On Track for $100M in Sales, JustFab Adds Features and Launches in Germany

Today online shopping platform JustFab is expanding its feature set and international reach, announcing the platform’s launch in Germany and debuting an online community and a new pay-as-you-go payment option. The company, which was started by Adam Goldenberg and Don Ressler and counts Kimora Lee Simmons among the celebrity stylists, has over six million members and has been growing at a rate of 500,000 members per month. The company sold $25 million worth of shoes, bags, jewellery and accessories in 2011, and is on track to surpass $100 million in sales in 2012, with 200,000 shoes and bags sold in February alone. It also announced its acquisition of Heels.com in March.

The company was started by Adam Goldenberg, the former COO of Myspace’s parent company Intermix. It was during his time there that he met his co-founder Don Ressler and they started Intelligent Beauty, an incubator for ecommerce companies that launched in 2006 and now has over 600 employees and $400 million in annual revenues. JustFab is the third company launched by Intelligent Beauty, with headquarters in LA, a fulfillment center in Louisville, KY, and an office in Charlotte, NC.

Similar to competitor ShoeDazzle, which has raised over $60 million in funding, JustFab members fill out a style quiz, register for an account, and are then shown a curated collection of shoes and handbags tailored to their tastes. Users can then choose to order any of the items for $39.95 each, with free shipping within the continental U.S. Up until today, when a user made their first purchase on JustFab they were automatically signed up for a monthly membership, which required members to buy one item monthly or opt out of the selection by the 5th of every month. Now users have the option to buy a single item, or to opt into the membership model, though single-purchase items cost $49-69 each. Anyone who chooses to sign up for a membership is sent style selections on the first of every month, and if they don’t decline a month’s selection by the 5th of each month, they are charged $39.95 and can redeem that credit for an item of their choice.

Today the company is adding a JustFab community, where shoppers will be able to post photos of their outfits, ask questions, and offer feedback to other members. The platform also offers shoppers access to 150 fashion consultants, full-time JustFab employees who answer questions and offer style advice. The fashion consultants create “monthly boutiques,” online spaces where they tell users why items are popular, which celebrities are wearing the trend, and offer tips on how to wear items. They also have a celebrity style panel, which includes Kimora Lee Simmons. “We like to look at ourselves as a combination of a personal stylist service and a lifestyle brand,” founder Goldenberg said in an interview. “We think this community will make it more like going to the mall and shopping with your girlfriends.”

The company launched in Canada last month with a featured collection by singer Avril Lavigne, and opened a Berlin office six months ago in advance of today’s German launch. “The German market is very, very different, so we had to make sure we got the styles right, that we explained the program right,” he said. “In the U.S. people are becoming familiar with these subscription fashion services. In Germany we’re really the first major player.” The company plans to expand to other countries in Europe later this year.

Competitor ShoeDazzle recently announced that they were moving away from a monthly subscription-based model, but Goldenberg thinks it’s still a viable model, and in fact he says that while his competitor moves away from a subscription-based model, they are more focused on membership than ever.

“With [ShoeDazzle’s] recent announcement, I think they’re going more towards this traditional retail route, and we’re actually going the exact opposite direction,” Goldenberg said. “ShoeDazzle obviously got to the market quite a bit sooner, but we’ve been able to completely close that gap and potentially be the largest player in a pretty short period of time.”

Goldenberg said JustFab members come back to look at their personalized selections over 30 times per year, and they offer member perks like party invites and special pricing. “This is very different from what some of the competition is doing,” Goldenberg said. “We’ve been trying to add more value, and more and more reason to be a subscriber. That’s what makes us unique – there are a lot of places out there you can buy shoes.” Though he does say that the subscription model doesn’t match every shopper’s taste, which is why they added the pay-as-you-go option.

With pricing, features and a celebrity marketing strategy similar to ShoeDazzle and other site like BeachMint‘s brands, Goldenberg admits that the competition is fierce. But he says that while the company does have online competition, their biggest competitors are actually offline retailers like Zara, H+M and Forever 21.

“We definitely view our major competitors being the offline retail guys,” he said. “If you look at the hundreds of billions of dollars of sales that are happening there, that’s our opportunity to grab market share.” Launching internationally and encouraging membership as other sites move towards a traditional retail model could be what sets the company apart, but the competition will no doubt only get stronger as new companies launch online, and offline retailers attempt to improve their online presence.



Erin Bury

Erin Bury

Erin Bury is a Co-founder and CEO at Willful, an online estate planning platform. Also a former Managing Director at Eighty-Eight, a creative communications agency based in Toronto. She was formerly the Managing Editor at BetaKit. Follow her on Twitter at @erinbury.

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