Executive Summary

Fashwire offers both emerging and established designers an unmatched communication and feedback pipeline to influence, grow, and sell directly to consumers. The company is launching a first-of-its-kind app that connects brands, designers and retailers. Users can discover and influence brands via the platform, and designers and retailers can draw consumer demographic and preference data from it in order to target their styles. By aggregating this data, Fashwire is able to offer a global view of fashion at multiple levels. The company can also market the data, and invite designers, sponsors, partners and others to share it and advertise on the platform.This data-centric approach offers a highly scalable model with high revenue potential combined with a low burn rate. The company sees no direct competitors—only indirect competitors that can be turned into B2B advertising partners. Fashwire’s management team, which has many years of experience in retail and technology, has enlisted a development partner to develop its website and apps. The company’s iOS smartphone app is scheduled to launch the first week of April. Fashwire’s Android app will launch the first week of May with the website.

Company Overview

Fashwire is a mobile and web application that directly connects designers, brands, retailers, and the fashion-curious with the otherwise intimidating and saturated world of fashion.  As a designer solution, Fashwire allows designers to promote products on a global platform, build a fashion forward fan base, and get direct feedback from their followers.  Users also get an unprecedented eye into the industry. As they create Look books and choose to “Love it” or “Leave it” on styles, they will be influencing tomorrow’s fashion trends, getting rewarded for their time spent on the app, and offering real-time insights for designers and, by extension, retailers.  As Fashwire grows their base of users and designers, retailers will have access to an increasingly rich bank of information, allowing them to target their styles based on real-time consumer demographics and data. Fashwire will gain insight into fashion at a global, regional and personal level, and then be able use that knowledge to advance and inform the industry at large. Fashwire plans to launch its beta for iOS app at the Shoptalk 2018 trade show, and the Android version is under development. The company’s app can be described as “Instagram meets Tinder with a Pinterest layout” (screenshots from the app appear later in this report). The platform will be available through a website, iOS,and Android. Fashwire’s is a designer-direct platform powering actionable insights with data using a swipe functionality to gain insight into designer collections. The user interface is similar to Tinder’s swiping functionality,with instant percentage results.  Additionally, the swipe functionality includes a feature for users to create curated Look books to show the industry what trends are taking place. Users can enter their Look books in a weekly contest in order to win substantial rewards, such as clothing items and discounts from e-tailers, independent specialty stores and larger retailers. At launch, Fashwire will be a social platform providing an interactive link between fashion designers and consumers, driving user participation with a curated experience and a robust rewards program. Users gain access to designers’ collections and get a peek behind the curtain, while designers get real-time feedback on users’ preferences. Meanwhile, the industry gets hard metrics on consumer preferences in near real time. Fashwire believes that it is the first to market with this type of designer solution. Farther out, Fashwire plans to monetize the large user base it expects to attract as well its high-quality user data and multiple premium advertising and affiliate models. This will enable the company to offer high profit potential with a low burn rate. Fashwire expects this to lead to future opportunities in terms of acquisition or an initial public offering.

Industry Overview

Fashwire lies at the intersection of the apparel, tech, and social media markets.

Global Apparel Market

The global apparel market is worth approximately$3 trillion and accounts for 2% of the world’s GDP, according to fashion industry network and news site FashionUnited. Euromonitor International estimates that the US apparel and footwear market was worth $341.6 billion in 2017 and that it will grow at a 3.5% CAGR to 2022, to reach $405.9 billion.The firm further estimates that US online sales of apparel and footwear will grow at an 11.4% CAGR to 2021, when they will account for 22.3% of total US apparel and footwear sales.

Source: Euromonitor International/Coresight Research

Social Media

Social media has become an integral part of our globally connected world, but it plays an especially significant role in the fashion industry. [Fashwire estimates] that the average fashion brand generates approximately 3.4 million social media interactions, compared with just 647,125, on average, for brands in general.Many social media interactions take place on mobile devices, and eMarketer predicted that 131.4 million Americans would make at least one purchase via an app on their mobile device in 2017.

Competitive Advantages

Fashwire believes that it is the first big player in the "Tech meets Fashion” crossover industry to bring all target audiences together on one platform with strong data analytics. Currently, fashion designers’ discover ability is limited to fashion markets and shows, road appointments, and showrooms. But Fashwire aims to alter the required credentials for designers wishing to enter the fashion industry and to create a low-cost solution for them to showcase their designs. The diagram below illustrates Fashwire’s competitive advantages.

Source: Fashwire

Products

Fashwire is a software platform providing a marketplace where designers and retailers can optimize at every stage of the design, buying, merchandising and marketing process.Designers and retailers can access an increasingly rich bank of information of consumer demographics and preference data to target their design and purchasing decisions.  By aggregating this data, Fashwire will gain insight into fashion at a global, regional and personal level, and then be able use that knowledge to advance and inform the industry at large. The platform will be available via website, iOS and Android. The Fashwire app can be described as “Instagram meets Tinder with a Pinterest layout.” Currently in beta, the iOS app is scheduled to go live on March 19 at the Shoptalk conference in Las Vegas. The Android app is under development.

Source: Fashwire

Business Model

The company’s business model rests on four pillars, as illustrated below.

Source: Fashwire

These pillars are expected to translate into advertising and affiliate opportunities generated by the company’s large user base, high-quality user data, and multiple premium and affiliate advertising models, which offer high profit potential and a low cash burn rate.

Strategy

Fashwire believes that it benefits from the following competitive advantages:

• Timing: Fashwire is entering the market at an optimal time, as emerging designers currently face a clear source of pain. Designers need an inexpensive solution and a platform through which to showcase their designs and collections.
• Strong business strategy: The company is responding to designers’ needs by offering an interactive link between them and consumers. The platform will provide emerging and established designers with a self-service, inexpensive way to show off their collections to influencers and consumers in advance of production or during the seasonal markets. In addition, Fashwire plans to offer value-added services on the platform. Designers can get started with a low-cost subscription model and users can join for free, reducing initial sales friction.
• Unique approach: No similar designer solution has yet been brought to market.
• Design with massive scalability: Fashwire’s platform was architected to deliver results without requiring massive consulting engagements or large development projects.
• Low cost and fast implementation: The platform can be deployed rapidly, and it features flexibility and built-in best practices.

The company’s strategy is differentiated in terms of three key areas: product, people and traffic.

Source: Fashwire

Customers

Fashwire is gaining traction in terms of technology, designers and brands, users, and partnerships, as illustrated below.

Source: Fashwire

Competition

Fashwire believes it is the first to market with the kind of solution it is offering. Its platform is designed to include more fashion designers than any other fashion app currently on the market. Glamhive, Mallzee and Polyvore all target consumers with a retail solution, but Fashwire focuses on fashion designers’ collections, creating brand awareness, prompting user interaction, and gathering data, meaning it offers a highly curated solution in comparison to these other companies’ offerings. Fashwire faces a variety of indirect competitors,but believes that these companies are also potential B2B advertising partners.

The figure below illustrates Fashwire’s positioning, both at the nexus of fashion and technology and versus its indirect competitors. Source: Fashwire Note: Symbols include Gilt, Hautelook (H), Lyst, Mallzee (magnifying glass), Nineteenth Amendment (N), Polyvore, Refinery29, Ruelala (Rue) and Vogue (V).

Financial Overview

Fashwire has raised a total of $950,000, comprising $200,000 in seed funding from the founder and a subsequent $750,000 from friends and family (offering common stock at a $2.5 million pre-money valuation). The company is currently engaged in raising a $2.5 million series A Preferred Round of funding, and 60% of the first-round investors have increased their investment as part of the current round. These funds will enable the company to complete development of its platform, launch marketing campaigns, develop partnerships, hire staff and expand globally. Further out, the company could pursue an acquirer.Potential acquirers would be active in the fashion, social media or technology spaces, and Fashwire would be a good fit for the product portfolios of a number of possible buyers.Alternatively, the company could pursue an initial public offering if it is able to amass a substantial user base, as it has high stand-alone potential.

Management

Fashwire is led by a founder and CEO with substantial retail and technology experience, and its team is aided by an experienced software development partner.

Management Team

Kimberly Carney, Founder and CEO of Fashwire, has 15 years of experience in retail store ownership and has also previously worked in technology, including wireless communications, and marketing. She currently owns and runs FashShop, a successful men’s and women’s upscale retail store in the Magnolia Neighborhood in Seattle. Hooman Hamzeh, President and CEO of Developing Now, leads the outsourced development team for Fashwire. He has more than 20 years of experience in building internal and external technology products.

Advisory Board

Fashwire’s advisory board includes well-known, respected leaders from a variety of industries, including retail, technology and finance. David Aldea is engaged in strategic technology consulting at Willistead Group. He previously held senior roles at John Wiley & Sons, LexisNexis and The McGraw-Hill Companies. Jeri Andrews serves as SVP, Head of Sales, for a $6 billion private equity fund and mentors entrepreneurs and executives in the financial services and food tech sectors.Andrews is also the founder of a partnership created to build communities and jobs and cultivate mentoring opportunities in Seattle. Peter Backman is currently Senior Manager, UX Design for Oracle. He has over 15 years UX experience with User Experience (UX) design, User Interface (UI) design and development. Torrie Dorrell, Consumer Engagement, Microsoft Game Studios, has more than 20 years’ experience developing, marketing and selling innovative content and services across virtually all game genres, business models and platforms. Joe Futty is the GM and Chief Product Owner of eBay Buyer Delivery Experience. He previously served in a variety of roles over 10 years at Microsoft. Dr. William Kapfer is Global Head of Supplier Diversity at JP Morgan Chase. He previously held senior roles at Walton Isaacson, Time Inc. and Hearst Magazines. Jan Rogers Kniffen, CEO of J Rogers Kniffen World Wide Enterprises, is a retail expert who spent 20 years as a senior executive at The May Department Stores, ultimately serving as SVP, Finance, and Treasurer. Manuel (Manny) Rivelo is currently the Chief Sales Officer for Arista Networks. He has more than 30 years of tech experience and formerly served as CEO at AppViewX, F5 Networks and SVP at Cisco Systems. Deborah Weinswig is CEO and Founder of Coresight Research, which was spun out from the Fung Group in February 2018. Weinswig formerly served as Head of the Global Staples and Consumer Discretionary team at Citi Research, where she worked for nearly 12 years.

Upcoming Events/Milestones

Fashwire is a Level 1 sponsor of Shoptalk, the world’s largest conference for retail and e-commerce innovation, which runs March 18–21 in Las Vegas. The show’s organizers expect more than 7,500 attendees, including executives from established retailers and brands, startups and tech companies, as well as investors, journalists and analysts. Fashwire’s app is scheduled to go live with their beta at Shoptalk on March 18. For more information, please visit the Shoptalk website.