Retail innovation firm P180 has made an investment in luxury women’s fashion brand Altuzarra, according to a Monday announcement sent to Fashion Dive. Financial terms of the deal were not disclosed.
Under the deal, Altuzarra will license its e-commerce operations to P180, and P180 will become an equity partner in the company, according to brand founder and creative director Joseph Altuzarra.
P180, which launched in May, was co-founded by Brendan Hoffman, former CEO of Vince and Wolverine, and Christine Hunsicker, CEO of rental technology and services company CaaStle. The company’s mission is to “invest in or acquire industry leading brands and retailers” and use CaaStle’s tech to grow companies’ digital platforms, per a press release.
As part of the partnership, Altuzarra will add a rental feature to its digital platform. The expanded offerings are expected to debut ahead of the holiday season, although no date has been confirmed, according to Jessica Dvorett, CaaStle’s global head of growth.
Shira Sue Carmi, Altuzarra’s CEO, said in an interview that Altuzarra’s existing relationship with clothing rental company Rent The Runway is not expected to change.
Altuzarra previously had a partnership with luxury powerhouse Kering that lasted from 2013 until 2020, when Altuzarra bought back his stake. However, this current partnership is different for several reasons, Altuzarra said in an interview.
“[Partnering with Kering] was strategic in the sense that they really helped us scale and they really helped us… develop product categories that we were not in at that particular time,” Altuzarra said. “I think P180 and CaaStle are coming in at a time when we are… growing. We are expanding, and… we need a partner [to] help us scale this business and get to the next level.”
Shortly after its launch, P180 invested in luxury retailer Elysewalker in May. Hoffman said his company’s investment focus has since shifted to mono brands, starting with Altuzarra.
“Altuzarra was the center of the bullseye for us… because I've known Joseph [since] he launched his line, when I was at Neiman Marcus,” Hoffman said in an interview, adding that he “always missed the contemporary luxury side of the business.”
Hoffman, who was fired from his role as Wolverine’s CEO last year, spent more than a decade in luxury retail prior to joining Wolverine. He served as president and CEO at Lord & Taylor and president and CEO at Neiman Marcus’ NM Direct brand, and also spent five years as CEO of Vince.
With his new venture, Hoffman said he wants to provide brands with inventory monetization technology.
“It’s not [just] rental,” Hoffman said. “That’s the headline, but it’s not really the star. It’s just another tool in the toolbox. It’s really about how you fight back in terms of engaging the consumer, but doing so in a more profitable way.”
Hoffman said P180’s rental option is designed to give brands a revenue that doesn’t rely on markdowns.
“The truth is, there’s always a lot that needs to be marked down, and that markdown cycle has gotten compressed,” Hoffman said. He added that fashion items are being marked down more quickly than in the past, and with deeper discounts, and that’s a problem he’s looking to solve.
“What we’re doing is allowing the brand or retailer to hold on to this product longer, because now they have rental as another way to monetize,” Hoffman said.
For Altuzarra, rental is also a way to give his brand’s aspirational customers access to items they might otherwise have bought on sale.
“[There’s] the ability now for them to be able to rent something, see if it works, see if they like it, get to know the brand better, and then also have the option to buy what they’re renting,” Altuzarra said. “It's like a way of bringing in a new, younger customer with a completely different way of… interfacing and relating with fashion brands. It felt, honestly, very modern and very relevant to me.”
The partnership may also help reduce the cost of returns, Altuzarra said, since customers will be more familiar with the brand before making a purchase.
“We live in an era where Amazon and the really big players have trained the customer to expect free shipping, unlimited returns [and] a certain level of service that is just not sustainable,” Altuzarra said.
The designer also sees the rental capabilities as a way to expand his artistic reach.
“Sometimes in the runway show, we’ll make things …that don’t really end up getting picked up by wholesalers, because it's either the price… or it’s a little experimental,” Altuzarra said. “So it never really sees the light of day, which I find, obviously, very sad. [With] that borrow option, that can be a way of testing product that might be… a little more innovative, that might be more fashion forward.”
For Hoffman, innovation is necessary if the fashion industry wants to be profitable.
“What somebody said to me is, boy, this sounds so unorthodox,” Hoffman said. “And my comment was, what's orthodoxy? Orthodoxy has gotten us to a place where retailers and brands are valued at pennies on the dollar. So something has to change with the way we engage the consumer, and that’s the Moneyball aspect of it.”
