![]() Revolve needs to be able to sell more name-brand merchandise. Clothes matter, products matter, and at the end of the day, Revolve was unable to keep up. Many people have argued that Revolve’s position as an online-only retailer alone is the greatest advantage a brand could have, but that is simply untrue. This is in contrast to its activewear and loungewear segments that radiated strength throughout the quarter. The reasons behind this decline happen to be that the company sells a lot of formal-wear clothing, dresses, and skirts that have fallen out of fashion in the pandemic. For the entire third quarter, net sales declined 2% year over year. International net sales increased by 18% year over year, but net sales in the U.S. While it's understandable that the company is now facing more competition from physical retailers moving into deeper digital penetration, these numbers are still surprisingly low. If customers assume or know you for elaborate skirts and dresses, they won’t be as interested in your loungewear and activewear assortments.įor being an online-only retailer at the time of the pandemic, the numbers were slightly disappointing. It doesn’t market its more casual clothes nearly enough, and that has hurt the company.Ī broad view of a brand is always a good thing, it makes the consumer realize that they always have more to find and explore at your brand. However, the company is trapped in a box that it created. Revolve brings something different to the table, and that’s new clothing from brands that most consumers have never seen before, and new items of clothing that are visually and aesthetically pleasing. The company is also facing even more social media integrated companies such as PrettyLittleThing and Missguided, which I talked about in a separate article, and is now unable to turn positive net sales growth. Revolve is both a streetwear and formalwear company, but it has been branded as having only fancier-style clothing. It always comes down to marketing - influencers are great but consumers need to understand what your brand is about and how it relates to them. In order to beat competition from more digitally inclined mega-retailers such as Nike ( NKE) (even though Nike is sold at Revolve), the company needs to have more exposure and marketing. However, at this time, the disappointing revenue numbers with the high valuation indicate holding off for a just little while. ![]() Revolve does have unbelievable gross profit margins, and despite a high valuation of a 35.4 P/E ratio, the stock has potential to increase revenue and consumer bases. ![]() It seems to be struggling to market itself to a wider array of consumers, and along with that, the company is now facing more competition from previously underdeveloped digital players that have now thrust into the market following pressure on physical stores. The company did not achieve that prophecy, with disappointing revenue numbers for an online-only retailer. Revolve Group ( NYSE: RVLV) had the opportunity to be a breakout star this pandemic. ![]()
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