Whilst general retail spending in the western world declines or stagnates at best, there are pockets of trading which are holding up surprisingly well.
Luxury fashion, online retail and social shopping are all booming in popularity and Stella & Dot Founder Jessica Herrin believes her business has come up with a potent way to mix these trends together.
The North American fashion accessories business has grown turnover from $3.8 million (£2.4 million) in 2008 to $250 million today by selling its products online and directly in people’s home, and now the expanding retailer has the UK market in its sights.
Herrin is certainly not lacking in confidence and when asked about the future possibilities for her firm, she replied in an instant: “Stella & Dot is a multibillion dollar fashion brand that changes lives of women around the world.”
This may seem like a bold claim for a business that started out of Herrin’s living room eight years ago, doing personal demonstrations to other women of her range of fashionable yet affordable jewellery and handbags items.
Demonstrations like these, or trunk shows as Herrin calls them, have been the bedrock of Stella & Dot since inception, with the company recruiting thousands of other women to sell the products in the same way across the US and Canada.
Her sales representatives are referred to as stylists, and Herrin, who also co-founded e-commerce solution Weddingchannel.com, believes that the business offers modern women a unique opportunity to make money on their own terms.
“We have enabled 10,000 independent entrepreneurs to launch their own Stella & Dot business in the US, where they can work flexibly at home offering our accessories and we excited to today bring that opportunity and our fashion line over to the UK,” Herrin explained.
“I wanted to start a business that would be a better business platform for the modern woman, and decided that a lucrative business that was more savvy and smart was one which blended the offer from the online world into a new, better business model.”
Quality products are vital for the business model to work, with money saved on bricks and mortar invested in designers, and the brand has secured a number of celebrity endorsements and been featured on the Gossip Girl TV show and in magazines such as Vogue, In Style and Marie Claire.
Kurt Gieger is a fashion retailer which has done very well in the ‘everything but the dress’ market of late, and Stella & Dot also targets women looking to revitalise an old dress with carefully selected accessories.
Herrin added: “People are always willing to pay for quality but what gives us an advantage is women can take a dress out of their wardrobe that they have not worn for two seasons, match it with one of our accessories and make it trend relevant again.
“Accessories are a way for people to update a wardrobe which may not be as refreshed as it was in other economic times.”
Serious European expansion looks on the cards now with a new distribution centre opening up in the Netherlands, Stella & Dot promises delivery in three days, and a new London office staffed by locals.
Herrin has been touring her trunk shows over this side of the Atlantic for about a month or so now, she hopes to have around 500 UK-based stylists working for the business by Christmas, and targets a first year turnover in this country of £50 million to £75 million.
Ambitious stuff, but she believe such rapid expansion is possible thanks in part to the impact social media is having on retail and Stella & Dot tries to use this medium as much as possible.
“You really could not have built a business like this, so fast, ten years ago,” Herrin admits.
“First we had e-commerce which changed everything for retailers and now we have social media and because it is so popular it has produced a whole opportunity.
“We are building our business around social commerce and train our stylist how to use social media and that is all part of our online university platform.
“My business first spread through word of mouth after doing trunk shows but social media amplifies word of mouth, it gives everyone a megaphone.”
The UK market is not the most buoyant at present but if Stella & Dot achieves its aims it will show how savvy retailers with innovative initiatives can still prove successful in challenging times.