Cuyana Completes Financing "Next One Billion Dollar Level Fashion Brand"?

Recently, the US emerging fashion brand Cuyana, which started from the Internet, has announced a $30 million growth equity investment from Florida private equity H.I.G. Growth Partners and d.Luxury Brands, which is one of the largest round of financing completed by the fashion retail companies launched by women.

Cuyana was founded in 2013 by Karla Gallardo and Shilpa Shah. It is mainly designed for women to provide costumes and accessories with high cost performance. Among them, garments are priced at different US dollars in different styles, and the unit price of leather handbags is in the range of US $95~650. Cuyana adheres to the philosophy of "Fewer (better)". Each product is made from carefully selected high quality craftsmen from Europe, South America, China and the United States.

Karla Gallardo graduated from Brown University (Brown University), majoring in Applied Mathematics, and later studied Stanford (Graduate School of Business) of Standford business school. She worked in the investment banking department of Goldman Sachs, and served as a strategic and operational analyst for Apple Corp's e-commerce business. The vision of Karla Gallardo is to establish a global design company to stimulate people's purchase intention through the design of sincerity.

Another co founder, Shilpa Shah, graduated from University of California at Berkeley's UC Berkeley Haas School of Business, and has over 15 years of experience in designing web pages and mobile interfaces for Fortune 500 companies, such as Disney, AT&T and Sun Sun.

In order to practice the concept of "less and better", Cuyana also launched the "Lean Closet" action to encourage users to seriously clean their closet and make the best use of it. When customers check out Lean Closet, they receive a linen bag, put the rejected clothes in the bag and send the bag back to Cuyana, who is responsible for donating these old clothes to charity. The credit points that can be exchanged for $10 per donation per customer can be used in the next purchase of Cuyana products.

Cuyana started from the pure Internet brand (just like the Internet eyewear brand Warby Parker and the Internet menswear brand Bonobos). Now it has expanded its business to physical retailing, which now has 5 entity stores in the United States.

When the Internet brand is just beginning to appear, people think that if you want to become a successful brand facing the consumer, you must focus on the line. But Karla Gallardo says that she knows the entity business is also essential for brand building. Therefore, the company has conducted a comprehensive study of the retail format, and has finally set up a permanent physical store in some markets after testing the flash shop.

Cuyana is focused on developing small but loyal customer groups, which are similar to the start of the Internet beauty brand Glossier, and rely on oral communication and social media user communication to achieve organic growth. With flexible supply chain management capabilities and vertical integration of all channel businesses, Cuyana has achieved strong growth. In announcing the financing, Cuyana also said that it had already made profits.

Although Cuyana did not disclose sales figures and exact growth rates, the company plans to expand the number of its stores to two times before next year (although most of its sales are still online).

Cuyana plans to use this fund to expand product categories, expand the scale of stores, find more manufacturers' partners and increase marketing efforts.

The joint CEO Ben McPherson of chairman of H.I.G. Growth Partners John Kim and d.Luxury Brands believes that because the new generation of consumers aged 35 and below share the same values with the Cuyana company, the brand will have great potential for development in the future and bet that it has the potential to become the next one billion dollar fashion brand.

John Kim said: "although the brand awareness of Cuyana is relatively low in the target audience, it has great potential to attract new customers, according to the conversion rate and repeat purchase rate we have seen. Cuyana has established a family style, word of mouth system for customers, and customers will recommend it to their families and friends voluntarily after buying the brand, which fully proves the quality of the brand product and the significance of the brand to the customer. In addition to the strategy of paying through digital marketing, which has already been implemented, Cuyana will continue to work with loyal customer communities to further enhance brand awareness, especially in the market of physical stores. "

Ben McPherson explains how Cuyana brand founders can achieve growth while maintaining a strong long-term vision: "it is quite unusual for the company to make profits in the current market environment. To a certain extent, this is attributed to the company's team avoiding the low profit margins caused by wholesale channels, focusing on direct selling products to consumers, while ensuring strong digital capabilities and maintaining close cooperation with manufacturers. "