Predict your next investment

INTERNET | eCommerce / Apparel & Accessories
littleblackdress.co.uk

See what CB Insights has to offer

Founded Year

2008

Stage

Unattributed | Alive

Total Raised

$3.25M

Last Raised

$3.25M | 3 yrs ago

About Little Black Dress

Little Black Dress is an online fashion retailer that sells party dresses, bridesmaid dresses, pageant dresses, and more.

Little Black Dress Headquarter Location

The Old School House

Manchester, England, M12 6PN,

United Kingdom

0161 277 7046

Latest Little Black Dress News

Can You Really Afford That Little Black Dress For $9.99

Feb 15, 2021

The negative impact of the fashion industry on the world and its many inhabitants is becoming increasingly clear. Fashion emits more carbon than the airline and maritime industries combined – and this was true before the dramatic dip in travel due to COVID-19. Fashion factory workers, in many places around the world, including the United States, work unsafe, underpaid jobs. The sting of fashion on the planet, people and animals is being felt more than ever — and consumers are taking notice. Ege Organics facilities Ege Organics And yet shoppers continue to buy fashion from companies whose products are destroying the world. The oft-cited rationale is that sustainable fashion alternatives are simply unaffordable. Most people live on a budget. So given the choice of buying a little black dress that harms the environment but costs only $9.99 vs. spending significantly more for a sustainable version, many consumers will choose the former. But does this have to be true? Specifically, what if sustainable practices within the fashion industry didn’t cost more? Can fashion be profitable and sustainable while providing consumers with affordable pricing? According to a number of industry experts, the answer is yes – if fashion businesses rethink their approach to unit cost, risk and profitability. Consumers Really Don’t Want To Pay More MORE FOR YOU First, the fashion industry needs to accept the inconvenient truth that most shoppers do not want to pay more for sustainable clothing. While a subset of consumers might be willing and able to pay a premium for eco-friendly garments, most people – whose priority is putting food on the table – do not enjoy the luxury of that choice. Amanda Hearst, co-founder of Maison de Mode, a platform that connects shoppers with sustainable fashion brands, concurs. Maison de Mode offers sustainable fashion items at a broad range of pricing (ie. from under $100 to over $10K). And while Hearst has seen an explosion in interest in sustainability in recent years, she notes that only a fraction of customers are willing to pay more for an item simply because it is sustainable, particularly for basics: “People are more financially stretched than ever, and this makes them less willing to pay even $15 more for a basic t-shirt that is organic vs. a fast fashion cheaper version.” John Thorbeck, former CEO of GH Bass (PVH ) and Rockport (Adidas) and Chairman of Chainge Capital, a firm focused on fashion industry transformation, agrees with Hearst: “If you’re investing in sustainability and counting on customers to automatically pay a premium for it, you will only reach a small market. Sustainability is the price of admission today, especially for young Gen Z customers, but they won’t pay a premium for it – they expect it to be included as part of normal pricing.” The key to charging a premium for sustainability is high quality and unique design. “It’s always going to be about quality,” notes Hearst, “The product has to speak for itself in order for someone to really invest in it and become a customer.” An Industry Obsessed With Unit Cost As a whole, the fashion industry has had a longstanding unhealthy obsession with unit costs and the initial markup over cost that determines an item’s retail price. When looked at through the lens of unit production cost, sustainable clothing has traditionally been more expensive. Mehmet Ünsal, Managing Director at Ege Organics, a family-owned textile and manufacturing company dedicated to the production of environmentally friendly fabrics, estimates that manufacturing environmentally-friendly cotton and yarns costs a premium of around 20%. Moreover, achieving GOTS certification for those textiles, a processing standard that includes ecological and social criteria, can raise the premium to 30%. According to Ünsal, the premium cost of sustainable textiles is based on higher wages paid to workers, the avoidance of pesticides and cheaper GMO seeds and a more expensive but healthier fabric dying process. Sustainable manufacturing costs are higher too, notes Ünsal. Avoiding using cheaper labor and poor and often unsafe facilities leads to an increase in unit cost. Organic cotton plant Ege Organics Given these realities and the industry’s myopic focus on initial markup, it is hard to see how a sustainable fashion company can ever be as profitable as a non-sustainable one – particularly if the consumer is not willing to pay more. But increasingly a school of thought is emerging that going sustainable does not need to cost more. To make this point, Thorbeck cites the automotive industry as an example: “In the ‘80s, Toyota proved that higher quality could be achieved at lower cost. Until that point, American manufacturers in Detroit believed that higher quality required charging the customer a premium. As such, quality had been the defining characteristic of the American auto industry’s cost base. But Toyota disproved this model. And before long, Toyota overwhelmed American companies, because while Detroit automakers were adding costs to improve quality, Toyota was reducing them.” Focus On Profitability And Cash Flow The glaring opportunity for the fashion industry lies in shifting away from a focus on minimizing unit manufacturing costs and instead looking at financial performance more holistically. A focus on simply minimizing unit cost is both inefficient and wasteful. It leads to manufacturing goods months in advance of sales, often far away from the end consumer, with limited information about what the end consumer actually wants to buy. Not only does this approach require higher upfront cash commitments, it results in significant discounting and leftover merchandise at the end of the season with excess inventory typically in the range of 30-40%. To make matters worse, in this slow “bet on winners” system, top selling styles can’t be quickly replenished, so those sales are lost. A smarter manufacturing system, according to Thorbeck, is one that achieves higher margins at lower risk by building a more responsive supply chain. The benefit of this approach is a meaningful reduction in the lead time requirements for product development and manufacturing, where raw material needs can be hedged and production capacities reserved and staged. Summarizes Thorbeck, “This system allows companies to reduce their markdowns, capture lost sales and reduce their working capital across all tiers of the supply chain.” He believes excess inventory can be reduced substantially under this paradigm, an outcome that aligns a company’s sustainability and profitability goals. A Zeal For Being Nimble But for an industry that resists change – even when it is economically advantageous – how does it get there? How does it actually make its supply chain more environmentally friendly and at the same time more profitable? A number of companies are lending a helping hand in this regard, including Nimbly and Ziel, two companies that create solutions for fashion businesses looking to be more responsive. Tech entrepreneur Kurt Cavano, founder of the largest supply chain platform in the world used by the apparel industry (Tradecard which was merged with GT Nexus), became CEO of Nimbly just over a year ago when it was simply an on-demand manufacturer of knitwear using 3D knitting machines. Soon after, Cavano and the Nimbly founders realized there was an opportunity to leverage excess capacity from under-utilized machines around the globe. “I said to the guys: Why don’t we think about this differently,” recounts Cavano. “Instead of buying a bunch of machines, why don’t we build a platform that connects all the existing machines together?” Nimbly now helps the industry by providing rapid local prototyping and flexible manufacturing. A brand can first produce small “test” quantities of a style locally. Then, if that style sells well, a sister factory abroad can produce a larger run at a lower price. Notes Cavano, in this scenario  “a company’s average unit price might be a little higher than the price paid to order 10,000 [units] from Bangladesh, but the company won’t be stuck with any overstock or missed sales”. Similar to Nimbly, Ziel is building a network of factories to help brands manufacture woven apparel on demand or in short order runs, including athletic wear, t-shirts and sweatsuits. Ziel’s founder and CEO Marleen Vogelaar does not believe it is necessary to manufacture all fashion items on-demand: “You can make socks and undershirts as mass produced as you can. It's the most efficient way. From a “minimize waste” point of view, as these items will always sell.” However, for non-basics, Vogelaar advocates a smaller upfront buy that that can then be supplemented by on-demand manufacturing if demand warrants it. “For fashionable parts of collections with pops of color for the season, brands should go with a combined model where part of the inventory is bought in advance in an inexpensive but sustainable way. And then, to accommodate follow-up demand, brands should partner with suppliers who have capacity to fill actual demand,” suggests Vogelaar. Although the approaches of Cavano and Vogelaar differ slightly, both aim to achieve the same result: to minimize excess inventory risk while avoiding running out of styles that are actually selling. While their methods entail slightly higher unit costs vs. the traditional industry model, they also both lead to significantly higher achieved margins at the same price to the customer. Perhaps most important, both of their models are much more environmentally-friendly. Organic cotton farm

Predict your next investment

The CB Insights tech market intelligence platform analyzes millions of data points on venture capital, startups, patents , partnerships and news mentions to help you see tomorrow's opportunities, today.

Expert Collections containing Little Black Dress

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

Little Black Dress is included in 1 Expert Collection, including E-Commerce.

E

E-Commerce

8,432 items

Little Black Dress Web Traffic

Rank
Page Views per User (PVPU)
Page Views per Million (PVPM)
Reach per Million (RPM)
CBI Logo

Little Black Dress Rank

CB Insights uses Cookies

CBI websites generally use certain cookies to enable better interactions with our sites and services. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. You can read more about your cookie choices at our privacy policy here. By continuing to use this site you are consenting to these choices.