This week, our spotlight shines on P180, a company that has recently invested in Altuzarra, a fashion brand. Established by Brendan Hoffman, the former CEO of Vince, and Christine Hunsicker, the founder of rental and e-commerce platform Caastle, P180 aims to bolster apparel brands and help them attain their profitability goals.
An interesting juncture in P180’s journey unfolded when it was pitched as both, a conventional investment company and a bridge for brands and retailers to align with Caastle. P180’s maiden venture was an investment in luxury retailer Elyse Walker in May, which was followed by its first brand investment in Altuzarra.
The company grabbed headlines on Tuesday when it announced that it had taken a minority stake in Altuzarra. This move was accompanied by P180’s takeover management of Altuzara’s e-commerce businesses, which were transitioned to Caastle. In addition, P180 also introduced a rental option for Altuzarra’s clothing and accessories.
Joseph Altuzarra, the founder of his namesake brand, acknowledged the essential role of DTC and e-commerce in the business. He believes P180 would jet-propel their growth as the brand lacked expertise in these areas. Altuzarra admitted that they had a cap on their growth and P180 would serve as the catalyst for removing it.
One of P180’s proposals to the brands is to concentrate on profitability, which is currently a major focus for fashion-industry investors due to rising interest rates. Many brands find profitability challenging, even in the high-margin luxury fashion sector.
Contrary to the old ways of measuring success in retail, P180 is coming up with modern methods of success indicators. The company believes that using rental as a business model will help to increase the value derived from each piece of clothing. The method to increase margin and prolong the lifespan of a product through rental is a step in this direction.
Rental, as observed by Jessica Dvorett, global head of growth at Caastle, aids profitability in numerous ways apart from revenue generated by renting. Customers are more likely to try on more diverse and current fashions as they only borrow them for a limited period. She also argues that rentals support other channels of business.
The onset of P180 into the market is significant at a time where even heavyweight luxury brands grapple with their profit margins. For instance, brands like Burberry observed a 40% plunge in their profits, while LVMH and Kering also reported a decrease in profits by 8% and 50%, respectively. Companies like P180, which are focusing on generating profits, will likely continue to offer value during this challenging period for the luxury industry.
Over the next two years, Hoffman plans to increase the P180 portfolio by investing in additional brands. He is particularly interested in apparel mono-brands. Some of these brands may already be sold at prime places like Neiman Marcus. The interest to work with P180 has reportedly seen a surge ever since the partnership with Altuzarra was announced.
Coming to weekly stats, Brunello Cucinelli’s revenues rose by 12.7% according to its earnings report released on Thursday. Cucinelli is one of the few luxury brands that has reported positive earnings in the past month, while many others faced declining sales. CEO Brunello Cucinelli credited this upward trend to a focus on high-end and loyal clients.
They’ve seen significant results from this fiscal year’s first nine months, especially with the sales of the fall-winter 2024 collections. Cucinelli believes that maintaining this momentum creates expectations for a nearly 10% revenue growth for 2024.
In other luxury news, some less than favorable earnings were reported by EssilorLuxottica. Meanwhile, Alberta Ferretti announced Lorenzo Serafini as its new creative director, and Shein is reportedly inching closer to its potential listing in London.
