Today Jack Erwin, an upper-end male shoe ecommerce play, announced that it has raised a $2 million Series A led by Crosslink Capital. The funding event was participated in by Shasta Ventures and Menlo Ventures.
Just as technology and politics are finding themselves increasingly intertwined, so too are technology and fashion becoming increasingly close. I find this personally unnerving as I know essentially as much about fashion as do most politicos, but the crossover is a reality.
The linked space is also becoming quite well funded. In December of 2013, Warby Parker picked up a fresh $60 million from a number of investors, expanding the capital invested in its mix of eyeware and ecommerce to more than $100 million.
Jack Erwin is a play to take the same success that Warby Parker has seen with glasses, and apply it to the men’s shoe business.
The firm is interesting given that its investing groups are better known for their technology bets than their forays into the sartorial. Still, Jack Erwin wants to apply distribution techniques used by other technology-fashion hybrids to its selected niche.
How goes it thus far? The company’s initial foray into product saw the group create, and burn through, an initial set of 3,000 pairs of shoes. Given an average price point of around $200 — a number I cribbed from its website’s listed prices and a conversation with its founding team — Jack Erwin has already generated more revenue than many a failed startup.
The company has thus far leaned on positive initial press coverage from the fashion media space, and doesn’t intend, it told TechCrunch, to spend its new capital on advertising. Instead, the funds will be deployed to expand its line of men’s shoes, and develop its brand. I can’t comment on the latter as fashion branding is beyond my competency.
That said, the company’s business model, a play that removes middle players to help it deliver a superior or commensurate luxury good at lower price points, is interesting. The group’s manufacturing is in Portugal, where it maintains local quality control, and its distribution hub resides in greater New York, so it can deliver its own goods without the need of third-party retail space to hawk its wares.
So, and I hate to use an aggrandizing analogy, just as Tesla has worked to eliminate dealers and sell directly to consumers, so does Jack Erwin want to vend its footware to its customers.
The company has no current plans to expand its set of goods to women’s shoes, or other fashion elements. In the view of its executives, the market niche it has selected is large enough to support rapid expansion. The company currently has 2,400 people on its wait list for more supply.
Given an early sell-through and a wait list, it appears that the firm has hit on a model that at least works at its current volume. The old joke that sales is easy, and supply chaining is hard fits; scaling its business to new volume will not be an easy task for the firm.
That, and how it can grow its brand will potentially require capital expenditures. Early media attention will extend momentum only to a certain threshold. The company can also lean, as it does, on a Zappos-level bent of returns and service, but such methods are expensive.
The $2 million in hand will likely provide enough capital to prove that its model can scale, but not too much more. Expect the company to return to the Valley for more cash if it hits its numbers.
That prickling you feel on the upper slopes of your back is the fact that the line separating was tech, and what was not tech is becoming increasingly blurred. Perhaps that is a good thing,
Top Image Credit: Jack Erwin