Barely a year since its launch, Oliver Cabell is ready to make some big changes.
Today, the direct-to-consumer accessories brand — best known for luxury bags without the usual markup — announced its first round of funding. Valued at $1.2 million, it will primarily be used to expand to a new product category: footwear. It’s quite a leap for the company, which has offered a relatively unchanged selection of bags and leather goods since its inception in late June of 2016.
Starting in early November, it will adopt a “drop of the week” model, rolling out a new variation of a style (think: a new color way or a new material option) every Tuesday or Wednesday. (Similarly, direct-to-consumer footwear brand M.Gemi debuts new styles every Monday.) Fresh silhouettes will debut about every five weeks.
“One of the biggest learnings [in the first year] was how important releasing new product is,” said Scott Gabrielson. “We built brand awareness organically, and it’s hard to maintain that word-of-mouth growth and storytelling without releasing anything new.”
He pointed to “the Warby Parkers or the Aways of the world,” backed by investors and able to pump dollars into marketing. While he hadn’t actively sought outside capital, he saw the opportunity when recently approached by a technology entrepreneur (whose name Gabrielson would not disclose) interested in investing in the company.
“We had sold out of our core styles almost immediately, then we had restocked them, then we had just sold out again,” Gabrielson said, of Oliver Cabell’s state at the time. “We were ready.”
He called the investor “a natural fit” for the company, given both his background and his proposition. Though he lacked e-commerce and fashion experience (like Gabrielson, who started Oliver Cabell straight out of business school), he built a billion-dollar company and shared Gabrielson’s views on traditional fundraising: It’s unnecessary. In lieu of taking on VC partners, the entrepreneur agreed to back the round solo.
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As Gabrielson tells it, footwear is a fitting a next step. He became familiar with the process of creating high-quality shoes when visiting his go-to leather goods factories in Le Marche, Italy, which also produce accessories for the “top-tier” luxury brands. He said he noticed the same practices that motivated his bag business: brands charging high prices and taking massive margins. (As popularly reported, Oliver Cabell’s markup is consistently 2.2 times the production cost; other brands charge up to 12 times the cost.)
The footwear is a growing market: According to Euromonitor, it will be $408 billion global industry by 2021, up 17.6 percent from 2016. Gabrielson has plans to focus heavily on sneakers (though formal styles are in the cards), the fastest-growing category in the fashion industry. The category is expected to be worth $84 billion next year.
The releases will come in small batches, allowing the brand to swiftly react to customers’ response. “It also helps to build hype,” Gabrielson said. “There’s a sense of scarcity around our products, which raises demand. For sneakers, we may only have 10 pairs; once they’re gone, they may be gone forever.”
A number of shoe style collaborations are in the works, with ready-to-wear brands, musicians, athletes and even a yet-to-be-revealed publication that has been busy creating collections with top streetwear brands. The first collab will be released in December.
The company declined to disclose first-year earnings, but Gabrielson did reveal that the company grew from a one-man project to a 10-person team. It has also solidified a 200,000-person email list. The first 15,000 came from an incentive strategy much like the one he’s employing for the footwear launch: Share emails of friends to earn sneak peeks of styles, early shopping access and discounts. Growth is the mantra, he said.
“Whenever an investor is involved, the pressure builds,” he said. “He wants returns, so it’s like: ‘OK, we have someone else involved who has an equity stake; we need to grow this brand.’”
