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Random fashion thoughts

Discussion in 'Streetwear and Denim' started by thekunk07, Aug 1, 2009.

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  1. Fuuma

    Fuuma Well-Known Member

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    It's normal to be critical of industries changing our way of living, there is no inherent positive side to technology. Saying mobile phones turn you into dragons or vaccines don't work is something else and quite dangerous, yeah.

    Now if you think the app-gadget isn't driven by fashion you're just crazy.
     
    Last edited: Mar 4, 2015
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  2. Biggskip

    Biggskip Well-Known Member

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    I don't understand what you mean by this comment.

    Are you saying the phenomenon where people buy smart phones and pay for small pieces of software to install on said phones is a fad? And that the entire future of the U.S. based technology industry is tied to this fad?
     
    Last edited: Mar 4, 2015
  3. LA Guy

    LA Guy Opposite Santa Staff Member

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    You can't say both of these things. Either these technologies are changing our lives irrevocably (I suppose that if the zombie apocalypse comes, mobile will not be such a big deal, but imho, that is a highly unlikely scenario), or they are transient fads. like pet rocks, that will have no real lasting effect other than setting up one or two people up for life.
     
  4. DLester

    DLester Well-Known Member

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  5. LA Guy

    LA Guy Opposite Santa Staff Member

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    And Yoox is worth $1.5B or so. I don't see that as crazy. It has the portal to be the selling portal for *every* small boutique in Europe and the US, and it has a strong presence in both of these very desirable markets. From the service that I've received, their operations are pretty dialed in as well. I think that Farfetch has the possibility of owning a huge part of the luxury market, in a different, but related, niche, as Yoox. There is a lot of money to be made from connecting sellers to buyers. I don't think that that can be disputed. And $100M in potential yearly profits (based on a 10% discount rate) does not seem crazy to me.
     
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  6. indesertum

    indesertum Well-Known Member

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    i have a pair in darkshadow or whatever it's called. i really like the color


    nice nails
     
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  7. Bam!ChairDance

    Bam!ChairDance Well-Known Member

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    In somewhat related news, if you ever see a piece on Yoox and wonder what that piece would look like if it were photographed in a competent way, there's a good chance Far Fetch has pictures of it somewhere in its musty back catalogue.

    I do a google search like this: [brand] [general item category] site:farfetch.com. And it works quite often because, unlike most webstores, FarFetch doesn't usually delete pages of sold out items.

    So now you can sorta contribute to both companies' valuations at the same time! So much fun.
     
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  8. DLester

    DLester Well-Known Member

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    Sure, if it becomes "the selling portal for *every* small boutique in Europe and the US" and achieves the other things you say, then maybe $1b. But that isn't the case currently. Right now people are vastly overpricing them based on hype and potential and the fact that so many tech companies are overpriced.

    Same thing with Uber and its joke valuation. The smart money got in early.
     
    Last edited: Mar 4, 2015
  9. Biggskip

    Biggskip Well-Known Member

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    You and I have had this argument before, but I wonder what percentage of sales the internet comprises for most of these boutiques. Sure if I carried Rick, CCP, and BBS at a boutique in Cleveland, I would probably move the majority of my inventory through e-channels. Most of these boutiques are in major world cities and (I would think) tend to do the majority of their sales in store. I think FarFetch is something that helps to round out a boutiques business model, but by no means contribute a majority of its sales. You also have to remember that the number of boutiques that could use something like FarFetch. Once you get big enough, it becomes more worthwhile to develop your own website to handle sales (SSense, Mr. Porter, etc.).

    As for your $100MM in annual profits, let's assume that their profit margin is 50% which implies revenues of $200MM. I assume their revenues come from charging each boutique a percentage of each sale. So let's assume that percentage is 30%. That would imply that they are taking part in moving just under $700MM in merchandise each year. That seems pretty lofty to me.


    FTFY
     
  10. LA Guy

    LA Guy Opposite Santa Staff Member

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    In an interview shortly before Atelier closed, Karo Steele said that 70% of their sales were online. And this was a store without a webstore. Between LA and NYC, there are some 30 MM people (those are the greater metropolitan areas. The people who live in fashionable areas are many fewer). These numbers are not atypical.

    A small but successful fashion boutique regularly generates $250-500K, gross, on average every quarter. (of course, there are outliers on either side, but those numbers are fairly reasonable. A fraction of gross sales is what would be paid to Farfetch. Farfetch doesn't care about your overhead, It's the same to them if they have one beast of an employee on a tiny store, or a huge, empty store with 5 gossipy SAs (and this happens a lot too). Lets say that Farfetch takes 25% of each sale. I don't know what they take, but seeing that affiliate commissions are typically 2%-10%, in which case the referral source does not actively do anything to make the sale, 20-25% for full service seems somewhat reasonable. That means that a typical boutique would pay, along with fees (I doubt that Farfetch does not have a flat fee+commission structure) say, $50K, or so, based roughly on the above numbers, every quarter. That is $200K revenue on the year, for one boutique. To hit $200MM mark, Farfetch would have to have 1000 such boutiques. Lets go more conservative, and say that they need to have a 2000 boutique client base to make that type of money. That doesn't sound outrageous. At Pitti Uomo alone (and remember that menswear is about 1/10th the size of womenswear), there were 24K buyers attending. It's an important show, but it's just one trade show with a fairly narrow focus. You don't need to capture that much of the market to make serious bank.

    Think about it. In'n'out burger, which is a profitable enterprise, is a multi-billion dollar enterprise. Ralph Lauren makes 7.5B in SALES a year. There is a lot of money to be made in this world.
     
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  11. cyc wid it

    cyc wid it Well-Known Member

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    Shake Shack went IPO.
     
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  12. cyc wid it

    cyc wid it Well-Known Member

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    [​IMG]

    The best part is a lot of the people who have the money won't get the apartment for a variety of reasons.
     
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  13. Coldsnap

    Coldsnap Well-Known Member

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    lawd have mercy.
     
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  14. cyc wid it

    cyc wid it Well-Known Member

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    IIRC those prices are excluding any HOA fees depending on the building. Parking is extra for the ones with garages/spots.

    Some will be rejected based on resume + headshot. Others will be slow to the draw. Etc.

    ETA: most are probably not rent controlled either and won't let you sign a lease more than 12-14 months.
     
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  15. Pangolin

    Pangolin Well-Known Member

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    Anybody here in Madrid? I'm looking for a proxy...
     
  16. Bam!ChairDance

    Bam!ChairDance Well-Known Member

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    Is there any possible reason to request a headshot other than to break fair housing laws?
     
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  17. Coldsnap

    Coldsnap Well-Known Member

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    I'd like to move out to Cali sometime, but at the same time I like where I am. Just had an interview today and did a bit of researching for housing which is closer. I can get a nice 3 bed 2 bath made in 2005 for $150k and it's even next to a whole foods. But alas I understand the appeal of Cali, at least I get to visit San Fran 3x a year and get my shopping bug out of me then.
     
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  18. Biggskip

    Biggskip Well-Known Member

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    I have no doubt that the clothing industry as well as many others are quite large. While Ralph Laruen may make $7.5B a year in sales, how much of that is pony polos sold at Macy's? My point being that while the market for clothing is quite large, I think the market for what I'm going to call "boutique clothing" is a pretty small fraction of that. I'm just not sure that the scale will ever be there in a way that will enable to an entity like Farfech to match to projections that you or I have made.

    For instance, in your post you estimated that it would take 1,000-2,000 boutiques to generate the revenues and profits needed to match the valuation. As of today, Farfetch has 280 boutiques that it is aligned with. And among those 280 I would imagine that most of the "low hanging fruit" has already been plucked (stores that are large enough to move serious merch, but who don't want to spend resources on their own webstore). So Farfetch has triple to quadruple (at a minimum) the number of boutiques they do business with and those boutiques will have to be of the size and scale of Farfetch's current "store base". I'm not saying it's not possible, but I think it would be pretty difficult.
     
  19. LA Guy

    LA Guy Opposite Santa Staff Member

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    I think that you are severely underestimating the number of boutiques that exist. I would bet that there are hundreds of eligible boutiques in LA alone. Think about it. 24K buyers at Pitti Uomo alone. And if you go and canvas the "good" stores in say, NYC, you'll find that most of them didn't even attend.

    And a lot of those stores already on Farfetch actually have webstores...
     
    Last edited: Mar 4, 2015
  20. noirwest

    noirwest Well-Known Member

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    rft: Driving manual in in qasas is unexpectedly awkward.
     
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