Fashionistas everywhere are turning their heads in surprise – and not because someone in a great outfit just walked by. Rather, the online apparel giant Revolve has finally filed for a highly-anticipated IPO that’s set to bring in millions of dollars for the millennial-focused company. The fashion giant has developed quite a reputation for itself as a disruptor in its industry and continues to heavily mine data to better target its consumers with avant-garde fashion products.
Here's everything you need to know about Revolve, its millennial-centric business model, and how the company intends to navigate the stormy water of the financial world leading up to its market debut.
Revolve Wants A $100 Million IPO
The most important aspect of Revolve’s (NYSE:RVLV) forthcoming market debut is likely its price; the company hopes to garner in some $100 million in revenue when it goes public. According to documents filed with the SEC, Revolve is confident that is tech-savvy business model founded on extensive data mining and the micro-targeting of niche-audiences will convince investors that it’s a safe bet for the foreseeable future. Looking in the direction that the broader fashion and apparel industries are heading, and it’s hard to doubt that the company has some serious potential.
That’s because a tremendously large amount of contemporary apparel purchases are already made through e-commerce operations similar to the one Revolve is running, and that trend’s only set to grow in the near-future. As a matter of fact, there are good reasons to believe that the future of how we shop, whether we’re talking about clothing or virtually any other product, lies in the digital realm of e-commerce. A retail revolution has disrupted the fashion industry, with a whopping 27 percent of all apparel purchases now being made online.
In order for Revolve to cash in on this boom in e-commerce, however, it first has to win over the confidence of investors by demonstrating that its own house is in order. In that realm, the company will have few difficulties, largely thanks to its mostly-positive track record thus far. According to S-1 filings made with the SEC ahead of its debut, Revolve is already profitable, and is on course to finish this year with over $1 billion in online sales. The company’s dynamic digital platform helped it report sales of $399.6 million in 2017 alone, helping it pull in a net income of $5 million already. While many tech investors prepare themselves to throw their financial heft behind a company struggling to profit using international money transfers, those backing Revolve will be banking on a horse that’s already pulling ahead in the races.
Can The Digital Revolution Be Sustained?
Just because Revolve has put on a good show thus far doesn’t mean the company will continue to do so in the future, however. The digital revolution is, by its very nature, disruptive. Revolve could be replaced by an up-and-coming e-retailer in the same fashion that it once replaced many traditional brick-and-mortar fashion hotspots. Similarly, an inability to pivot away from the company’s core audience of millennial women could handicap its future profitability.
Still, these are all relatively mild hurdles that the company needs to surmount in order to succeed compared to what most of its competitors are going through. Revolve is already profitable, has demonstrated an immense level of tech-savviness which helps it reap in huge sales figures, and clearly has some staying power in the market, largely thanks to its extensive investing in a network of social media influencers.
Influencers, or young social media experts with huge online reputations who can successfully peddle products to their eager followers, are at the center of Revolve’s success as a fashion giant thus far. The company has even orchestrated immensely expensive trips to exotic locations abroad to better showcase certain products, all because platforms like Facebook (NASDAQ:FB) and Instagram, laden with aesthetic shots of models wearing Revolve products, are huge when it comes to reaching an audience of young consumers. Revolve has carved out a healthy chunk of the millennial women’s market for itself already, and continues to refine its data operations to more effectively microtarget these consumers with ads on their social media feeds in the future.
It’s imperative for Revolve’s future that the company maintains its influencer edge in the market to drive off competitors and expand its current dominance of the apparel sector of e-commerce. Without its Instagram-ready influencers to help push its ceaseless piles of fancy clothes, Revolve isn’t particularly unique nor powerful in a competitive, cut-throat industry. Currently, investors have every reason to believe that those running the show at Revolve are taking the issue of influencers seriously and will continue to do so in the near-future. As the fashion giant rushes headfirst towards its market debut, expect plenty of well-deserved chatter and praise to surround Revolve’s forthcoming IPO.