Fab.com Acquires FashionStake

Last Friday, the popular fashion daily deal site, Fab.com acquired FashionStake, a two-year old retail start-up sponsored by Battery Ventures. The price of the acquisition has not been disclosed. Harvard Business School graduates Vivian Weng and Daniel Gulati, FashionStake’s founders, will spearhead Fab.com’s expansion. The team from FashionStake will not be a part of the transition. The FashionStake site will cease operations after the acquisition, Weng announced.

Launched in September 2010, FashionStake invited consumers to support emerging designers by purchasing “stakes” in not-yet-produced fashion collections in exchange for deep discounts and other customer privileges when the collections were manufactured.

Weng and Gulati responded to customers requests to pre-order items at a discount and quickly adapted the site to fit that business model. FashionStake was able to continue offering items at a discount because they could use pre-order numbers to evaluate demand prior to production.

Quick to respond to the feedback from their loyal customers, FashionStake overhauled its modality once again. After the third iteration, FashionStake functioned as a traditional online boutique, focusing on customer engagement, independent designs and deep-discounts. Shoppers were delighted. They could find accessories and elegant apparel from designers they could never hope to discover at their local shopping mall.

Fab.com CEO Jason Goldberg, stated he has no plans to include any portion of FashionStake’s retail model. Goldberg says he was primarily attracted to the relationships Weng and Gulati had cultivated with the more than 400 independent designers featured on FashionStake. Several of these emerging designer will soon receive exposure to Fab.com’s millions of customers.

Fab.com proudly claims 1.65 million members to date. The startup obtained 350,000 members in just the last 30 days. When questioned about the lessons learned in her first start up experience, Weng articulated FashionStake’s need to “test first, invest later.” “You need to feel there’s some sort of traction or resonance with a customer before building out [a product or feature],” Weng said. “The last two years we have tried to learn and adjust as quickly as we could, and that’s something we’ve been very proud of.”

Weng commented she was looking forward to moving from infrastructure development toward business development. “To be able to come in and have a greater customer service team, great logistics and a solid warehousing process is really attractive to [myself and Gulati],” she said. “Now we’ll be thinking more about the core elements of the business, how to message our views and our products to the customer.”

Source: Mashable