What’s next for the luxury repair movement – Sourcing Journal
The circular economy is under pressure.
An early mover in the luxury repair space, The Restory faces an uncertain future as demands for profitability increase. The circular fashion startup’s founding team has resigned and liquidation is a possibility, said David Perez, co-founder of The Cobblers, which took a 50 percent stake in The Restory in 2022. Services are currently suspended.
“The decision has not been made yet. liquidation [of The Restory] is one of the options,” Perez told WWD. The Cobblers, which offers online repair and aftercare services, is in ongoing discussions with potential investors who could decide the fate of The Restory.
In a joint statement published on LinkedIn on February 24, co-founders Vanessa Jacobs, Thaís Cipolletta Ferreira Alves and Emily Rea said they had resigned from the company. “We are incredibly proud to be pioneering the aftercare space with our team and we truly believe this is just the beginning for the aftercare industry,” they wrote, citing a “heartbreaking” decision.
Perez said several factors led to the problems at The Restory, including unit economics and “tensions with a group of investors.”
“[The Cobblers] has a very unique setup; We are a marketplace in the US, we have 300 artisans in the US. This is how we managed to scale the business and achieve the quality and volume. [The Restory] wasn’t that organized and they struggled to break even and grow,” he said. The company recently raised $8 million.
The Restory aimed to be a “foundation-matching app” for repairs and aftercare services, according to Jacobs, former chief executive officer of The Restory, who previously spoke to WWD. Using its proprietary tech stack, The Restory routed production and damage data to the right specialist and into a bespoke quote for the client, with repairs ranging from as little as one hour to six weeks for bespoke services. To date, the company has raised more than $4.5 million, and its offerings have attracted a number of fashion partnerships, including with Farfetch and Manolo Blahnik.
However, fashion buy-in does not automatically mean a stable business.
“In the summer we got a call from Vanessa [Jacobs]. She got in touch in July last year and told us the business was in a dire situation,” Perez said. “She had only a few days until the closure of operations and was already in contact with the bankruptcy proceedings. She offered us a look at the company and [asked] if we wanted to step in and get the company out of this situation.”
Jacobs and Rhea of The Restory declined to comment on this story.
On LinkedIn, Jacobs said she was “informed” that The Restory employees would be fired effective immediately and that a “proposed” liquidator had been named.
Built on relationships
One of the few companies to offer luxury repairs to a variety of Londoners, The Restory had built a notable list of brand partners including Farfetch, Browns, Selfridges, Harvey Nichols and Manolo Blahnik. Farfetch declined to comment on this story.
“We recommend The Restory, among others, but we will not do so while their services are suspended,” said Jodie Blake, Manolo Blahnik’s director of marketing and communications, in an email. Manolo still recommends other repair services in New York City and London.
At Selfridges, the repair services have been a hit, said Lucy Willis, who is in charge of communications.
In 2021, the retailer facilitated more than 28,000 repairs for customers. “One of these services, Sneakers ER, has been so successful in London that we have opened Trafford in Manchester and will open a concession in Birmingham as well. We have worked with Timpson’s in Selfridges London for over 20 years on shoe and watch repairs and a Barbour Re-Wax service allows customers to have their Barbour jackets re-waxed, repaired or altered,” said Willis.
Selfridges Repair Concierge is available in its London store and virtually where its team of experts aim to provide a one stop shop for all repair needs (be it shoes, accessories, eyewear or tech).
Repairs have also found their way onto the runways.
Last September Patrick McDowell worked with The Restory to restore 25 pairs of shoes for McDowell’s ‘Marie Antoinette Goes to Liverpool’ runway show for London Fashion Week. Although the partnership did not repeat itself, McDowell had nothing but praise for The Restory in an email to WWD, even using the service personally.
“They have a team of amazing craftsmen who really know their craft and work in a way that respects the value of the product they work on,” he wrote. “What they offer is a real game changer. It is repair and restoration of a very high standard and really allows you to keep your luxury items for life.”
Circular fashion is chasing profitability
The Restoration is not alone in its struggle. Much like technology and media, circular economy darlings in fashion have seen layoffs and operational weaknesses in a for-profit investor landscape.
Rent the Runway laid off 24 percent of its workforce in September to curb inflation and curb consumer spending to improve efficiency. In February, The RealReal laid off 7 percent of its workforce (or about 230 employees) and closed a handful of convenience stores and flagship stores. A month earlier, the company announced John Koryl as its new chief executive officer to help the company streamline. Earlier this week, Poshmark laid off 2 percent (or about 16 of its 800 employees). eBay also said it plans to cut 500 jobs, or about 4 percent of its workforce, according to a recently filed SEC filing.
Fundraising for some sustainability-focused companies could also become more difficult. Last year, next-generation materials received “limited” funding — $523 million down from 2021’s $980 million — according to a recent report from the nonprofit Material Innovation Institute.
Speaking more broadly on the investment landscape, Perez said, “Our confidence is very high. Over time we have had a very good grip on restoration in the US. We proved it. We know how to achieve profitability.” With the $8 million capital injection last year, The Cobblers hopes to bring jewelry and watch repair to the market as it is both business-to-business and direct-to -Consumer business expands, although “priorities may change,” Perez said.
Both The Restory and The Cobblers maintain impressive followings on social media, but The Cobblers’ Yelp reviews are around two stars for 270 reviews, similar to other circular businesses including The RealReal, ThredUp, and Poshmark.
Today, the repair landscape includes companies like London-based Sojo and New York-based Alternew, as well as proprietary options like Net-a-porter’s “The Seam.”
Nancy Rhodes, the founder of competitor Alternew, interfered in the development of The Restory. “I love Restory – both as an entrepreneur in the industry and as a customer. The biggest draw for me has always been this voyeuristic approach of observing the care, repair and reinterpretation of products and bringing them back to life through their content.”
Rhodes, which offers on-demand repairs and modifications through her shop, said she plans to be a bit cautious about raising funds.
“We carefully engage with the clients and business owners who are at the forefront of our mission, ensuring potential VC growth expectations do not exceed the needs of our key stakeholders; those who use our platforms to build their small businesses and those who use them to find a way to reconnect with their wardrobe,” said Rhodes.
Rhodes wants to start with a small group of friends and family before moving towards larger seed capital and possibly venture capital by July or August. Reflecting on how The Restory’s story is affecting the ambitions of competitors, Rhodes said, “They aren’t the first unsuccessful venture in this space, and they won’t be the last.”
https://sourcingjournal.com/sustainability/sustainability-news/the-restory-founders-step-down-luxury-repair-liquidation-london-circular-421170/ What’s next for the luxury repair movement – Sourcing Journal