From over in Germany, news of a cash injection in the fashion world that could have repercussions in e-commerce: the private equity firm AXA has taken a majority stake in Schustermann & Borenstein, a family-owned firm that focuses on exporting clothing, but also operates Best Secret, one of the more exclusive, and (by the sounds of it) lucrative, private buying clubs on the continent. The investment, thought to be worth some €200 million ($248 million), could see Best Secret expand its model beyond its current German home market to elsewhere in Europe, where private buying clubs have been a hit with consumers.
The AXA investment was first reported by Reuters, which noted first murmurs of the deal back in July. The investment values the fashion house at about €300 million ($371 million), and the two families who started the business will continue to hold on to the remainder of the business.
Schustermann & Borenstein has established a business in the area of clothing export to Eastern Europe and other parts of the continent, but it has also built up a business selling clothes at retail level through a members-only model. It has two private stores in Munich, this is where Best Secret fits in.
In an e-commerce market that has largely focused on scaling up to win (recent funding for JustFab and ShoeDazzle’s trumpeting of 13 million members yesterday are only the most recent examples of that), Best Secret takes a completely different approach.
According to Deutsche Startups, the site makes a point of limiting its membership to only 250,000 users — it stops accepting new people after that point until existing members leave — and it only lets people join by invitation. Those invites are generated either by the companies who feed stock into the site, or through other members. Memberships require users to spend a minimum of €150 annually on clothes, and in 2011 the company was reported to have made €60 million in sales.
As for the stock, the site notes that it currently features 7,000 products from 900 brands, covering apparel for women, men and children, with discounts of up to 80% on items.
Online private buying clubs have been a hit with consumers in Europe, with companies like France’s Vente Privee and KupiVIP in Russia. Vente Privee has been looking to take that model to the U.S. as well.
We have reached out to Best Secret to see if it can give us updated figures on its user numbers and revenues, and whether it will be using some of this new investment to extend Best Secret to other markets outside of Germany.
AXA Private Equity - an AXA Investment Managers company - is a diversified private equity house and is fast becoming a significant force in the international private equity markets, with offices in Paris, Frankfurt, London, Milan, New York, Singapore, Zurich and Vienna. With over $25bn of assets under management, they provide investors with funds across the full range of private equity offerings: fund of funds - primary, early secondary and secondary; direct funds - infrastructure; LBO mid cap and small...
BestSecret is a small and exclusive shopping community. Members cannot apply for BestSecret but are instead recommended for inclusion by select premium partners. We offer our members brand and designer merchandise discounts of up to 80%. Our range includes fashion for men, women and children, with over 7,000 products from more than 900 brands. As a subsidiary of a textile wholesaler, we have better relationships with suppliers than any other company. With the diversity of designers, the huge price advantage,...