Hey there! It's me Ashley, here with another scrumptious IPO article ready for your mental consumption! Over the last couple of week we have learned about all sorts of companies from all sorts of different sectors. Let's step away from the tech IPO's for a bit and detour into the retail sector and learn about one of the newest IPO's, Revolve Clothing!
I had to do a bunch of research on this company as I have never actually heard of it before! And interestingly enough, there isn't a lot of information in one place about this one, which is slightly concerning but let's jump right in anyways. Revolve was founded in 2003 by CEO's Michael Mente and Mike Karanikolas and is an e-commerce clothing brand, based in Los Angeles. Despite the clothing/e-retail space being pretty iffy, Revolve seems to be doing something right as they are charging ahead and making quite a splash in the industry.
Obviously Revolve as a retailer is pulling in money by selling their products, which range from everything from dresses, blouses, purses, hats, beauty products and more. Right now Revolve pulls from a few larger brands, but has 19 in house brands in their line up. According to Revolve, "We have built a portfolio of 19 owned brands, each crafted with unique attributes and supported by independent marketing investments. We believe our consumers perceive these as highly desirable, independent brands, rather than private labels or house brands. As a result, during the 12 months ended June 30, 2018, our owned brands represented eight out of our top 10 brands, 27% of the REVOLVE segment’s net sales, and three out of the top five brand search terms on external search engines that led to a purchase." In 2017, Revolve broke into the billion club and boasted over $1 billion dollars in sales. If you take a look at their balance sheet you also see that their sales almost quadruple every year. You can definitely see why Revolve is making waves as they seem to have broken the retail code.
So now it comes to this. What is Revolves edge? And the real answer from me. I have no clue. Maybe its the lack of information on Revolve but I don't quite understand why they are doing so well. Revolves top competitors are other online clothing retailers such as ASOS, Nordstrom, NastyGal, the list is literally endless. Perhaps its just right timing with CEO's that understand the exact market they want and go out and get it. Revolves edge, in my opinion, is how it markets. Instead of using traditional marketing tactics, it uses almost exclusively online influencers on Instagram. They have noted that in many cases some of their smaller influencers are accounting for quite a bit of their sales. According to Forbes, the company credits its influencer marketing strategy for bringing in as much as $650 to $700 million revenue a year. Their costs of marketing are only a fraction of other companies as influencers are paid so much less than say a commercial or marketing campaign with ads. Which means more money to keep in house. Plus most marketing is done via instagram which is where their target market of millennial women spend most of their time! Pretty brilliant.
RVLV made it's stock market debut on June 7, 2019 at $18 a share. I am definitely interested in seeing how this one trades. Half of me hopes that Revolve's stock is going to do something spectacularly different from it's competitors, but the other half of me doesn't believe this will be very different from the other charts in its sector. Time will tell. But that doesn't me it is not trade-able. Me personally? I don't think I will be trading this one, probably ever, unless with a quick day trade. Why you may ask? The simple fact that I don't know a single soul who has ever used, purchased, mentioned, shared or spoken about them. I have never heard about Revolve until the IPO was announced and haven't heard about them since. And myself and my friends are their target market. But if you use them, hey, the stock is there for you ready to trade :)
Thats about it for me folks. Thanks for listening and if you have an IPO's you are interested in, send them my way. You are amazing! See you soon :)