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Can online boutique startup &Threads follow-up on YDE’s success?
In 1995, Paul Simon (age 21) started the very popular Young Designers Emporium (YDE). The retail store for fashion designers soon grew to 13 stores across South Africa. Ten years later, he sold his company to Truworths International for an undisclosed sum of green, and with that, became one of the country’s most inspiring entrepreneurial success stories.
Since Simon made his exit, the serial entrepreneur has been involved in various projects, from setting up a kids play park, driving those yellow fan helmets during South Africa’s Soccer World Cup in 2010 and launching a new ice tea brand called Uber Flavour in 2013.
It was only until recently that he decided to team up with high school friend Simon Leps from ecommerce development agency Fontera Digital Works to build the next big thing for fashion designers in a much more modern and demanding South Africa than 20 years ago.
Together with the technical skills of Leps and the industry know-how of Simon, the pair founded &Threads — an online store for fashion designers that was launched in February. Similar to YDE, the platform is a facilitator for both designers and those looking for quality, branded fashion products.
“It’s YDE inspired but not connected,” Simon reassures in an interview. “I know the YDE business model, which allowed designers to showcase their product who otherwise wouldn’t have had that exposure. In the bricks and mortar type of environment you needed to supply the physical space and here we’re supplying the online space.” Online is of course much cheaper, but oh so competitive still.
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With a mission to become the biggest fashion retailer in Africa, the startup hopes that curating some of the best brands South African designers have to offer will give it the edge. The fashion labels, in turn, has a new route to market at a much lower cost that allows them to focus on designing and producing their product.
Today, South Africa’s online fashion space is largely dominated by the likes of Rocket Internet’s Zando, Superbalist (which has been acquired by mutlimillion-backed Takealot), Spree of Naspers and long-standing retailers like Woolworths and Mr Price. “Between one and two percent of South African retail is done online. We reckon it’s much bigger than 30% per year,” Leps says.
&Threads is backed by R2-million which comes out of the pockets of the founders. It will be looking for funding as soon the company has a proven business model and hopes to be profitable by the end of this year.
“Every new designer you attract has a database. That’s the beauty of this model,” says Simon. So far, via affiliate partnerships, &Threads has access to over databases of over 1 million people, which would help a lot with its marketing efforts.
“Most brands and fashion trends today can’t be found online. And if they do have their own stores, they don’t have enough money to market it,” Leps shares. And those who do hook onto the online retailers, the pair explains, suffer from a hangover from dealing with all these online stores. For instance, some retailers will buy out your range, put it up on display but end up discounting your products, devaluing your brand.
Unlike big retailers on the market, &Threads distinguishes itself by focusing on the brand and its designer’s freedom. Designers determine the retail price, while logistics are handled by &Threads.
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“We know how to identify fashion online, the right designers and how to market it,” says Simon. &Threads aims to fill up a group of 30 showcased designer brands who go through an interview and review process. The startup charges fashion labels a monthly membership fee to be listed on the site and 30% commission for every item it sells.
“We have empowered the designer to think about what they want as a young upcoming designer,” Leps adds. “They have all the freedom. They choose what they want to put on the site. We just get the merchandise from them and shoot all the products ourselves.”