Yahoo Finance Inside the costly fashion faux pas that was ill-fated Style.com
Anna Wintour’s reputation at Vogue is as much built on her immaculately coiffed helmet of hair as it is for rarely taking a wrong step in her long career editing the fashion bible’s lucrative US edition. But last week that carefully polished reputation was ruffled when one of the most ambitious projects she had overseen fell flat.
Condé Nast, the fashion publisher behind Vogue, Tatler and GQ, last week pulled the plug on Style.com, its ill-fated attempt to go solo in the world of online shopping. Instead, it is to partner with relative online fashion upstart Farfetch.
It was an expensive fashion faux pas. Not only was it a humiliating misstep, but Condé Nast had pumped in around $100m (£783m) into the joint venture which was meant to be “a shopping experience inspired by the world’s best magazines”.
Instead, fashion insiders have slammed Style.com as “Anna Wintour’s greatest failure”. Condé Nast’s chairman Jonathan Newhouse was more diplomatic when he said that it had fallen “far below our hopes”. But where did it all go wrong for Style.com?
The website domain had previously been used as Vogue’s collection of catwalk shots, video and hot editorial takes from the runway. But two years ago Condé Nast, long seen as the pillar of good taste, unveiled its plans to relaunch the website and transform it into an online fashion retailer.
It was always going to be an ambitious move, and one that seemed to rely on the open doors that Wintour walks through on a daily basis. Yasmin Sewell, the Australian-born “tastemaker” hired as Style.Com’s fashion director, knew of the pressure. “It’s Condé Nast, you know?”, she said last year. “It’s their first owned ecommerce site, so we have to raise the bar on every level. I like the challenge of that.” Sewell did not respond to requests for comment by The Sunday Telegraph, however.
It was always going to be an ambitious move, and one that seemed to rely on the open doors that Wintour walks through on a daily basis
Looking back, perhaps the writing had been on the wall for some time. There were several false dawns that immediately sparked whispers that all was not well.
Firstly, the launch date was pushed back several times, which was taken as a bad omen even in an industry that prides itself on being fashionably late. Then Sewell was left scrabbling to sign major fashion houses as the promise of having Gucci, Burberry, Valentino and Christopher Kane failed to materialise.
Many fashion insiders spoken to in the days since Condé Nast pulled the plug have said that failing to sign up the “big boys” of the sector – LVMH, Kering, Burberry – was one of the surprising, failings of the business.
“Prada, Gucci, Versace, McQueen, LVMH, they were not there. And you can get them elsewhere,” said one insider, on the condition of anonymity. For all the cattiness that has surrounded Style.com’s failure, few want to publicly criticise Condé Nast for fear of the wrath from Wintour, whose ‘Nuclear’ nickname is said to be well earned.
At the heart of the site’s problem appears to have been luxury brands’ wariness about the creeping level of control that Condé Nast could wield. While Sewell had always promised that she would have no influence over the editorial coverage, the fashion houses were unconvinced.
They questioned what would happen if a particular fashion editor wasn’t enthused with a particular collection – would that mean that Style.com would not sell it? Or worse, would they attempt to sell it with negative coverage alongside it? Rather than leave themselves vulnerable to a potential double-blow, the major fashion houses simply declined to take part. One industry insider said: “It is one thing for fashion editors to be paid to give advice to ateliers or for magazines to survive on the advertising. We all like the glossies as a status symbol. But there is a difference between trying to make money out of then selling it.”
It is one thing for fashion editors to be paid to give advice to ateliers or for magazines to survive on the advertising. We all like the glossies as a status symbol. But there is a difference between trying to make money out of then selling it
Designers simply didn’t want to be dependent on Condé Nast for distribution. Luca Solca, luxury analyst at Exane BNP Paribas adds: “I think the idea of combining editorial content with ecommerce is great on paper. In practice, it proved difficult for a publisher to transform into a retailer.”
One of the major criticisms of Condé Nast’s Style.com shopping venture was that it was simply too late to the party. There was already fierce competition from Net-a-Porter, which by the time Style.com actually launched in September 2016 had undergone a huge merger with Italian rival Yoox; Matches Fashion was already beloved by many and was making huge inroads online while relative upstart Farfetch was also shaking up the online shopping model. Net-a-Porter and Matches have heavily invested in their own editorial teams to create fashion advice for shoppers.
As a result, come launch, whatever Style.com did had to blow the others out of the water. Instead, it caused barely a ripple. “They made a lot of noise before the launch and in reality it was all very disappointing,” said one fashion veteran.
One of the major criticisms of Condé Nast’s Style.com shopping venture was that it was simply too late to the party
Shoppers also were unconvinced with the amount of time web users spent on Style.com languishing significantly below its rivals, according to figures by market intelligence company SimilarWeb. Global traffic figures for Yoox.com show that users spend an average 10.14 minutes on the site, Matches Fashion.com and Net-a-Porter run a close competition for second place, with average time on site at 5:46 minutes, and 6:23 minutes, respectively. By comparison the average visit on Style.com was less than two minutes.
With Style.com now redirecting to Farfetch, since the announcement, many in the industry are now pondering what the partnership will mean for the relationship between Wintour and Farfetch’s co-chairman Natalie Massenet, who left Net-a-Porter ahead of its merger with Yoox in September 2015.
“We have all been swapping jokes, there have been so many messages flying around because they really did not get along”, said one fashion insider. “When Natalie first launched Net-a-Porter, Wintour was so upset about it Vogue didn’t even report on it, and now they are going to team up? It’s an alliance against nature!”, one fashion critic scoffed. When Style.com launched, in direct competition to Net-a-Porter, there were “handbags at dawn” headlines.
In public, Wintour and Massenet have often appeared friendly with Wintour talking supportively of Massenet’s role as chairman of the British Fashion Council. And last week Massenet, who was once turned down for a job at Vogue as a fashion intern, said that it would be “thrilling to develop the next evolution of content and commerce with Anna Wintour and all the brilliant talented minds at Condé Nast”.
Massenet founded Net-a-Porter in 2000 and launched it just as the tech bubble burst. Nevertheless she spectacularly proved the doubters wrong. But after 15 years of building the business and selling the business to Richemont in a deal that valued the company at £350m she quit just months before the deal with Yoox closed. It later emerged that she was unhappy with the low valuation that had been agreed.
Where Farfetch differs from Yoox Net-a-Porter or Matches Fashion is that it doesn’t actually own the stock that it sells to shoppers. Instead it is a hi-tech platform that connects shoppers to 500 boutiques around the world
What Massenet would do next was the source of much speculation but rumours about her arrival at Farfetch started back in November. Stephanie Phair, who ran Net-a-Porter’s discount site Outnet was already at Farfetch.
Phair said last week that the Style.com deal, agreed for an undisclosed amount, was part “of the strategic approach for building us to become the luxury platform and leverage the strength of Condé Nast’s editorial”.
The agreement will also no doubt help Farfetch’s reputation in the US, where it is mulling an ambitious $5bn (£3.9bn) stock market listing. The loss-making business was valued at $1.6bn (£1.25bn) last year.
Where Farfetch differs from Yoox Net-a-Porter or Matches Fashion is that it doesn’t actually own the stock that it sells to shoppers. Instead it is a hi-tech platform that connects shoppers to 500 boutiques around the world that stock 200 brands from Dolce & Gabbana to Valentino. As one pundit put it – it’s the Just Eat takeaway model for fashion.
The London-based business, founded by Portuguese Jose Neves is breathtakingly ambitious. Unlike his online rivals, Neves still believes in the role of shops but believes that the artificial technology will transform them. Farfetch has since launched a “Gucci in 90 minutes” service for the most impatient consumers. Already, this has bigger weight than Style.com ever did. Handbags at dawn? It looks like that fight has already been won.
