Los Angeles Business Journal

Online Vendor Looks to Click With Euro Markets

RETAIL: JustFab expands overseas toehold with acquisition of Fab Shoes. By Natalie Jarvey Monday, May 27, 2013

Goldenberg said at the time that he wanted to follow in the footsteps of retailers such as Gap Inc. that have added children’s lines. He was also attracted by the opportunity to turn FabKids-wearing tots into future JustFab customers.

When JustFab introduces the FabKids line in June, it will be the company’s first new product line since it launched denim in 2011.

Brand consultant Denise Lee Yohn in San Diego said JustFab has been smart to keep its product offerings limited. Critics have questioned the strategy of Santa Monica competitor BeachMint, for example, as it has rapidly expanded from jewelry to other varied categories, including skin care and housewares.

“What has been really good on JustFab’s part is that they’ve stayed very focused on their core and executed well on those categories,” Yohn said. “When you’ve got a site that sells shoes and home décor, it doesn’t instill a lot of confidence with consumers that you know what you’re doing and that you have expertise in those categories.”

Since Goldenberg founded JustFab with business partner Don Ressler in 2010, the company has expanded to 700 employees and more than 15 million members, up from 10 million in January.

They say JustFab had $100 million in revenue last year. That number is expected to climb to $250 million this year. Also, the company’s core North American business is expected to turn profitable.

A large part of the growth comes from the company’s expansion into Europe, where there are fewer subscription e-commerce competitors. Santa Monica’s ShoeDazzle launched operations in the United Kingdom in 2011, but shuttered the business after only four months.

JustFab board member Josh Hannah, who led Matrix Partners’ investments in the company, said European customers have been responsive to the subscription model.

“Their growth is primarily driven by having a great product at an unprecedented price,” he wrote in an email. “This benefit is magnified in Europe where retail is even less efficient, and that’s led to enormous early success.”

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