Revolve Group’s hearty footprint at its newly opened The Grove store could prove the shot in the arm for multi-brand retail as some competitors continue to limp along.
The Cerritos-based company’s nearly 8,500-square-foot, two-level store features its Revolve and FWRD brands, spanning apparel, beauty, men’s, accessories, footwear and home. Its an assertion of the company’s successes so far in physical retail as it looks to continue riding that wave with further store expansion, partially fueled by the successes of its exclusive, company-owned brands.
Revolve Group co-founder and co-CEO Michael Mente called the company’s newest store – second to its Aspen location – symbolic of a “new era” for the company.
The sentiment comes at a time when the luxury retail landscape is a struggle for some.
The founders of Canadian retailer SSENSE narrowly bypassed a bankruptcy sale when it was announced over the weekend its founders would keep control of the business. Meanwhile, bankruptcy rumors are circling closer to Saks Global, which some reports have said could file for reorganization as early as Tuesday.
The landscape has left Revolve a runway to expand. Executives have said as much on multiple occasions to analysts during the company’s quarterly updates.
“Adding to the industry malaise, luxury brands large and small, have been frustrated by extended payment terms from a prominent luxury department store chain in the U.S., which has been reducing investment amidst declining sales and significant debt obligations,” Mente told analysts in November during the company’s most recent earnings call. “We continue to view these challenges within the luxury sector as an exciting opportunity for Revolve and FWRD to remain on offense and invest in market share capture, supported by our consistent profitability and cash flow generation that sets us apart.”
Competitive Advantages
One of the group’s greatest strengths is that it not only continues to leverage its consumer data from years in the e-commerce business, but it’s also a manufacturer with a growing roster of brands that includes Sofia Richie Grainge (SRG), Helsa and Eaves among several others.
Distribution of those labels are unique to Revolve and FWRD.
In the meantime, Revolve Group is dabbling in the luxury resale game with FWRD Renew a shoppable part of the merchandise mix at The Grove store. FWRD Renew consists of authenticated pre-owned bags located on the second level of the store.
FWRD, while still a smaller business than the company’s namesake, is growing.
The luxury division grew sales 3 percent in the quarter ended Sept. 30 to $41 million.
Revolve, by comparison, generated sales of $254.6 million in the same quarter, which was up 5 percent from the comparable period a year ago.
Shares of the fashion house, with a recent market cap of $2.2 billion, were trading up less than 1 percent on Tuesday to $30.89.
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