With $1.5M raised, Carnet de Mode Founder Arbia Smiti discusses past, present & future

May 27, 2013
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International fashion marketplace Carnet de Mode has announced a $1.5M round of funding led by Elaia Partners. In addition, the fashion startup made public for the first time their seed investors – Pascal Chevalier & Marie-Christine Levet. Founded in 2011 by Arbia Smiti, Carnet de Mode works today with over 200 designer stores and 6000 exclusive fashion items, seeing 50% growth month over month in sales and customers, publishing 30 new designers each month into its catalogue.

Looking to become an international “discoverer” of emerging brands, Carnet de Mode offers brands access to an international audience, and that audience access to emerging brands – it seems both sides win, as long as Carnet de Mode can attract the best brands.

I sat down with Arbia to talk about Carnet de Mode’s past, present & future.

Arbia Smiti, Founder & CEO of Carnet  de ModeWhat path brought you to launch a Fashion startup?

After my engineering studies and my MBA in marketing at ESCP, I worked as a marketing manager at L’Oréal Group for a year and then decided to launch my own business in e-commerce. I am very passionate about fashion and had launched a fashion blog in 2009: carnetdemode.fr in parallel to my work. So obviously, creating a startup in fashion came naturally. Since I hadn’t any knowledge in e-commerce, I decided to work as a purchasing manager for a flash sales website for a few months to learn all the e-commerce processes from inside before jumping in a big adventure like Carnet de Mode. What I learned is:

  1. Most of e-commerce websites are not profitable because of the big expenses of logistics, photo shooting and stock purchasing before selling and the small margins they take
  2. All e-commerce websites sell known brands and this market became totally saturated and needs lots of financial investments to get known brands online (negotiating with brands, buying stocks beforehand, lots of competition,…)

So I decided to go to a new nascent market: Young emerging designers (rare competition, easier sourcing and a fast growing market) and to create a marketplace instead of a traditional B2C e-commerce website so that all logistics, photo shooting are totally handled by the designers themselves from any place in the world to everywhere.

What’s the vision behind Carnet de Mode?

The idea of Carnet de Mode was to create a curated international marketplace for all independent and talented designers. A platform where fashion lovers can find all kind of unique and original collections (ready to wear, accessories, jewelry,…) from professional designers. So we planned a 3 steps strategy:

1st step in 2011: For very young designers who have difficulties to produce their first collections:
We created a laboratory experimental platform called “Pre-collections” to showcase future collections (6 months to a year before the season) of handpicked young talents and we invited all fashion lovers to pre-order their favorite pieces for 40% off their future retail price and wait for a quota to be reached before launching the production which finances the production of the designer collection by the customers themselves and help the designer getting an instructive feedback about his collection beforehand.

2nd step in 2012: For young designers who already produced their collections and sell them in many physical multibrand boutiques:
We launched the marketplace in French and in English to offer these designers a very user-friendly plug and play storefront that enables them to create instantly their own corner on our platform and have an online boutique for free and an expert team that will invest in marketing and communication to help them get the exposure they need (PR, partnerships with medias, social medias,…) and attract international customers to buy their collections. The designers edit their collections by themselves and we manage to check and translate before publishing their collections. We also handle customer service and we act as an intermediate between designers and customers all over the world. The customer then receives his order from the designer atelier directly with a customized packaging and personal message from the designer to help create the intimate relationship we aimed to form between designers and their fans.

3rd step in 2013: For established and known designers, we are launching very soon a boutiques segment on our marketplace to offer the same services to multibrand physical boutiques in Paris and then the rest of the big cities in the world to reach established designers through the boutiques who own their collections and can manage logistics instead of them. We help boutiques to have an online corner for free as well and large investments in marketing and communication to help them get exposure and attract new customers they couldn’t reach before locally. We help them sell their catalogue on an online distribution channel and we help customers buy from their favorite boutiques from anywhere in the world.

Where does CDM fit in relation to traditional Fashion e-commerce sites? What about “social curation” sites like Lyst, Fab, or Pinterest?

I think CDM could be very complementary to traditional fashion e-commerce sites since our catalogue is unique and exclusive and could complete any traditional fashion catalogue of established brands to add a new offer that is becoming necessary with the new generations who are looking for a different sourcing and getting a unique and avant-garde fashion.

We also curate designers directly and we offer permanent boutiques and not a one-shot or flash-sale like Fab and we offer more and new services than the traditional curation sites which justifies also our margin of 50% higher than the small margins of the other marketplaces that offer only the online platform.

What about CDM interested Elaia and others to invest $1.5M? What will this money allow you to do?

Elaia and the other investors were very seduced by our unique positioning and our innovative business model that help us get high margins and take less risks and financial investments as the traditional e-commerce websites. I also think that they first invested in me personally and had faith in my abilities to revolutionize this business in the future.

This financing round will enable us to hire senior profiles to strengthen the team and invest in marketing to grow our community of customers worldwide and to further develop our services for fashion designers.

Do you think getting brands and designers behind you will be difficult?

Today, we offer a risk-free solution to the emerging designers (free online boutique, free exposure and communication about their brands and style, investments in marketing to attract for them customers worldwide) so that they can focus on designing and creating exquisite collections without financing. There is a big need from thousands of designers everywhere for a service like ours. Today we receive more than a hundred applications from designers each month thanks to a positive word of mouth between designers.