P180 has taken an undisclosed minority stake in Altuzarra, the brand designed by creative director Joseph Altuzarra. P180, which was cofounded by industry veteran Brendan Hoffman and CaaStle CEO Christine Hunsicker, made a recent investment in multi-brand retailer Elyse Walker.
“Over the last five years we’ve really grown our direct to consumer business and have seen a lot of success in ecommerce,” Altuzarra said. “When I met with Brendan and Christine, I learned more about their mission and the innovation around direct to consumer. I really felt that they were the right partners. How could we get to the next level? I realized this was the right time to partner with them. I’d be able to leverage their strength and expertise. In a way, we see P180 and CaaStle as an accelerant to our growth.”
“When Christine and I launched P180 just over a year ago, and we made our list of brands that we thought would fit the center of the bullseye for what we want to do and what we offer, and Altuzarra was at the top of the list,” said Hoffman, adding, “We knew Joseph from his early days.”
Altuzarra won’t be renting out its collection on CaaStle. It will be offering launch and borrow on the Altuzarra web site. “It’s embedded in Altuzarra,” said Hoffman. “It will be part of a subscription long term. Much like Elyse Walker, rental will be confined to the web site. It was always supposed to be white label.”
The cash infusion comes at a busy time for Altuzarra. It was announced earlier this week that he is going to be Victoria Secret’s first designer in residence. He’ll create a line of ready-to-wear for the brand. It will be a complete wardrobe for the Victoria’s Secret customer, launching in 2025.
“The premise of P180 was this recognition that retailers and brands have done things the same way for the last 100 years,” said Hoffman. “While that worked, that changed over the last 20 years. I think mobile commerce created frictionless price comparisons. That really ate away at the margins of retailers and brands where no longer could they hold things longer at full price if a competitor was marked down.
“Before that the consumer would have to make an effort to price compare. “They’d have to walk to the other side of the mall or get in their cars,” Hoffman said. “Now if it’s marked down somewhere, it’s marked down everywhere. That is the biggest contributor to why retailers have gone from 10% to 12% bottom line margins to break even, and are struggling to do so.”
But offering rental as a tool in the tool box, is not the endgame itself, Hoffman said. “Our goal with Joseph is to unlock full price selling – that’s always going to be where the profit is. By adding rental we’re adding another way to engage with the consumer that allows us to elongate the markdown cycle so we don’t feel the pressure to go as deep as quickly. We don’t need to job it out at 11 cents on the dollar.”
In addition to its financial investment, P180 will support Altuzarra’s digital transformation by onboarding Altuzarra.com onto CaaStle’s proprietary platform. This will enhance Altuzarra’s ecommerce capabilities, turning the digital channel into a profit center.
“We’re working with CaaStle to develop this new methodology and unlock their technology, while allowing Altuzarra to do what they do best,” Hoffman said.
“We’re in deep conversions with many other like brands,” Hoffman continued. “This will be the first of many that we’ll be announcing. Joseph is the center of the bullseye but a lot of his peer group is on that target list. A big piece of what we’re bringing to the market is the recognition that we’re always going to drive full price. There’s an enormous inventory that gets marked down. And the opportunity to raise that marked down inventory is a big unlock to overall profitability. P180 is recognizing that we need different tools. I think rental is an elegant way to do that.”
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