Secretsales.com receives multi-million pound investment
By FashionUnited
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Fashion
Secretsales.com is celebrating a double success after clenching a multi-million pound investment from Brands4Friends and announcing the appointment of John McKenzie from BrandAlley UK’s senior team as Associate Buying Director.
The investment will be the second round from Brands4Friends, Germany’s largest private shopping club, and marks the beginning of a new phase of business expansion for the private sale online retailer and a unique opportunity to capitalise on its already dominate position in the UK private sales market online.Commenting on the deal, Chief Executive Officer, Nish Kukadia tells FashionUnited: “We reached our milestone targets for the first six months and the investors are supporting our continued acceleration with a second significant round of funding. As a management/founder team we’ve been bootstrapped operators since day one, which has meant our thought process with running the business is grounded in a different way to some seed funded start-ups. We continue to run the business prudently, which doesn’t mean we get everything right all the time rather we manage our risks with a serious degree of care. At the same time our investor company, Brands4Friends.de, has some ambitious international aspirations and the UK is an important part of that picture.”
Asked what differentiates the company from other internet businesses, Kukadia explains: “Secretsales.com operates as an independent business which gives us flexibility to adapt and manoeuvre in this competitive landscape, but at the same time we benefit from the Brands4Friends.de group capabilities and expertise.”
He adds: “With respect to funding, there’s definitely an uplift in investor confidence over the last few months and it’s really a matter of being in the right place at the right time. Private shopping clubs are still sprouting across Europe and that’s testament to a successful business model which stands strong. Some of the US private shopping club businesses are really leading the international market and adding a new layer to both retail and traditional ecommerce in what has been described as the most competitive online market in the world. At Secretsales.com we plan to follow suit for the UK.”
The changing economy demands a responsive business model, which in turn will develop realistic expectations of performance. Kukadia is under no illusion about the realities of today’s major hurdles, which explains why sharp planning and innovation have kept the company ahead of any challenge. Kukadia says: “By far the most dramatic shift over the last 12 months has been the volume of excess inventory available. Our suppliers had plenty of overstocks when the downturn started but have since taken a wiser approach to production, particularly from the start of 2010. That means there’s less inventory around to fuel these large volume private sales and the major players within our space are all talking to the same brands. What that means in the short term is the product offering available to consumers will be fairly homogeneous across similar sites and the point of differentiation will be in the service and customer experience.”
He continues: “In the mid-long term private shopping clubs need to diversify their product offering and evolve the model to get renewed traction. At Secretsales.com we’re always looking at smart innovation to drive the business forward, even though we haven’t always had the internal expertise to make the functionality look pretty. We’re now in a position to invest in new technologies, creative capacity and partnerships to deliver an infrastructure which can cope with more than just fashion. We’re already doing well with home wares and we’re keen to move heavily into the children’s wear market.”
With respect to shifting investor expectations, Kukadia rationalises: “They have their agenda and that often means growing quickly, sustainably and owning the market. Our investors are remarkably commercial so they’re supporting any improvements or changes we’re suggesting, but at the same time we have some tough targets to reach and we have to deliver.”
Brands4Friends, which reported annual revenues of €80 million for its German business last year, first invested in Secretsales.com in February this year and decided to increase its stake due to impressive growth - the retailer has seen a doubling of visitors since investment in February, attracting over 1 million users per month.
Secretsales.com continues to accelerate the expansion of the business after a successful three years of trading. McKenzie’s appointment marks a significant move for the retailer as it continues to boost its buying team, which already includes Marco Polo Sales Director Steven Kelly as Senior Buyer, Fenwicks buyer Natalie Holder overseeing the Lingerie Buying portfolio and Harvey Nichols’s Senior Buyer Melanie Smallwood leading womenswear.
The message is clear that it doesn’t end there as Kukadia points out: “We’re speaking to a number of suppliers outside of our comfort zone of fashion. We’re also getting much savvier with our customer acquisition and retention programme – both of which are managed by our experienced marketing team.”
“We want to reach out to more aspirational brands and we’re working on re-positioning the business to cater for different tastes,” he says. “We see Secretsales.com being the ultimate, aspirational private shopping club, which delivers all your favourite lifestyle brands at a faction of the price, provided you’re one of the lucky few members.”
Although Kukadia let slip that the retailer is working with brands such as Samsonite and Logitech computer accessories, he remained tight-lipped when pressed for more information: “I would love to say more but my lips are sealed – you’ll really have to log in daily to be kept up to speed. We’re expecting autumn and the run-up to Christmas to be very exciting for our Secretsales.com shoppers.”
Picture: Nish Kukadia, Chief Executive Officer