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Published 29 January 2013 12:36, Updated 31 January 2013 00:07
Jane Lu says her Show Pony online fashio outlet no longer needs its retail shopfront in Sydney Photo: Michele Mossop
It’s only been eight months since 26-year-old fashion entrepreneur Jane Lu moved her online clothing business out of her parents’ Sydney garage. But despite starting a little more than two years ago, her website, Show Pony, is turning over as much as $300,000 a month and she says it no longer needs a bricks-and-mortar retail outlet.
Lu, a former business analyst at Ernst & Young, used nothing more than her credit card for the funds she needed. Most of her company’s popularity has come from clever Facebook campaigns and digital advertising.
Lu has a shopfront at Westfield in the Sydney CBD, which she has held since August on a flexible lease but plans to close it. “When we stop paying rent, if we put that into digital advertising the effect is much better.”
She is planning to set up a base in China and has her sights set on the US market.
“I don’t have a passion for fashion at all,” Lu says. “But I thought at the time: ‘I have already met the right people and have a good idea’.”
Fashion retailers had mixed results over Christmas, with Noni B reporting a large slump in profits while Specialty Fashion Group says it expects half-year profit to rise threefold on the same time last year. Analysts are not expecting glowing results from Myer and David Jones when they report their half-year results in the coming weeks.
Against this backdrop, online fashion retailer The Iconic has secured $50 million in overseas investment since September, although reports say the business may not yet be cash-flow positive. And fashion website group brandsExclusive has recorded revenue growth of 1300 per cent for the past three years.
Business people such as Lu are shining examples of how online retailers are disrupting their traditional counterparts by setting up large-volume businesses with relatively low overheads.
Lu puts her success largely down to Show Pony’s 124,000 Facebook fans. A modelling competition in early 2011, where people competed to model for the fledgling site, lifted Show Pony’s fans from 3000 to 20,000, and other campaigns have followed.
Lu bought out her business partner who was averse to borrowing, then maxed out her credit card and invested in online advertising.
She moved out of her parents’ garage in inner-west Balmain in May last year. She now rents a 140-square-metre space at Wynyard in the CBD and employs six staff. In November, she had 200,000 visitors to her website, 3200 orders and $300,000 in revenue.
That could put Lu on track for BRW’s 2013 Fast Starters list, which is currently taking nominations.
She says only 20 per cent of the stock in her website are “fashion-forward” items that set new trends. The remaining 80 per cent is basic bread-and-butter clothing.
“Because I don’t have a fashion background, I’m buying things I think will sell,” Lu says. “We have 20 per cent fashion-forward, which is ahead of fashion so you look cool and when the trends hit we’re there and we’ve got it. Customers see you are spotting the trends early, so they trust your opinion and it brings people to your website. So we advertise with the cool stuff but people mostly buy the basic stuff.”