Moda Operandi, Online Seller Of Six-Figure Fashion

On the front wall of Moda Operandi’s otherwise sleek, modern, downtown Manhattan office is a cast-iron dinner bell with a rope pulley. Whenever theluxury online fashion retailer made a sale over $20,000, CEO Deborah Nicodemus would ring the bell to the cheers of staff at Moda, as the five-year-old e-commerce operation is known.
But over the last 14 months Nicodemus watched the percentage of $20,000-plus purchases — embellished gowns from Spanish couturier Delpozo, for instance, or in one record-setting case, a $413,000 ruby necklace — climb from zero to more than 10% of Moda’s total business. The bell now waits until a shopper spends $50,000.
Soon enough, however, even that figure may prove too low. In 2015 Moda had $68 million in revenues, up from $46 million the year before. By 2020, Nicodemus tells FORBES matter-of-factly, the company will take in $500 million. “We’re on track to do that,” she says. “We deliver on our commitments. It’s not just a document. It’s not just a plan.”
Part of that plan includes Moda’s first bridal collection, which launched last spring after the team discovered that eight of its bestselling gowns of 2014 had been white. Wedding dresses from sought-after labels such as Monique Lhuillier and Naeem Khan can easily cost more than $10,000 on their own, but add a pair of heels, a clutch and jewels and the order value skyrockets for a bride’s big day. Moda can also take the process offline by offering private appointments at its showrooms in New York and London.
Moda Operandi launched in 2011 as the solution to a first-world problem of the highest order. The wealthy, thirtysomething women who make up its loyal customer base could sit front row at every Fashion Week show, but when it came to purchasing runway looks, they were at the mercy of buyers at high-end department stores.
“Bergdorf Goodman will offer ten looks per collection and they’ll be the more conservative staple pieces,” says Lauren Santo Domingo, Moda’s cofounder and the fashion insider yin to Nicodemus’ business strategist yang. Santo Domingo trained as a market editor at Vogue (“the Goldman Sachs of the fashion world,” she calls it) before heading up PR at Carolina Herrera’s fashion house.
Santo Domingo and cofounder Aslaug Magnusdottir, an Icelandic entrepreneur, conceived of Moda as a members-only online trunk show, a luxury counterpart to the flash sales sites like Gilt Groupe and Rue La La that dominated e-commerce at the time. Women could preorder looks they saw coming down the runway directly from Moda rather than waiting to see which pieces a department store would select.
Moda partnered with designers and fashion houses, many of whom had no online presence and were relieved to be able to outsource it. Just as enamored with the business model: investors, like Tony Florence of New Enterprise Associates, the venture capital firm that led Moda’s 2011 Series B and remains the largest shareholder.
“There were no alternatives,” Florence says. “There was really no place, other than Net-A-Porter, and they were getting so big that they had become mass-market. That left a big white space.”
Moda had raised more than $78 million by the time Magnusdottir bowed out in 2013, to be replaced by Nicodemus, a branding and merchandising expert who had spent 16 years at French luxury conglomerate LVMH.
Since Nicodemus came on board, the gulf between Moda and its competitors has only widened. Net-A-Porter, while still the largest player in online luxury, saw its founder and top executives resign before a merger with Italian e-tailer Yoox. In a bid for younger shoppers, Net-A-Porter launched beauty and sportswear lines in 2013 and 2014, respectively, bringing its average order amount down to about $760.
That figure is staggering given that the average online basket size in the U.S. is $78. But it’s nowhere near Moda’s average purchase of $2,000, which goes up to $7,800 during the various Fashion Weeks, when shoppers are more inclined than ever to order a head-to-toe look. “Women are saying, specifically, ‘I want Oscar de la Renta look number 13,’ ” says Santo Domingo. “ There’s no one else doing these numbers.”
Over the past two years under Nicodemus, Moda has invested in technology to enable women to spend vast amounts more easily and seamlessly. The site wasn’t even searchable in 2013. Now shoppers can create a Fashion Week wish list on Moda’s app, receiving a push notification when a beloved look becomes available — typically an hour after the runway show ends.
Last year Moda raised a $60 million Series E, bringing its total venture capital funding to just under $140 million. Its international growth inEurope and the Middle East is outpacing its U.S. performance; overseas sales now represent 30% of revenues, but Nicodemus expects that number will soon be 50%. She is also looking to open an invitation-only showroom somewhere in the Middle East to service VIP clients similar to the one it operates in London’s Belgravia, a favorite haunt of royals and oligarchs.
It was in London that Moda sold that $413,000 ruby necklace, its most expensive item to date. That record may not hold for long: There’s a pair of $480,000 yellow-and-white diamond earrings on the site waiting for a buyer. They’re one-of-a-kind, unavailable anywhere else. The bell is waiting.