GP Bullhound Research / Online Fashion / May 2013

Online Fashion
WHICH BUSINESSES WILL MAKE THE CUT?
From Boo.com to $5bn+ Exits for Investors
Despite much scepticism that initially surrounded the migration of the fashion
vertical to the online channel, at $41bn it is now the second largest and fastest
growing e-commerce category in the US. The sector has yielded some of the
best returns in the Internet space for investors, for instance Net-a-Porter and
YOOX. It is our belief that a second wave of businesses will drive further
lucrative exits.
No “Amazon” for Fashion Drives Opportunities
Strong association with fashion labels rather than apparel items makes it
difficult for a single online destination to cater to all audiences. Instead, the
ecosystem is becoming increasingly complex with the number of apparel sites
up by a staggering 126% year-on-year.
New Models Challenging the Old Guard
With increased confidence in the Internet channel, inventory light models such
as marketplaces have emerged, bringing independent brands and boutiques
directly to the consumer. We view luxury P2P in particular as one of the key
growth verticals. The Internet has also been an effective launch pad for
vertically integrated pure-play online labels – with exclusive collections these
sites may be a potential threat to the established online department stores.
Big Data Defining Trends
With complex product descriptions and an overwhelming volume of brands,
the fashion industry is lacking the taxonomy necessary to help retailers
organise their merchandise for consumers and understand the key market
trends. Our view is that new data-driven models will redefine the industry.
“Unfashionable” Companies Desperate to Enter the Fray
Exit trends are shifting from consolidation strategy to acquisitions by
businesses outside the apparel and e-commerce spaces, as the sector is
perceived to be a high growth and profitable opportunity. New entrants, such
as media groups, supermarkets and generalist retailers, are pushing up
valuations. We review the major investment trends and potential exits.
MANISHMADHVANI
manish.madhvani@gpbullhound.com
London: +44 207 101 7567
SASHAAFANASIEVA
sasha.afanasieva@gpbullhound.com
London: +44 207 101 7569
INDEPENDENTTECHNOLOGYRESEARCH
SECTOR UPDATE  MAY 2013  DIGITAL MEDIA
Important disclosures appear at the back of this report
GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority

Table of Contents
Introduction......................................................................................................................................... 2
Apparel – Attractive Category .................................................................................................. 2
Social Nature of Purchase Drives Strong Social Media Engagement ..................................... 2
Democratisation and Globalisation of Trends .......................................................................... 3
Fragmentation due to Market Idiosyncrasies ........................................................................... 4
Traditional Brands Late in Digital Implementation.................................................................... 4
Ecosystem Becoming Increasingly Crowded........................................................................... 5
Shopper Engagement Evolution......................................................................................................... 7
Brand Building is Critical .......................................................................................................... 7
Fashion is Media ...................................................................................................................... 7
Social Shopping........................................................................................................................ 8
On the Go – Capturing Users on Mobile is Key ..................................................................... 10
Supply Chain Distribution ................................................................................................................. 11
Pure-Play Online Labels......................................................................................................... 11
Niche Selection....................................................................................................................... 11
Inventory Light – Marketplaces .............................................................................................. 12
Offline – Online Convergence ................................................................................................ 12
Model Behaviour............................................................................................................................... 14
Monetising Discovery ............................................................................................................. 14
Subscription – Not Viable for Fickle Users............................................................................. 14
Luxury – No Longer Members Only ....................................................................................... 15
Collaborative Consumption – Return of Vintage.................................................................... 16
The Feedback Loop.......................................................................................................................... 18
Stock Cycle Management ...................................................................................................... 18
Big Data: Unravelling User Behaviour and Market Trends .................................................... 18
Virtual Fitting Rooms .............................................................................................................. 18
Investment and Acquisition Dynamics.............................................................................................. 21
Growing Investment in New Business Models – Is there a bubble?...................................... 21
Investment Shifting to Vertical Specialists and Marketplaces................................................ 21
Exit Predictions....................................................................................................................... 22
Selected Company Profiles .............................................................................................................. 24
This reports looks into the latest trends in the online fashion market, following on from our first research
coverage of the sector in October 2008. The first section provides an overview of the development of the
market. We then look at the changing behaviour of consumers online and how apparel sites are addressing
this with new engagement methods. The next section assesses how the supply chain has been impacted by
new online fashion business models. The fourth section examines new business models that have established
differentiating ways to engage with the consumer, while the next assesses new B2B business models. In the
sixth section, we reveal our views on the latest investment and exit trends in the online fashion segment.
Finally, we profile some of the most promising players in the space.

GP BULLHOUND ONLINE FASHION – WHICH BUSINESSES WILL MAKE THE CUT?
2 GP Bullhound LLP
INTRODUCTION
Apparel – Attractive Category
The apparel e-commerce vertical has overcome many challenges to become one of the most lucrative sectors
for investors and entrepreneurs alike. Since the shaky early boo.com beginnings in 1998, its online future has
been frequently questioned: will users ever feel comfortable to purchase fashion items without trying them on;
will brands ever allow their products to be sold outside of the carefully curated shop environment? Despite
being perceived as one of the least suited verticals for online consumption it has become the second largest
e-commerce sector after computer electronics (18% of total e-commerce), and the fastest growing in the US
1
.
Forecast to reach $73bn in market size by 2016, it will contribute nearly a quarter of total e-commerce growth
in the US between 2012 and 2016
1
. With achievable gross margins around double that of consumer
electronics, and the fact that it has become one of the first product categories to attract the luxury brands en
masse, it is of little surprise that exits in excess of $5bn have been achieved over the past four years
2
. It is our
belief that innovative new models in the online fashion sector such as marketplaces (including peer to peer
luxury), tailored fashion, prescription and eyewear, as well as fashion data analytics, will drive further high
profile exits.
EX H I B I T 1 – US MA R K E T SI Z E A N D CU M U L A T I V E AN N U A L GR O W T H B Y E-C O M M E R C E VE R T I C A L
Source: eMarketer, September 2012; GP Bullhound analysis
Social Nature of Purchase Drives Strong Social Media Engagement
Online fashion content is one of the most engaging segments within e-commerce and highly integrated within
the social sphere. In an analysis of visitors to apparel and Facebook sites, ComScore found that c.40% of
Facebook’s audience visit apparel sites versus 30% of overall online audience, which implies that a Facebook
user is 33% more likely to visit an apparel site than the average user. Furthermore, the shared audience
between apparel and Facebook sites is 98m visitors
3
.
1
Source: eMarketer, September 2012
2
Source: Capital IQ; GP Bullhound analysis
3
Source: ComScore Media Metrix, Europe, May 2012
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Computerand
consumer
electronics
Apparel&
accessories
Books/music/
video
Auto&parts
Furniture&
homefurnishings
Health&
personalcare
Officeequipment&
supplies
Toys&hobby
Food&
beverage
Other
2012-16CAGRinmarketsize
Marketsize($bn)
2012 market size 2016 market size 2012-16 CAGR

3 GP Bullhound LLP
EX H I B I T 2 – CR O S S -VI S I T A T I O N A C R O S S FA C E B O O K .C O M A N D AP P A R E L SI T E S – UN I Q U E MO N T H L Y
VI S I T O R S (MA Y 2012)
Source: ComScore Media Metrix, Europe, May 2012; GP Bullhound analysis
Democratisation and Globalisation of Trends
If before, high-end trends would take time to trickle down to mass market level, product trends are now shared
across every segment of the industry, and selling out simultaneously across each segment too. An illustration
from EDITD data analysis shows how the printed trousers trend in March 2013 was evident across the entire
apparel price range. “Mainstream adoption of social media and the ease of access to the Internet have
caused this democracy of trends…the average consumer is more informed about trends in fashion
and their demand for newness, paired with the industry's ability to manufacture, swiftly results in
high-end trends hitting mass market at the same time” Julia Fowler, EDITD
4
.
Online fashion is also truly global. Newly launched sites are able to reach an international audience and
leverage worldwide trends and influences. “Thanks to the evolution of the web and the social media
revolution, fashion is now much more global than before. There is a global fashion community out
there, and a global zeitgeist,” Jose Neves, Farfetch
5
.
EX H I B I T 3 – IL L U S T R A T I O N : FA S T SE L L I N G PR I N T E D TR O U S E R S
Market segment Price Styles
Sold out
rate
Mass market Up to £65 277 19.5%
Premium market £66 - £200 60 16.7%
Luxury £201+ 55 7.3%
Source: EDITD, March 2013
4
Source: EDITD, March 2013
5
Source: Informilo, January 2013

4 GP Bullhound LLP
Fragmentation due to Market Idiosyncrasies
As we predicted in our earlier research on online fashion (2008), no single “Amazon” for fashion has emerged
globally. While in the UK online fashion department stores like ASOS and Net-a-Porter prevail, in France it is
the private sales player, Vente-Privée, that has become dominant. Much of this has been driven by many
factors, including:
 Different shopping patterns: shopper behaviour varies across regions, making it tougher for
businesses to expand international offerings without significant adjustments. For instance, on the
logistics side, users in Germany are used to catalogue shopping, free returns and ordering several
sizes of the same item to return the unsuitable ones. In the UK, on the other hand, return rates are
significantly lower; however users expect rapid product delivery. These factors have hampered
growth of apparel private / flash sales models, based on stock consignment and longer delivery
times;
 Offline fashion market structure, such as concentration and pricing level of local brands: the
UK has a much higher prevalence of mid-range, high street brands, while in the US, outlet stores are
highly popular within the mid-level offering;
 Audience specialisation: consumers prefer to visit specialised sites, that either address a particular
product niche or audience type. For instance, ASOS and Net-a-Porter will not have significant brand
overlap as they cater for different audiences – there is no benefit to users to access both under one
virtual roof;
 Regulation: in France, Vente-Privée was able to attract numerous luxury brands to its limited time
sales concept, as there are regulatory restrictions on the number of sales days that can take place
through the traditional brick and mortar channel.
It is our belief that the nature of the industry and consumer demand will drive further fragmentation and
personalised sites.
Traditional Brands Late in Digital Implementation
Traditionally brick and mortar brands and retailers, particularly in the premium and luxury segments, have
been slow to develop their online retail channel due to the fear of their offering becoming “lost” and
undifferentiated amongst other retailers on the web. "Many luxury brands have been reluctant to embrace
new technologies as their values rest on craftsmanship and tradition," says Olivia Solon, associate
editor of Wired magazine
6
. Futhermore, there is risk of brand devaluation through losing control of the
consumer shopping environment. Brick and mortar retailers are able to control how the product is presented
and where, whereas in the online environment there are adjacency issues: a full price luxury product can be
retailed next to a product from a lower value brand or one at a discount.
“Big brands like PPR and LVMH are very afraid of pushing the Internet – it’s more of a company
branding strategy which explains the story,” according to Xavier Court, co-founder of Vente-Privée
7
.
For instance, Burberry is one of the more advanced brands in terms of online media campaings ranging from
a bespoke trench coat ordering portal, to live catwalk show streaming; however it generates only 6% of its
revenues online.
The other hurdle for brick and mortar retailers is the complex logistics and customer service required for the
Internet channel. Retailers with significant presence in the catalogue channel have been able to migrate online
6
Source: Independent, 24 September 2012
7
Source: Company information

5 GP Bullhound LLP
more quickly – for example N Brown has over 50% revenues from the Internet
8
, and Otto Group online sales
represent 53% of total multi-channel retail
9
.
Our view is that brands will further develop their presence online, whether through collaborating with existing
portals or establishing their own online activity.
EX H I B I T 4 – E-C O M M E R C E PE N E T R A T I O N I N T H E AP P A R E L SE C T O R , 2012E
Source: Citi Research, April 2013; Company information; GP Bullhound analysis
Ecosystem Becoming Increasingly Crowded
The online fashion space is getting crowded with traditional brands / retailers, e-commerce enablers, and
pure-play e-tailers investing in the sector.
Fashion Brands
Although with some delay, traditional fashion brands have started to focus on their online presence, often
relying on experienced third-party e-commerce services specialists to deliver logistics and customer services.
For instance, YOOX Group launched its whitelabel e-commerce solution to brands, including logistics and
customer care. Now the Group is powering over 30 mono-brand sites, such as Armani.com and Bally.com.
YOOX is now driving 8.3m unique monthly visitors to such sites with a third of 2012 revenues coming from this
segment
10
.
Other brands have been aggressively investing into their online offering and digital branding independently.
Superdry, a leading UK brand focusing on “urban” designs, has announced it will be increasing its focus and
investment in its online store and mobile app to drive sales, as well as barring ASOS from selling its goods in
certain countries. “It’s the most profitable part of our whole business,” says Julian Dunkerton, chief
executive of Supergroup, Superdry’s parent company. “If shoppers go on to ASOS and find Superdry,
I’m happy. But if they tap in Superdry to a search engine and it comes up with another website, that’s
wrong
11
.”
E-commerce Enablers
On the e-commerce enablement side there is intense competition as solutions like eCommera, Shopify,
Magento, and BigCommerce as well as SaaS tools like Mailchimp, RJ Metrics, Shipwire and the rise of
8
Source: Citi Research, financial year 2012
9
Source: Company information, financial year 2012
10
Source: YOOX Group, Q4 2012
11
Source: Financial Times, 21 February 2011
10% 10%
6% 6%
3%
2% 2%
<1% <1% <1% <1%

6 GP Bullhound LLP
Amazon Web Services have made it significantly easier and cheaper for retailers to build and manage e-
commerce storefronts.
Pure Play Start-Ups
Numerous online pure-play start-ups have also emerged in the sector, attracted by market size and growth,
high ticket prices and strong user monetisation: in the past year nearly $1.6bn has been invested in online
fashion start-ups versus $1bn the year before12
.
Increased Competition
Online apparel industry is becoming increasingly crowded with the number of apparel sites growing by 126%
year-on-year while traffic to the sector overall has grown only by 7% in December 2012 versus last year
13
. As
a result, there is increasing competition for online users, and apparel suppliers have more choice than ever of
online retailers to partner with. The sector is continuously reinventing itself through new ways of acquiring and
engaging with audiences and operating within the supply chain, stemming both from new start-ups to
traditional and online businesses launching or recreating their existing e-commerce offering.
EX H I B I T 5 – TO T A L AP P A R E L WE B S I T E S A N D UN I Q U E MO N T H L Y VI S I T O R S RE P O R T E D B Y CO M SC O R E
(EU R O P E )
Source: ComScore, 2013; GP Bullhound analysis
With this flux in the online fashion sector, we believe businesses will increasingly be evolving to maintain
competitive differentiation.
12
Source: Capital IQ; GP Bullhound analysis; Note: excludes transactions with undisclosed values
13
Source: ComScore, 2013; GP Bullhound analysis
100
105
110
115
120
125
130
135
0
500
1,000
1,500
2,000
2,500
Uniquemonthlyvisitors(m)
Numberofwebsites
Websites reported by ComScore Traffic reported by ComScore

7 GP Bullhound LLP
SHOPPER ENGAGEMENT EVOLUTION
Brand Building is Critical
Users are unlikely to search for specific products online, unlike with electronic appliances or books, as they
have a strong association with the brand itself rather than the product item. As a result, attracting users is less
straight forward than investment into online acquisition marketing, such as search engines, price comparison
websites or affiliate advertising. Retailers need to be differentiated from competition through curation and
relaying the relevant brand story to their audience. Whether brick and mortar or online, retailers with significant
product overlap differentiate themselves through their retail environments and brands (for instance, Harvey
Nichols, Harrods and Liberty have very different branding and retail spaces). If in all retail categories building a
brand is key, in fashion it is crucial to survival.
Using sought-after fashion labels for promotion has also been highly effective and online apparel retailers
have focused on building these relationships: for instance, ASOS launched Fashion Finder, a service that
publicises the brands it does not sell in order to promote itself as a “fashion destination” rather than just a
store. Similarly Vente-Privée used the power of the brands retailed through its flash sales to drive dramatic
member-get-member growth without any spending on search engine marketing in France from 2003 onwards.
Members grew from c.41 thousand to 18m during the decade to 2013 – a growth rate of 85% per year
14
.
Celebrity endorsement has also been a highly effective driver, with new businesses such as Stylemint
adopting celebrity ambassadors to promote their brands.
As the competition in online apparel intensifies, successful players need to adapt their offering and brand to
entice users away from competitors. We identify the key must-haves as content, social and mobile.
Fashion is Media
As Net-a-Porter has shown, editorial content is highly effective in engaging audiences and establishing a
brand, subsequently the online magazine / store format has emerged as one of the key trends in online
fashion: “If you work at a fashion magazine, your role in life is to guide the reader through the world of
fashion and edit it for them. Why can’t shops do that?” – Nick Robertson, CEO of ASOS
15
.
The convergence of content and commerce is evident from both sides: online magazines such as Harpers’
Bazaar (ShopBazaar) and influential bloggers are introducing storefronts within their sites, as traditional e-
commerce sites are developing online content. Some sites are using several fashion-specific platforms such
as 72Lux that enable e-commerce and magazine integration.
Online content in fashion has been used predominantly to drive user engagement and to message the brand,
rather than merely drive search engine optimisation. Burberry, for instance, had several initiatives such as the
Burberry Bespoke, where users can design their own product with over 12m different variations. Another
Burberry website, artofthetrench.com, allows visitors to post photos of them wearing their trench coats or send
them to relatives and friends. "Honestly it makes no difference at all" how many custom coats Burberry
sells,” says Angela Ahrendts, CEO of Burberry, "It's customer engagement. You want them to engage
with the brand
16
."
14
15
16
Source: Wall Street Journal, 3 November 2011

8 GP Bullhound LLP
EX H I B I T 6 – IL L U S T R A T I O N O F BU R B E R R Y BE S P O K E
Source: Wall Street Journal, 3 November 2011
Other rich media formats have emerged, such as online TV Shopping platform Joyus, which promotes
selective products in short online videos. By offering a service to online customers in a similar way to TV
networks such as QVC, the site drives engagement and conversion to purchase. Furthermore, the in-house
technology platform enables behaviour analysis that can aid brands to understand user engagement and
conversion. In the age where users are ever more demanding when it comes to entertainment from their
mobile and desktop devices, this format is an effective way to differentiate the brand.
Social Shopping
Instagram-esque e-commerce platforms such as Fab.com and The Fancy, with online visual product
catalogues and personalised subscription emails, attribute their phenomenal growth to highly engaging format
and social sharing: 50% of Fab users in Europe come from social sites
17
.
We believe that apparel is one of the earliest adopters of social commerce and will continue to develop: nearly
40% of Pinterest buyers purchased from the clothing category, and jewellery and accessories was the second
most popular category with 23% of customers
18
.
17
Source: Guardian, 9 April 2013
18
Source: Company blog, 17 July 2012

9 GP Bullhound LLP
EX H I B I T 7 – TO P 10 CA T E G O R I E S PU R C H A S E D O N PI N T E R E S T AC C O R D I N G T O US BU Y E R S (MA R C H
2012)
Source: Company Blog, 17 July 2012
Cracking the viral effect is still difficult – it appears that most fashion players are using the social platforms for
brand promotion and customer dialogue, rather than to acquire users. Nevertheless, it gives a more even
playing ground for smaller retailers to establish their brand. Through establishing an effective social media
strategy, online apparel properties are able to engage more with their user base: indeed out of the 25 fastest
growing branded social communities in the UK, nearly half are online fashion and beauty retailers.
In our view much experimentation has yet to be done with social channels, but online fashion businesses are
certainly moving the dial in this sphere.
EX H I B I T 8 – TO P 25 DI G I T A L BR A N D S B Y FA C E B O O K CO M M U N I T Y GR O W T H I N TH E UK
Source: Tamar Brand Love, 2013
39%
23% 22%
18%
14%
11% 10%
8%
6% 5%
Clothingandapparel
Jewellery,handbags
andaccessories
Art,artsuppliesand
hobbies
Home,garden&pool/
spa
Health&beauty
Footwear
Flowers,food,drink&
gifts
Babygear
Entertainment(e.g.
books,music,
instruments,movies,
tickets,etc.)
Sportinggoods
513%
366%350%
194%192%
164%155%147%138%134%121%115%107%105% 93% 86% 75% 74% 73% 67% 63% 58% 52% 48% 47%
Surfdome
Ocado
Missguided
Toolbox
Moonpig
Gorgeousshop
ChemistDirect
Getlenses.co.uk
UKhairdressers
Boohoo.com
FeelUnique
AllSole
OverclockersUK
Mankind
Wiggle
eSpares
SecretSales
Net-a-Porter
Kiddicare
ASOS
NotontheHighStreet
MyProtein
ebuyer.com
play.com
TheUrbanRetreat
Boutique
Fashion and
beauty retail

10 GP Bullhound LLP
On the Go – Capturing Users on Mobile is Key
While there was scepticism as to whether users can effectively select apparel on smaller screens, in fact it is
the top retail category on mobile: over 37% of smartphone shoppers have purchased clothing or accessories
versus 28% for books and consumer electronics
19
. New visual social models such as Joyus, Fab and Fancy
have strongly focused on the mobile channel to ensure higher engagement with users and spontaneous
purchases, particularly through emails: 40% of Fab’s daily logins come from mobile – with iPad users being
especially valuable members (twice the lifetime value of web users) and 10% of all iPad users on Fab convert
to purchase in the first week of having the iPad app. In comparison, established models have some way to go
– large online retailers, ASOS and YOOX have less than 20% of traffic from mobile.
With a growing proportion of audience’s time spent on mobile devices, we believe that developing this channel
will be paramount for online fashion sites.
EX H I B I T 9 – MO B I L E A S PE R C E N T A G E O F TO T A L TR A F F I C
Source: Companies’ information
19
Source: ComScore, December 2012
40%
30% 30%
25% 25% 25%
20% 20%
Fab.com Botticca Lyst ThredUp Etsy Vente-Privée Yoox ASOS

11 GP Bullhound LLP
SUPPLY CHAIN DISTRIBUTION
Pure-Play Online Labels
ASOS, the most visited fashion website on the planet
20
, was founded in 2000 retailing items emulating
celebrity fashion. While it was initially selling third party brands that were similar to outfits seen on screen, in
2004 it launched its own range, which has been critical in driving its popularity and protecting itself from
competitors such as Amazon and eBay. Furthermore, through vertically integrating the value chain, ASOS
was able to offer better pricing to its user base and generate higher gross margins. Today, ASOS offers over
1,000 different brands and 55% of revenues come from its own brand
21
.
One of the main challenges of the “online label” business model is designing a product that is valued by the
target audience and establishing a new brand. Several sites have overcome this by investing in celebrity
endorsement (Stylistpick, Shoemint). Others have introduced user personalisation – such as Shoedazzle,
Gemvara and Send The Trend. There are significant operational complexities with the model, such as building
a strong network of manufacturing partners and significant inventory risks if the products are not sold.
Everlane has focused on a relatively narrow product range of essential items, maintaining full control over the
design and production, and partnering with high quality manufacturers to keep prices affordable. Furthermore,
the site aims to build a community around its products to collect feedback from its user base, currently at
400,000 active members – another way to ensure their designs remain popular
22
.
Our view is that while the online channel is highly effective for distribution, particularly through driving social
communities, the business is fundamentally an apparel label, which requires significant investment in designer
and production talent. Whether selling the items online or through an offline boutique, businesses like
Everlane need to provide fashionable and good quality items. The fact that this is possible through the Internet
with a relatively minimalist business structure presents a threat to traditional fashion labels.
Niche Selection
Efficiently targeted sites are able to differentiate from other sites and establish a loyal customer base with
repeat purchases. For instance several sites are now targeting the male audience – Mr. Porter, Dollar Shave
Club, BrandiD, Menlook, Trunk Club, Outfittery. Not only do these sites reflect male shopping behaviour, but
also different inventory management: assortment is narrower and the key basic articles do not change
significantly from one season to the next.
Vertical targeting also enables more favourable relationships with brands and suppliers – for instance,
Sunglasses Shop’s high-end presentation of the site and product focus enabled them to retail luxury items,
which were previously not sold online. Vertical specialisation may also enhance the site’s position in organic
search and reduce the cost of customer acquisition. Online sports-focused private sales site, Sportpursuit, for
instance, has been able to drive 5x year-on-year growth through strong member-get-member traction within its
community of sports enthusiasts. Moreover we have seen the emergence of luxury apparel sites targeting the
childrenswear verticals with players such as AlexandAlexa, backed by Tiger Global and MMC, and Smallable,
headquartered in Paris, both showing strong year on year growth. Other examples of niche sites include
accessories (Send the Trend, Boticca, MyOptique, Sunglasses Shop), pregnancy wear (Isabella Oliver),
lingerie (Figleaves), denim (SoJeans), sportswear and equipment (Wiggle, Surfdome).
The trade-off between specialist and generalist approaches is that the frequency of purchase may be lower
within a specific category (for example lingerie versus general apparel) and fewer cross-selling opportunities,
20
Source: ComScore, 2012
21
Source: ASOS 2012 Annual Report
22
Source: Techcrunch.com, 13 December 2012

12 GP Bullhound LLP
unlike for an online department store. Online shops such as Zalando have started diversifying into other
categories to increase number of items per order and frequency of purchase. We believe this will also
contribute to consolidation in the sector for businesses that opt for acquisition strategy rather than organic
expansion into new verticals.
Inventory Light – Marketplaces
With a growing number of fashion boutiques, emerging independent brands and retailers both online and
offline, numerous business models have emerged to aggregate and organise the offering. Marketplaces, such
as Farfetch and Boticca, take advantage of global fashion trends and connect their global user base with local
boutiques and brands from around the world. For instance, UK-based Boticca generates 50% of its revenues
from Europe and 30% from the US. On the other hand, Not on the High Street, Kitsy Lane and Modcloth
aggregate local communities of independent and professional designers and cater to audiences that are
looking for unique pieces.
Larger retailers are also following suit: ASOS launched Marketplace, which allows designers to set up
boutique stores on its site, selling their own creations and one-off vintage items, with ASOS receiving c.10-
15% commission
23
. ASOS Marketplace has over 65,000 products listed, 500 boutique sellers from 95
countries, 28,000 individual sellers from 98 countries
24
. An emerging trend of luxury retail online is evident in
the fast growing 1stdibs marketplace, which raised $42m in December 2012, following a series A round of
$60m in 2011. The business sells rare antiques and desirable objects through a network of c.1,700 dealers,
and has tripled its presence in Europe in 2012
25
.
We are convinced that the marketplace model is particularly effective in fashion, where there is significant
retailer fragmentation both offline and online (see Introduction section). The key is to establish strong branding
and liquidity in this winner-takes-all business model.
Offline – Online Convergence
The convergence of offline and online is evident: on the one hand traditional retailers are promoting online
offering as an extra retail channel, as well as a way to improve the service currently offered: for instance,
Burberry offers iPads in-store for users to see what is available but not in stock. On the other hand, online
retailers are also introducing offline presence. ASOS partnered with a number of high street retailer chains as
well as small merchants to provide product delivery and pick-up points. Online sites are opening stores to
further promote their offering. Everlane launched a pop-up Christmas store where users are offered extra
personalisation features, while Trunk Club offers a luxury tailoring service to its members through their
permanent showroom.
Over time there will be deeper integration of the two channels: already 69% of recipients in a recent Nielsen
study claimed the Internet is important in the decision-making process when purchasing new products
offline
26
. Furthermore, apparel is the second most popular category for “showrooming” – examining the item in
a brick and mortar store, but shopping online to find purchase the item at a lower price.
We believe that omnichannel retail, where users view and shop online and offline, will be a major trend – if
before pure-play online was seen as efficient, providing access across several channels is now becoming
critical.
23
24
Source: ASOS 2012 Results presentation
25
Source: Alt Assets, December 2012
26
Source: Nielsen Global Survey of New Product Purchase Sentiment, Q3 2012; Note: based on respondents with
online access only; new products are defined as any product not purchased in the past

13 GP Bullhound LLP
EX H I B I T 10 – CA T E G O R I E S O F IT E M S PU R C H A S E D V I A “SH O W R O O M I N G ”
Source: ComScore, January 2013
Note: represents percentage of men / women who purchase the items via “showrooming” – or browsing in shops and searching for the best price and
purchasing online
8%
18%
21%
22%
26%
39%
72%
10%
15%
29%
28%
29%
47%
56%
Other
Jewellery & watches
Toys
Appliances
Books
Apparel, clothing
& accessories
Consumer
electronics
%of women
%of men

14 GP Bullhound LLP
MODEL BEHAVIOUR
Monetising Discovery
Product discovery in fashion is more complex than in other verticals. Price comparison, text search and
consumer reviews are less relevant: firstly, product taxonomy is not as well developed as in other sectors, and
secondly, users relate much more with the brand itself than the product independently.
There has been much experimentation in the last few years to differentiate from other numerous online
retailers and enable users to discover relevant items:
 Curated approach: where users follow stylists or celebrities to find new items (such as Send the
Trend, Stylistpick, ShoeDazzle, Outfittery) – highly relevant for the fashion vertical, but may be more
difficult to scale as there are only so many customers each stylist can serve. The consumer values
the human touch in the process, and loses interest if the process starts to feel automated;
 Personalised / algorithm based method: where users’ selections are analysed for new
suggestions – similar to that of Last.fm in the music industry (such as Dressipi, Lyst) – classification
and taxonomy of products in the fashion vertical make this difficult as a single tool to use, but over
time this could be viable, particularly as it is combined with social graph data;
 Social: where users share their fashion items with other users, predominantly through photos and
other rich media (for instance Polyvore, Chicisimo, Go Try It On, Pose, Kaleidoscope, StyledOn) –
has been shown to be highly engaging, but amongst a younger audience that does not necessarily
have the spending power. Furthermore, a user may share or like certain products online, but may not
necessarily buy. As a result monetisation has not been clear cut;
 Visual search: impressive image recognition players like Snap Fashion enable users to search for
items by taking photos on the app. While it is still fairly early stage in monetisation, it has the potential
to revolutionise the user experience, as Shazam once did for music discovery.
The models above vary in terms of user engagement and monetisation – for instance, social content sites like
Go Try It On are further away from transactions versus curated sites like Send the Trend. There will be some
convergence to bridge the gap between user engagement, monetisation and scaling, driven by the type of
audience targeted and products sold. For instance, through personalisation and targeting, StylistPick was able
to increase conversion by 33%
27
. Outfittery, on the other hand, is able to offer high stylist involvement,
particularly on the first purchase, as the average basket value is at €300. It can then use a more data driven
approach in subsequent purchases as its algorithm based system learns more about the user. In all cases, we
believe there needs to be an element of human touch: in the fashion industry users require strong curation of
content and offering, which can not be automated.
Subscription – Not Viable for Fickle Users
Subscription-based models effective in digital content sectors (for example Spotify, Netflix) have been
replicated in the e-commerce sector with significant investment to date: over $65m raised for ShoeDazzle
alone. While the model provides better revenue stream visibility, customer churn is an issue, particularly
driven by increasing competition and the difficult task of sourcing relevant, highly sought after products every
month. Furthermore, making the customer economics work is difficult due to higher delivery and return costs
in comparison to those in the digital content sector.
27
Source: Econsultancy, 14 December 2012

15 GP Bullhound LLP
Several sites that were previously subscription based, have pivoted the model to more traditional e-commerce
offering – for instance, Stylistpick and Birchbox. Similarly, Bag Borrow or Steal – originally a subscription
based rental service, is introducing a pay-as-you-go model and a standard e-commerce / outnet offering.
Other models, such as Outfittery and Trunk Club, provide a more flexible subscription plan, where users are
still contacted on a regular basis by the stylists to put together their preferred outfits. The users then pay only
for the clothes they keep upon delivery. High average basket value ensures that the personalised service,
which reduces user churn and returns, can be recouped within the first few orders. The main differentiation is
the “pull” approach of the stylist, where the user requests the items to be sent, rather than the “push”
approach, where products are sent on a regular basis.
EX H I B I T 11 – CL A S S I F I C A T I O N O F SU B S C R I P T I O N BU S I N E S S E S
Source: Company information; GP Bullhound analysis
Luxury – No Longer Members Only
Initially apparel labels were enticed to the online channel by the prospect of shifting unsold stock in a trusted
high-end shopping space. The private sales model in particular, pioneered by Vente-Privée, experienced
tremendous scalability in contrast to the standard outlet model due to:
1) Quick inventory turn-over through flash sales attracting premium brands;
2) Private membership and limited time sales offering brand protection from exposure in search results;
3) Exclusive membership model as an effective marketing tool for attracting loyal customers;
4) High-end brands more comfortable with the private premium shopping environment to conduct sales on
the site.
EX H I B I T 12 – VE N T E -PR I V É E A N D YOOX GR O S S RE V E N U E CO M P A R I S O N
E-commerce
Daily deals /
Private
sales Stylist Subscription
VIP member
/ Loyalty fee Try then buy Rent
Bag Borrow or Steal    
Me Undies  
Outfittery 
Panty by Post   
Shoedazzle     
Stylemint / Jew elmint / Shoemint   
Stylistpick   
Trunk Club    
Key  Current model  Prior model
€0.0bn
€0.2bn
€0.4bn
€0.6bn
€0.8bn
€1.0bn
€1.2bn
€1.4bn
2006A 2007A 2008A 2009A 2010A 2011A 2012A
Yoox
Vente Privée

16 GP Bullhound LLP
The rapid growth of the private sales model has been strongly linked to the local idiosyncrasies: after over 10
years since founding, still around 80% of Vente-Privée’s sales are from France
28
, where there are relatively
low return rates in contrast to other geographies (Vente-Privée’s return rates are below 5% versus 25% for
YOOX’s). Local regulation, limiting the number of sales days in brick and mortar shops, also provides
additional incentive to brands to sell their stock through online sales.
In other geographies, the model has not been as effective. Despite over $240m investment and gross
revenues of over $600m, Gilt has only just reached profitability on EBITDA basis
29
. The business has moved
away from the private sales model to the flash sales concept like Fab.com – users do not need to subscribe to
view the sales campaigns. Furthermore, the company has rapidly diversified into other verticals such as home
ware, food and travel. In the UK, the private sales model has been successful for non-apparel verticals, such
as homeware (Achica), as users are more tolerant of longer delivery times. One the other hand, the existing
luxury apparel retailer, Net-a-Porter, has been able to offload excess stock via its outlet channel: Outnet.com.
Luxury brands and high-end users are becoming more at ease with the online channel: last year online sales
of personal luxury goods reached €6.2bn, growing three-times faster than the total personal luxury goods
market, and are expected to reach €15bn by 2016
30
. It is estimated that 98% of affluent consumers are
shopping online
31
. As this trend continues, the member-only private sales model becomes less relevant, and
other models are starting to have strong traction, such as marketplaces in apparel (Farfetch, The Real Real)
and other luxury sectors (1stdibs). Furthermore, we are seeing the emergence of hyper-luxury offerings online:
Moda Operandi allows their price-insensitive user base to pre-order collections straight from the runway.
Collaborative Consumption – Return of Vintage
eBay was a pioneer and dominant player in the P2P vintage clothing and accessories market, but other sites
are disrupting this segment. Focus on vertical specialisation and creating a luxury environment for users has
proven critical in high-end vintage retail. Sites such as Covetique, Vestiaire Collective, Videdressing, The Real
Real, Byronesque, Vaunte, 1
st
dibs, ensure reliable product authentication and high quality control to promote
users trust, and streamlined logistics for the increasingly demanding customers. Poshmark focuses on the
social element of collaborative consumption where users can view each other’s virtual closets and shop.
ThredUP specialises in children’s clothing, where clothes are of resale quality as children grow out of them
very quickly.
Commissions vary depending on the logistical involvement of the online marketplace – for instance Shop Hers
takes 18% commission but does not take on the production of site content, instead the users are responsible
for creating listings and marketing the items to fellow users. Covetique, on the other hand takes over 37%
commission, but the site takes the pieces in, photographs and checks for authenticity, making it easier and
hassle-free for users to unload unwanted pieces.
As users are becoming comfortable with “sharing” clothes online, the apparel rental market is also moving to
the Internet channel, with Bag Borrow or Steal and Rent the Runway in the US and Wish Want Wear in the
UK. Rent the Runway allows women to rent designed clothes and accessories at 10% of retail price (or from
$50 to $200 for a four night loan). The business has over 3m members and 170 designer brands, and recently
raised $20m funding led by Condé Nast Publications in November 2012, as well as $4m in March 2013 led by
American Express and Novel TMT Ventures
32
. This online rental model requires more complex inventory
28
Source: Bloomberg.com, 29 January 2013
29
Source: Techcrunch.com, 9 December 2012
30
Source: McKinsey & Co, 2012
31
Source: Luxury Society 29 Jan 2013
32
Source: Techcrunch, 11 March 2013

17 GP Bullhound LLP
management and effective offering diversification to maximise orders per user or reduce working capital
requirement, but is viable as users want to recreate red carpet glamour.
Another trend in collaborative consumption is design crowdsourcing (for instance ModCloth has launched this
buyer programme). While this offering is useful for understanding customer behaviour on the site, we believe it
is a not a scalable model as users expect short delivery times, particularly for spontaneous purchases.
Moreover, except for the few true fashionistas, the majority prefer to have the products ready and curated in a
certain way that fits their lifestyle, rather than having to design them.

18 GP Bullhound LLP
THE FEEDBACK LOOP
Stock Cycle Management
Inventory management is a critical factor for online retail in most sectors, but presents added complexity for
the apparel vertical in unsold stock or returns:
 Fashion trends are difficult to project, unlike other product verticals where new product design is
driven by performance and feature improvements (for example electronics);
 Several seasons per year means that the retailers need to manage different cycles of stock,
particularly when their audience is sensitive to how old the stock is;
 Quality of product, such as the cut, texture of fabric and colour are difficult to convey without
physically touching or trying on the item;
 Different sizing standards across apparel labels, styles and geographies.
A number of business models are addressing these problems through compiling and analysing user, stock
and market data to aid retailers who are selling via the online channel.
Big Data: Unravelling User Behaviour and Market Trends
Several of the new generation discovery sites (see Monetising Discovery Section) collect their users’ data to
provide insights to brands and retailers. There is some way to go before these models are fully scaled and
monetised. Complexities arise particularly in the fashion apparel segment, where product taxonomy needs to
be created from scratch. For social data, it is especially difficult to monetise, as those who are more active in
sharing their selections are not necessarily the buyers. Furthermore, many online retailers already have a
formidable amount of data available from their existing users – the question remains whether these databases
can really compete.
Other sites are assessing the data available on the Internet – for instance fashion specific, EDITD, Fashionbi,
as well as general social analytics companies like Social Bakers. EDITD is able to collect and analyse data
from apparel retailer sites, social media, runways and newsletters to deliver fashion analytics to retailers, who
are becoming increasingly mechanised in their product buying and design.
While the use of data will continue to grow and evolve, the human touch is still fundamental to successful
online retail. Retailers still heavily rely on strong buying teams that understand their customers: for example
Nasty Gal buys only limited runs so as not to get stuck with stock that does not move, and sells 93% of its
inventory at full price in an industry that usually marks down a third of all styles
33
. Nevertheless, we believe
that data analytics will revolutionise the industry across retailers of all price ranges.
Virtual Fitting Rooms
One of the key difficulties facing online apparel retailers is the high rate of return of items: in the UK it is
estimated that 60% of consumers order multiple sizes and almost one in three clothing purchases made online
are returned in response to the UK’s lack of standard sizing
34
. Return rates vary depending on type of product
and geography – ASOS reports returns of around 30%, it is closer to 50% for Zalando in Germany
35
.
Estimated costs of returns include the following in addition to the postage and package fees:
 Double visa costs: if the item is shipped from a different jurisdiction and there are import costs;
 Product discount: garments generally take over a month to be returned, resulting in the item being
resold out of season at a discount, resulting in an average value depreciation of 50%;
33
Source: Forbes, 28 June 2012
34
Source: Kelkoo, July 2011
35
Source: Kinnevik 2012 annual results

19 GP Bullhound LLP
 Customer experience: users who are not satisfied with the delivered item are less likely to return to
the site, reducing repeat purchase rates.
In addition to returns, users are reluctant to make purchases online at all as they are unable to try on the item.
According to an Internet shoppers' survey commissioned by Fits.me, 32% of users hesitate when buying
clothes online as they are unsure what size fits them best, and a further 30% as they are unable to try before
buying
36
.
EX H I B I T 13 – RE A S O N S CU S T O M E R S HE S I T A T E W H E N BU Y I N G CL O T H E S ON L I N E
Source: Internet Shoppers Survey, commissioned by Fits.me, July 2011
Several virtual fitting room solutions aim to reduce returns and improve conversion through:
1) Outfit configurations: software to superimpose outfits on models in order to better display the product
for users while minimising production costs (such as My Virtual Model / Mimicme, Looklet). The segment
is already seeing signs of monetisation, as online retail businesses are looking to minimise the costs of
displaying their growing apparel ranges online;
2) Augmented reality solutions: aimed to show the product on a person through overlaying the item on
their image. Agencies such as Holition have developed sophisticated online applications to engage the
user and drive purchase conversion. For instance, when Holition worked with the Swatch Group watch
brand Tissot to enable users to try on a virtual watch from the window in Selfridges, the revenues for the
department store’s boutique increased by 85% during the course of the two week activity
37
;
36
Source: Fits.me commissioned Internet Survey, July 2011
37
6% 6%
10%
30%
32%
16%
Too difficult to
shop on a mobile
device
Slow shopping
times
Difficultly of
return process
Unable to try
before buying
Unsure what size
fits best
Shipping fees
too high

20 GP Bullhound LLP
EX H I B I T 14 – IL L U S T R A T I O N O F HO L I T I O N ’S AU G M E N T E D RE A L I T Y SO L U T I O N F O R TI S S O T
Source: Holition company website, May 2013
3) Size recommendations engines: based on comparison of sizing specifications given by different
brands, to give more guidance to users that are purchasing items from new brands (Truefit,
Clotheshorse). This is not item specific, so does not take into consideration the size variation within brand
collections, but is easiest to scale and implement;
4) Style specific sizing guidance: provides guidance for specific styles but either collecting measurements
from the customer directly (the user inputs their measurements), for instance Fits.me uses a 3D robot to
show the garment fit to the user, or comparing sizes of items (the user inputs the measurements of a
previous garment they have purchased), such as Virtusize.
The free returns standard that has been set by the apparel industry is difficult to reverse (62% of UK retailers
offer free postage and returns
38
). The challenge with the majority of virtual data room services is to encourage
users to commit time to creating their virtual fitting room profile. In order for this sector to take off, online
retailers need to provide an incentive for their users to provide additional data for the virtual fitting room
solution. On the other hand, online retailers themselves may be able to implement an in-house size
recommendation solution based on the returns data compiled from their regular customers, bypassing third
party service providers. As a result, we believe this sector will take time to develop and will be dependent on
the partnerships between retailers and the service providers.
38
Source: Source: Kelkoo, July 2011

21 GP Bullhound LLP
INVESTMENT AND ACQUISITION DYNAMICS
Growing Investment in New Business Models – Is there a bubble?
The last few years have seen an explosion of deal activity: over half of online fashion M&A by volume and
close to half of private placements by both volume and value have been announced or closed in the last
twelve months. While the online fashion sector is clearly hot, we hesitate to call it a bubble:
1) For deals where transaction multiples are available valuations have been modest, typically at 1x to 2x
LTM gross revenues, reflecting the margin profile of retail businesses;
2) Capital has been drawn to new and more innovative business models, showing that the sector remains in
a healthy phase of development;
3) M&A activity has been dominated by bolt-on acquisitions and it is only in the last year or so that there has
been consolidation between online fashion peers, which indicates the sector has plenty of time left to run.
EX H I B I T 15 – VO L U M E O F PR I V A T E PL A C E M E N T S BY TA R G E T TY P E
Source: Capital IQ; GP Bullhound analysis, YTD 2013 as at 30 April 2013
Note: as per date of announcement
Investment Shifting to Vertical Specialists and Marketplaces
Private and flash sales sites put online fashion on the map, but in recent years, like the daily deals and
discount sector, have suffered from low barriers to entry, creating intense competition, depressing margins
and making it hard to differentiate. Players such as Gilt Groupe and Vente-Privée, which dominate the private
sales space in their respective markets, are the exception rather than the rule.
Investors are looking for strong brands which will engage consumers and create a willingness to pay.
Consequently they are continuing to invest heavily in vertical specialist models, which have more specific
offerings, differentiated from incumbents like ASOS and Net-a-Porter.
B2C and C2C marketplaces are of interest due to low inventory risk business models, although to-date these have
comprised a relatively small slice of financing activity. Investors are likely to find C2C models, which connect buyers
and sellers of used and new fashion item, particularly exciting (InstantLuxe – $2.6m raise in April 2013, Covetique –
$20m raise in November 2012, and ThredUP – $14.5m raise in October 2012).
14
36
62
101
16
0
20
40
60
80
100
120
2009 2010 2011 2012 2013YTD
Social discovery
Online label / tailored
Personalised discovery
Unique curated discovery
Private / flash sales
Multi-brand e-commerce
Vertical specialists
Marketplaces

22 GP Bullhound LLP
EX H I B I T 16 – VO L U M E O F M&A DE A L S BY TA R G E T TY P E
Source: Capital IQ; GP Bullhound analysis, YTD 2013 as at 30 April 2013
Note: as per date of announcement
Exit Predictions
Given the high level of financing activity seen over the last few years compared to M&A activity, we believe the
online fashion deal market still has a long way to run.
Key trends include:
1) Online multi-brand stores: a significant number of recent exits have been by traditional department
store-style players, which raised funding at the start of or before the online fashion wave – PriceMinister
and Stylife Corporation to Rakuten, Magaseek to NTT Docomo and Mecox Lane to Sina Corp;
2) Cross-category / vertical specialists: attractive targets typically as bolt-on acquisitions for larger online
fashion or e-commerce players, with Fab.com acquiring FashionStake, Amazon buying Quidsi and
Zappos, N Brown Group buying Figleaves.com, and Kenkou Corporation acquiring Angeliebe, reaping
cross-selling and logistics synergies;
3) Premium / Luxury: fashion is one of the first luxury sectors migrating online, with players like
Matches.com and The Real Real having strong potential exit credentials, and Best Secret received
€200m from AXA Private Equity for a majority stake;
4) Marketplaces: rapidly expanding models that have received significant investment to date are likely to
make attractive acquisition targets – already some strategic investment is taking place (ASOS invested in
Covetique, Condé Nast in Farfetch);
5) Online data: this segment is still in early stages of development, but we see it as a very significant niche
as fashion buyers and designers become more analytical in their approach;
6) Pure online labels: the new wave of vertically integrated online labels such as Everlane will become
highly attractive for large brand acquirers such as PPR, looking to introduce new business models into
their portfolios;
7) Fashion tech: with social and mobile becoming key in driving user engagement, companies that have
proven technology are sought after (for instance Etsy acquisition of Mixel);
8) Buyers from emerging markets: strong interest to bring in Western brands to emerging markets where
consumer spending is on the increase – over 30% of online fashion M&A has been driven by Asian
buyers; Japanese Rakuten, for instance, has both strengthened its domestic footprint and expanded
abroad via three online fashion deals in the last twelve months;
4
9
8
25
12
0
5
10
15
20
25
30
2009 2010 2011 2012 2013YTD
Other
Unique Curated Discovery
Social Discovery
Marketplaces
Private / Flash Sales
Multi-brand e-commerce
Vertical Specialists

23 GP Bullhound LLP
9) Traditional retailers / retail enablers: seeking to shift their business online or acquire online distribution
channels – Net-A-Porter by Compagnie Financière Richemont, HauteLook by Nordstrom and
Brands4Friends by Tengelmann. Traditional non-apparel retailers are likely to look into this segment for
growth – we expect supermarkets and department stores to be acquisitive. Other potential acquirers
could be service providers (for instance American Express investment in Warby Parker and Rent The
Runway);
10) Media players: with growing traction of inventory free models, such as marketplaces and fashion-specific
lead generation players, media companies can gain an additional channel to monetise their existing
audience (for example Condé Nast investment in Farfetch, Rent The Runway and Monoqi, Naspers’
acquisition of Markafoni).

24 GP Bullhound LLP
SELECTED COMPANY PROFILES
Multi-brand retailers
Atelier-To-Go (UK)
Founded in 2012, Atelier-to-go provides users with a highly edited selection of the best mid-high
end contemporary designers. The site is presented as an online magazine through which the
users can purchase items. The company produces all of its editorial content and fashion
features, both in-house as well as through contributing editors and stylists from high end glossy
magazines such as Vogue and Harper’s Bazaar.
Meninvest (France)
Founded in 2010, Meninvest has more than 2m unique visitors per month on its editorial and e-
commerce online destinations. The Group’s flagship online store, Menlook, distributed apparel
for men across more than 80 countries. Meninvest acquired oki-ni.com, UK-based online
menswear retailer. The company has raised over $18m from 123 Venture, AXA Private Equity,
Orkos Capital and Partech International.
Net-a-porter (UK)
Founded in 2000, Net-a-Porter is the world’s premier online luxury fashion retailer, viewed by
over 2.5m women each month. Net-a-Porter pioneered magazine styled design of the website
that users found particularly enticing, setting the trend for content-concentrated approach
prevalent with apparel e-commerce today. Acquired by Compagnie Financière Richemont in
April 2010 for an undisclosed amount.
Zalando (Germany)
Founded in 2008, Zalando initially specialised in selling shoes and has since expanded into
clothing and other fashion and lifestyle products online. The company has raised undisclosed
funding from DST Global, Emesco, Holtzbrinck Ventures, Investment Kinnevik, J.P. Morgan
Asset Management, Quadrant Capital Advisors, Rocket Internet and Tengelmann Ventures.

25 GP Bullhound LLP
Private Sales
Achica (UK)
Founded in 2009, Achica is the leading members-only luxury lifestyle store, offering 72 hour
sales campaigns in furniture, furnishings, kitchenware, fashion accessories, children’s wear and
other categories. The company has raised undisclosed funding from Balderton Capital and DFJ
Esprit.
Sportpursuit (UK)
Founded in 2011, Sportpursuit is the UK’s leading sport flash sales site, selling best sports and
outdoor brands at up to 70% off RRP. In 2012 the site won New e-Retailer of the Year Award at
the e-Commerce Awards for Excellence. The company raised over $2m from DFJ Esprit in May
2012.
Vente-Privée (France)
Founded in 2001, Vente-Privée is the pioneer of the online private sales model in apparel. The
company has worked with over 1,450 brands to provide discounts to its user base of up to 70%.
The business generated gross revenues of €1.3bn in 2012. In June 2007, Summit Partners
acquired a minority stake of 20% in the company at a valuation exceeding €800m.
Unique curated content
Joyus (US)
Founded in 2011, Joyus is an online video platform that helps its users discover new products
and brands through short demonstrations. Each clip shows a single product and are launched at
a rate of 2-3 per day. Categories covered include fashion, beauty, home, lifestyle and food
(through acquisition of Foodzie). The company has raised c.$20m from Accel Management,
Harrison Metal Capital, InterWest Partners, Time Warner Investments.

26 GP Bullhound LLP
B2C Marketplaces
Boticca (UK)
Founded in 2010, Boticca is an online marketplace for unique jewellery and fashion accessories
by top emerging designers from around the world. The boutique aggregates designers from 40
different countries. The company has raised over $2m from DG Incubation and Isai Gestion.
Farfetch (UK)
Founded in 2008, Farfetch is an online marketplace for independent apparel boutiques. The site
does not hold inventory but provides selling and payment services for 250 boutiques to 150,000
customers in 140 countries, spending on average $680 per order. The company’s annual run-
rate is $129m and growing at 150% year-on-year. The company has raised over $23m from
Condé Nast, Advent Venture Partners, e-ventures, Index Ventures.
Not on the High Street (UK)
Founded in 2005, Not on the High Street is an online marketplace of over 50,000 gifts and
unique products from 3,000 creative small businesses around the UK. The company has raised
c.$30m from Fidelity Growth Partners, Greylock Partners, Index Ventures, Venrex Investment
Management and Spark Ventures.
Rent the Runway (US)
Founded in 2009, Rent the Runway is a website that rents out high-end clothing and
accessories to consumers for a few days at a time. The site exposes its member base to new
designers and products, where consumers are directed to brand and retailer websites where
they can purchase the items. The company has raised over $55m from 2020 Ventures, Condé
Nast, American Express, Bain Capital Ventures, Highland Capital, KPCB, Novel TMT Ventures.
Wish Want Wear (UK)
Founded in 2012, Wish Want Wear is an online clothes rental site, where users can rent out
designer dresses and other fashion items for four days at a fraction of the actual cost. The site
currently offers 300-350 styles and sends two different sizes of the dress in case one size does
not fit.

27 GP Bullhound LLP
C2C Marketplaces
Covetique (UK)
Founded in 2011, Covetique resells pre-owned luxury fashion pieces at accessible discounted
prices. Its products include items from Alexander McQueen, Prada, Chanel and Gucci. The
company arranges for items for sale to be picked up, photographed for the site and packaged
for delivery to the buyer, ensuring high quality. The online personal wardrobe function allows
users to follow others and be notified of new items listed on the site. In November 2012, ASOS
invested an undisclosed amount for 30% stake in the company.
Vestiaire Collective (France)
Founded in 2009, Vestiaire Collective is an online platform for pre-owned luxury fashion items.
The site has over 1.2m users as part of its online fashion community. The team requests
pictures of the product to agree on the price with the seller, after which the item is collected and
checked for quality control. In March 2012 the site launched in the UK. The company has raised
over $13m from Balderton Capital and Ventech.
Videdressing (France)
Founded in 2009, Videdressing is a social marketplace for fashion lovers who buy and sell their
previously owned clothing and fashion accessories, with over 2m visits per month and around
500, 000 members. Videdressing is the only C2C site to offer a money back guarantee and
thereby provide their customers with a level of service similar to what they would encounter on a
traditional B2C fashion e-commerce site. The company has raised over $5m from DN Capital
Limited, Earlybird Venture Capital, Generis Capital Partners and Piton Capital.
The Real Real (US)
Founded in 2011, The Real Real is a premier online luxury resale store, selling authenticated
pre-owned brands. Members can pay an additional fee to get exclusive access to the sales. The
company has raised over $14m from Canaan Partners, e-ventures, Greycroft Partners,
InterWest Partners, Novel TMT Ventures, Panarea Capital, Expansion VC and 2020 Ventures.

28 GP Bullhound LLP
Verticals
Alex and Alexa (UK)
Founded in 2007, Alex and Alexa is an online store specialising in high-end children’s clothing,
toys and sportswear from 200 brands including prestigious heritage fashion labels such as
Burberry, Chloé, Fendi and Dolce & Gabbana, as well as niche labels sourced from all over the
world, such as Finger In The Nose and Muchacha. The company has raised undisclosed
funding from MMC Ventures and Tiger Global.
SoJeans (France)
Founded in 2010, SoJeans is an online retailer specialising in jeans, offering more than 1,200
models from 75 brands, stocking all sizes. The company offers free shipping, fitting at home and
returns.
Surfdome (UK)
Founded in 2006, Surfdome is an online retailer of lifestyle, fashion, outdoor and sports brands.
The company offers over 750 well-known brands, covering men’s, women’s and children’s
clothing and accessories, including Hunter, Superdry, Vans, The North Face. The website won
the 2011 Shopzilla’s Circle of Excellence award for top customer satisfaction. In 2013, Surfdome
was the fastest growing Facebook community retailer in the UK with 513% growth in likes
(Tamar Brand Love Report, 2013).
Warby Parker (US)
Founded in 2010, Warby Parker sells prescription eyewear online and through its showrooms.
The company has crafted 27 limited run styles, plus one monocle aiming to provide more
affordable eyewear. Warby Parker has partnered with non-profit organisations to ensure that for
every pair of glasses sold, a pair is distributed to someone unable to afford prescription
eyewear. The company has raised over $56m from American Express, General Catalyst, Lerer
Ventures, Menlo Ventures, Spark Capital, Thrive Capital, Tiger Global, First Round Capital and
SV Angel.

29 GP Bullhound LLP
Cuyana (US)
Founded in 2011, Cuyana works with local craftsmen in Ecuador, Peru, India, Argentina, Japan
and Mexico to bring apparel items made from premium textiles and metal materials. Each piece
is intended to encompass the country’s culture, heritage and its people. Cuyana also supports
the local community by donating and percentage of its profits to charity Water. Cuyana has
received undisclosed funding from Canaan Partners.
Everlane (US)
Founded in 2010, Everlane sells online its own selection of apparel items. The pieces are
created in-house by a small team of designers, who source the fabrics from around the world
and seek out the best factories to product the items. Through bypassing any middlemen, offline
stores and retail partners, Everlane aims to offer a highly competitive price for its products. The
company has received over $1m funding from Betaworks, KPCB, Lerer Ventures and SV Angel.
Spreadshirt (Germany)
Founded in 2001, Spreadshirt is an online personalised apparel platform. Users can print their
own design on over 100 different articles of clothing. Users can also create their own
Spreadshirt shops to sell their designs. There are more than 400,000 Spreadshirt shops open.
The company has raised over $12m funding from Accel Management, Kennet Partners and
Kreos Capital.
Wool and the Gang (UK)
Founded in 2008, Wool and the Gang is an online DIY fashion brand, offering knitting kits as
well as ready to wear knitted products. The company sources its yarn from Peru, where it also
recruits local women to knit the ready to wear items. Wool and the Gang organises knitting
events and has an expanding online community of knitters.

30 GP Bullhound LLP
Personalisation, Curation & Social Discovery
Chicisimo (Spain)
Founded in 2010, Chicisimo is an online fashion community, where users share their pictures of
various outfits and get inspiration about what items work well with others. The site aims to
collect data on the fashion industry from its user base, similar to that of Last.fm. Chicisimo is
also working with brands directly to create branded profiles on the site. The company has raised
over $1.4m from investors including VitaminaK.
Dressipi (UK)
Founded in 2009, Dressipi is an online personal recommendation engine. The site has several
in-house stylists that suggest various items of clothing for the users. Users input their statistics
and answer quiz questions so that the suggestions are closer to their tastes and preferences.
The company has integrated various known fashion brands including Boden and BrandAlley,
which use its recommendation service for its own shoppers.
Lyst (UK)
Founded in 2010, Lyst is an online personalised fashion brand aggregator. Lyst sends
recommendations and updates on brand collections via email, personalised for brand selection
of the user and behavioural data on the site. Lyst aggregates inventory of online and offline
retailers, such as department stores, boutiques and brand stores, taking commission for each
purchase. The company has raised over $5m from Accel Management, DFJ Esprit, Venrex
Investment Management.
Outfittery (Germany)
Founded in 2012, Outfittery is an online men’s stylist platform. Users discuss their preferences
with a stylist on the phone to be recommended a selection of fashion items. The push
subscription model means that the items are delivered after user confirmation and can be paid
for at delivery or returned. The company has raised undisclosed funding from High-Tech
Gründerfonds Management, Holtzbrinck Ventures, IBB Beteiligungsgesellschaft, Mangrove
Capital, RI Digital Ventures.

31 GP Bullhound LLP
Other
EDITD (UK)
Founded in 2009, EDITD collects trend-forecasting market intelligence for the fashion sector,
from sources including online apparel retailers, consumer intelligence from social media, runway
data, and newsletters. The data is aimed to help retailers on assortment, price points,
competitive positioning in real time, as well as helping financial investors and consultants in
analysis of fashion businesses. The company has raised c.$1.8m funding from Atlas Ventures,
High Line Venture Partners, Index Ventures and Seedcamp.
Fits.me (UK)
Founded in 2010, Fits.me is an online fitting room SaaS solution for retailers, including Otto,
Boden, Adidas. The service enables users to try the clothes on virtually through the site before
purchasing, to ensure that the fit is optimised and returns are lowered. The company uses highly
sensitive robot technology to measure the dimensions of clothing items, which are then
compared to the size metrics entered by the user to create an image of how the item would fit in
real life. The company has raised over $10m funding from AS SmartCap, Conor Venture
Partners, Entrepreneurs Fund Management, Estonian Development Fund and Webmedia
Group.
Holition (UK)
Founded in 2008, Holition provides augmented reality solutions to the retail sector. The
company has worked with leading retailers such as De Beers, Tissot, TAG Heuer, Dunhill and
Georg Jensen, to develop virtual 3D imaging applications for users to try on apparel items online
at home or within a store.
Snap Fashion (UK)
Founded in 2012, Snap Fashion is a fashion search engine that uses images, taken on the
mobile app, to search for matching items of clothing. The company’s data base includes items
from over 100 major retailers, such as Topshop, Gap, Jigsaw, and online retailers, such as Net-
a-Porter, ASOS, MyWardrobe. The app also allows users to share choices and purchases with
friends and create tailor-made personal wishlists and giftlists. The company has raised
undisclosed funding from Venrex Investment Management.
Virtusize (Sweden)
Founded in 2011, Virtusize is an online virtual fitting room solution that helps users assess their
correct apparel size, by comparing the item measurements with the metrics of another item
specified as a good fit by the user. Virtusize has consumers in more than 100 countries and is
available for 25,000 garments or 150,000 SKUs. The company has raised undisclosed funding
from Investment AB Öresund.

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