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Lauren Santo Domingo (Image: Jason Schmidt)<\/p>\n
These investors began betting heavily on up-and-coming apparel-and-accessories brands such as Copenhagen-based Ganni, which sold a majority stake to L Catterton (LVMH\u2019s investment vehicle) in 2017; and Los Angeles-based Anine Bing, which raised $15m (\u20ac12.9m) in 2018 in a series-A round led by firms such as Felix Capital and Index Ventures \u2013 and $13.5m (\u20ac11.6m) less than a year later.<\/p>\n
\u201cAt any start-up event, the conversation was always about how much money you raised and how many people you hired \u2013 as if those were the only metrics of success,\u201d says Noura Sakkijha, who founded jewellery start-up Mejuri in 2015, during the industry\u2019s private-equity boom. \u201cThis was a time when funding seemed unlimited if you were a fashion entrepreneur.\u201d<\/p>\n
Equally, investors had full confidence that they would receive their returns tenfold by simply opening more shops and boosting production of existing bestselling products. But this strategy diminished the importance of innovation and customers grew tired of seeing the same products, as well as shop concepts being copied and pasted, around the world. At the turn of the decade, revenues slowed and investors began to realise that quick returns are almost impossible when it comes to an ever-changing industry that\u2019s reliant on storytelling and consumer psychology.<\/p>\n
It\u2019s why L Catterton<\/a> has pulled back on most of its fashion investments, including the sale of sustainable-clothing label Everlane to fast-fashion giant Shein (a controversial move because of a clear misalignment in ecological values). US-based label Reformation \u2013 another product of the 2010s investing boom \u2013 started trading publicly in July, with its stock price continuing to fall below market expectations. As for Apax, it sold Matches for \u20ac60m to the UK\u2019s Frasers Group, which declared the company bankrupt shortly afterwards.<\/p>\n These public fallouts have transformed the current landscape. The entrepreneurs who managed to make it out are buying back their businesses and rethinking the pace at which they want to operate, while investors looking to make quick exits are staying clear of fashion. \u201cWe were lucky to get out alive and put our private-equity days behind us,\u201d says Santo Domingo, who was able to exit her partnership with Apax and refocus on her original business model and the company\u2019s home market. \u201cAny brand that is still doing well today is staying true to itself \u2013 hype is becoming hard to sustain.\u201d<\/p>\n In place of that hype-based businesses is a new generation of brands that are returning to fundamentals: customer-centric approaches and understanding the value of ownership and creative control. In the United States, designer Jamie Haller has been building her company at pace. Her namesake clothing-and-accessories brand grew 450 per cent between 2023 and 2024 \u2013 without taking on any outside investment since its launch in 2020. \u201cIn an age of hedge-fund brands, AI-generated content and faceless marketing, what I\u2019m doing feels intimate,\u201d says Haller, whose brand stands out for its polished suiting and smart penny loafers. \u201cI write my newsletters myself every night; customers can talk to me. These small moments of connectivity give customers a place to land.\u201d<\/p>\n Haller makes a compelling case for the benefits of a self-starter approach in a business\u2019s early days. It also signals a broader cultural shift towards independent brands<\/a> with a clear mission statement. \u201cEntrepreneurs are valuing ownership, control and bootstrapping more so than before, which is refreshing,\u201d says Eshita Kabra-Davies of By Rotation. In the past decade, she pursued several rounds of investment for her fashion-rental start-up but stayed focused on her original peer-to-peer business model. As a result, By Rotation is on its way to reaching profitability: \u201cI always think about my ownership and the alignment of the potential investor with our mission and values,\u201d she adds.<\/p>\n Elsewhere, Mireia Llusia-Lindh, the founder of contemporary accessories label Demellier, argues that raising capital is still a necessary step for any ambitious entrepreneur who wants to build a global enterprise \u2013 but today partnerships are being formed on different terms. \u201cMore people are recognising that raising capital does not necessarily mean building a better company,\u201d says Llusia-Lindh, whose brand\u2019s sales grew 60 per cent last year, despite tough market conditions and an investment drought. \u201cYou need to build a company for long-term growth, not just for the next two years. Building a fashion brand, in particular, takes time. You can accelerate distribution or marketing but you cannot manufacture genuine customer connection<\/a> or a strong brand identity overnight. Those are built through consistency over many years.\u201d<\/p>\n Llusia-Lindh, who\u2019s preparing to open a first flagship shop in London this autumn, adds that there\u2019s more \u201cscrutiny on profits\u201d on the part of investors and an understanding that luxury is a long-term game. This means that fashion entrepreneurs shouldn\u2019t give up on financial partnerships but do need to look beyond private equity to family offices or boutique firms that specialise in luxury. David Wertheimer, son of Chanel co-owner G\u00e9rard Wertheimer, is one of them. He set up 1686 Partners in Luxembourg to back fashion and lifestyle brands that prioritise slow production and high-end quality, such as artisanal eyewear label Ahlem and high-end running label Satisfy.<\/p>\n