Pre-IPO Insider: A Unique Platform Revolutionizing The Fashion Market

This is BIG… For the first time since 1933, the SEC is now allowing regular people like you and me to invest in brand-new explosive-growth companies BEFORE THEY GO PUBLIC. Imagine getting in on the next Facebook for 33 cents a share or the next Apple at 78 cents. In StreetAuthority’s Pre-IPO Millionaire, I vet six to eight deals like this one, and offer my exclusive in-depth analysis of a single opportunity that I believe could return 1,000% or more. Click here for more information. — Joseph Hogue, CFA

For that half of the population who maybe didn’t already realize this, let it be known that women’s fashion is not inexpensive. Luxury fashion prices have shot up 60% over the last decade, nearly twice the rate of overall consumer inflation. A single dress can cost several thousand dollars.

To make matters worse, the rise of social media has shortened the season for luxury fashion. Whereas many designers used to produce a spring and fall season, now many are launching four product lines a year to keep up with changing tastes.

#-ad_banner-#A 2015 survey of 1,500 women by Barnardo’s, a British charity, found that respondents considered an item ‘old’ after wearing it an average of just seven times. A third of the respondents considered a garment old after using it just three times.

That means designer fashion is out of reach for many women, who are unable to afford to update their wardrobe and keep up with the lifestyle they may desire.

One startup is disrupting the luxury market with a unique marketplace model. It’s found a way to offer luxury fashion at a fifth of the cost and at margins unheard of in retail apparel. It’s grown sales three-fold since 2014 and is looking for new investors to expand.

You can’t buy shares in the stock market. This is still a private company.

But you can get a piece of the action as a pre-IPO investor.

This Company Could Be Insanely Profitable
Couture Collective is a unique online marketplace model for the women’s luxury fashion market. Members can go online to fill out their virtual closet with designer dresses, paying just 20% of the retail price for the right to wear a garment up to five times over a six-month period.

Members can also rent an item for a single use, paying just 10% of the normal retail price. Garments are delivered on-demand with next-day service and are packaged in garment bags rather than the standard shipping boxes.

Every item is made available for a six-month season. If members decide they want to keep a garment permanently at the end of the season, they pay just 30% of the retail price. The limit on the number of times a garment is worn helps to keep its value, driving buyouts for like-new garments at the end of the season.

The U.S. market for women’s clothing tops $14 billion, with the luxury fashion niche estimated at $2.4 billion in annual sales. Online sales growth in the space is surging by 17% annually as consumers become aware of marketplace benefits to buying clothes online.

The marketplace business and the company’s unique model could lead it to some of the strongest margins in retail apparel.

Here is the revenue margin picture, according to management:

— Wholesale purchase costs averaging $1,600 per item, approximately 45% of normal retail garment   price.

— Four seasonal shares per item at $704 (20% of retail price) for share revenue of $2,816.

— Five one-night rentals per item at $352 (10% of retail price) for rental revenue of $1,760.

–End of season buyout per item at 30% of retail price for buyout revenue of $1,056.

That would mean a gross profit of approximately $4,032 per item and a gross margin of 72% for the business. By comparison, retailer Macy’s (NYSE: M) books a gross margin of just 39%, and even luxury brand Michael Kors (NYSE: KORS) books only a 59% gross margin.

As an online marketplace, the company likely will be able to run leaner than a traditional retailer, producing stronger profits on lower operating costs.

Couture Collective has grown sales three-fold to $233 million through 2016 from its start two years earlier. The average member in its New York City market spends $3,000 a year and the company has plans to expand into Dallas and Atlanta.

Couture Collective is raising funds for inventory building, marketing, and concierge services to help the company grow. The company is offering convertible debt with a 20% discount on the $4 million valuation and a $500 minimum investment open to all investors on the SeedInvest platform.

As with all investments, I encourage you to do your own due diligence. I haven’t yet done the detailed market and valuation analysis on Couture Collective that I present each month in Pre-IPO Millionaire, but the company has already proven demand and could achieve profitability soon, a rare achievement for a young startup. For more information, click here.