E-retailers must focus on their specific goals and examine a vendor’s reputation and market expertise, not referrals.
The e-retailer plans to use the funds to expand internationally.
The shoe, handbag and apparel retailer, which added operations in Germany earlier this year, says it plans to use the funds to expand into other European markets, starting with the United Kingdom in September and two more undisclosed countries by the end of the first quarter of 2013. The German and U.K. sites will each have a distribution center in their respective countries. Those two European distribution centers will then likely service the other markets JustFab moves into, says Adam Goldenberg, the retailer’s co-CEO.
Since launching its German site, JustFab has found that its German customer acquisition costs are lower than those in United States. Goldenberg attributes the difference to a more developed ad market in the United States, as well as being among the first retailers of its kind in Germany. In the United States, JustFab competes with fast-fashion retailers such as ShoeDazzle and H&M. Fast fashion refers to merchants that translate the latest fashion runway styles and get them into stores quickly. Goldenberg says there are fewer such retailers in Europe.
The funding will allow JustFab to expand its product categories, as well as fund acquisitions that would help it move into more challenging markets, such as Brazil, where the country’s high import tariffs make JustFab’s current business model unworkable, says Goldenberg. “We might also acquire companies in countries where we don’t understand the fashions people want as much as we do in the U.S. and Europe, like Asia,” he says.
JustFab earlier this year moved from selling shoes and handbags solely through subscriptions to a hybrid model that enables non-subscribers to pay a premium to purchase items on JustFab.com.
The funding round included all of its existing investors—Matrix Partners, Technology Crossover Ventures and its parent company Intelligent Beauty. The round brings the company’s total funding to $139 million.