-price spending, which accounted for about 82 percent of overall sales last year. The share reflects a three-point increase from 2023.
The company aims to continue that momentum this year with assortment expansion one tactic.
Part of the merchandising strategy has been the online shop-within-shop concept Revolve has mastered. That is, the company has done well creating curated assortments, whether it’s the Festival Shop that launched earlier this week or the Ski Shop. The latter notched an 850 percent increase in year-over-year sales in the fourth quarter.
The performance is giving the company confidence it can further expand in beauty, which has more than quadrupled over the past five years, in addition to men’s, home and upscale basics it categorizes as premium essentials.
Those essentials have been edited and merchandised online into the Foundations Shop on both Revolve and FWRD.
“It’s still early, but the merchandising looks fantastic and has begun to fulfill our customers’ desire to shop on Revolve for their everyday wardrobe needs, including for fall fashion and colder weather styles that were strong growth drivers in the fourth quarter,” Mente said of Foundations.
Two brands on FWRD liked the concept so much, they asked to also appear in Revolve’s Foundations Shop, according to the CEO.
Revolve Group will also look to continue growing its portfolio of company-owned brands. That group made up about 18 percent of 2024 sales, but that’s “well below its long-term potential,” according to Mente.
Early Days: Brick-and-Mortar
Revolve further flexed its investment ability by announcing to the markets in the lead up to its earnings results plans to make its store at The Grove a permanent door.
The company will begin construction on improvements to the two-story space next month, with plans to reopen in the fall. Once open, it will be the company’s second store after the one-year-old Aspen shop.
The Los Angeles location originally opened as a holiday pop-up, serving as a test for the company. Per the Revolve playbook, the company hosted several events with high-profile appearances from FWRD Creative Director Kendall Jenner, Cardi B, Nicole Richie, Elsa Hosk, Megan Fox, Dwayne Wade and Shay Mitchell.
The physical stores have helped boost online sales from markets close to the two locations. Company-owned brands also account for a greater percentage of overall sales in physical stores than online, according to Mente.
“We are very early in our physical retail journey, and we are continuing to test and iterate with the invaluable learnings gained so far,” Mente said. “I am confident that we have a clear path for improvement as we pursue our physical strategy.”
To that end, Mente said the company plans to hire a “senior leader with deep industry experience” to help the company grow physical retail in the long-term. That individual will begin with a focus on Los Angeles, Mente said.
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