In 2010 Natalie Massenet sold NET-A-PORTER in a deal valued at £350m to Swiss luxury brands group Richemont. But her start-up story started 11 years earlier. In 1999 Natalie was shopping onlineto buy a pair of Chloé designer jeans she had seen in a fashion magazine. She couldn’t find anywhere that stocked them.
She remembers her confusion: “I blindly assumed [the retailer] existed because of how brilliantly companies like Amazon were revolutionising service.” But she was wrong: there was no way to buy the designer label’s products online and get them delivered; you had to set foot in a shop. And that’s when it hit her: ”I thought, for a luxury brand, what better way to give the best service to clients than actually linking the browsing of a fashion magazine to the ability to shop at the click of a mouse and delivering to their door. That was the eureka moment.”
Natalie’s idea was simple: merge the magazine and the shop to enable women to purchase luxury goods and designer products online with ease, and – crucially – deliver them quickly and reliably. NET-A-PORTER was born.
Getting the funding
Natalie began work on her site the same year, and used her existing contacts in the fashion world, including designer Anya Hindmarch and Jimmy Choo founder Tamara Mellon as a starting point. An initial backing of £830,000 came from friends, family and angel investor Carmen Busquets. Carmen was early to recognise the digital opportunity for luxury goods and, in 1998, began building a private portfolio of online companies. ”I was very lucky that I had amazing people around me from the very first day, who were able to advise me, and to contribute towards the business. It started really from a desire that it should exist.”
Fundraising in the middle of the bursting dotcom bubble was not easy. Add to this the spectacular crash of fashion retailer boo.com in May 2000 – they had burnt through over £125m of venture capital from luxury goods manufacturers (including one of the largest luxury brands LVMH) – and you would have said Natalie was, at best, foolhardy to start her online business at this time. “They had an idea and a business plan,” recalls Carmen Busquets in an interview with the The Sunday Telegraph. “I invested £250,000 and afterwards I invested another £250,000. I knew the project would take at least £12m to £16m but I kept reinvesting because I really believed.” In a separate interview with the Financial Mail, she recalls reading Natalie’s business plan for NET-A-PORTER in the Caribbean on Christmas day in 1999. “Natalie was having a hard time. I phoned her up and said: ‘Don’t worry. I’ll put the rest in. I am willing to go all the way.’ I knew people would buy from a picture. Now nobody can tell me that online doesn’t work.”
Although Natalie was successful in getting her initial backers on board, in an interview she remembers many people being unimpressed with her idea. “There were a lot of unimaginative private-equity people who said that women would never shop online. I think about those people a lot. I’m sure their wives are having
NET-A-PORTER bags delivered to their homes every day.”
But her idea was to prove harder to put into practice than expected: historically, luxury goods websites have been very slow to populate the internet. In 2004 Gucci’s then director of e-commerce said: “[Gucci is] still unsure whether Ready to Wear will be available as an e-commerce offering. But
we live and learn and will test it eventually.” Back in 2000, when the majority of online customers surfed using slow dial-up connections, the number of luxury companies willing to take the digital plunge was even fewer. So it was a brave decision for a journalist with no entrepreneurial background to attempt to launch a website selling luxury clothing – especially as nobody was even sure whether the target demographic were internet users.
The designers get on board
Natalie’s fashion contacts were helpful in establishing the initial list of designers that were to be available on the site – Anya Hindmarch and Tamara Mellon were again among the first to agree to be involved.
However it was backer Carmen who was to be one of the biggest helps in getting initial suppliers on board. Carmen ran a boutique in Caracas called Cabus. Part of what made Cabus special was the way Carmen would attend the catwalk shows in Europe, take photographs of the fashions and send
the images to her best clients, who could then pre-order items through her shop. It also meant that when Carmen personally vouched for NET-A-PORTER’s creditworthiness to designers with whom she had long-standing relationships, they listened and agreed to be involved.
But it would take years to convince other designers that this could work. Natalie was very emotional when they finally managed to sign some big names, telling Business Week: ”One season we met with Marc Jacobs, Michael Kors and Chloé, and they all said yes. I remember bursting into tears when the team from Marc Jacobs said they’d sell through us,” Natalie says. Marc Jacobs went live on the site in 2002.
Even in the face of the sceptics, Natalie knew she had enough support from colleagues and designers to proceed. She chose the name, NET-A-PORTER – a pun on prêt-à-porter, the French for ‘ready to wear’. After flicking through a fashion dictionary for inspiration, she initially wanted to call it ‘what’s new pussycat?’ but was dissuaded by friends who said it might attract the wrong sort of traffic.
Work began on the development of the site, eventually going live on 10 June 2000 – six months after Natalie had originally planned. During this time, she worked on getting her proposition as sleek and perfect as possible: her clientele would expect the best, so the site needed to perform.
However, the launch was not as smooth as Natalie would have liked. “We had all this inventory just hanging there in our studio, becoming less and less valuable. We’d been sitting there compiling a list of what still needed to be done, and this poor IT guy who had been working without sleep for a month just put the website live without talking to us and went to bed,” she remembers.
The business was based in a small artist’s studio in Chelsea, London, with three members of staff. The rooms were stacked with stock and black packaging boxes, they had the capacity to deliver 1,000 orders a year.
But any preliminary teething problems soon dissipated. Initial publicity for the site came through Natalie’s contacts and through her investors’ networks, which created some strategic PR in the retail, business and fashion press including American Vogue who declared the website the ”chicest new
boutique in the world”. They had reached their audience, and the first few sales came in. “What was exciting was when an order came in and nobody around the room could say, ‘Oh yeah, that’s my aunt. It was, like, ‘Oh my God, it’s someone we don’t know.’”This exclusive extract is taken from the the ‘NET-A-PORTER’ chapter, in How They Started Digital: How 25 Good Ideas Became Spectacular Digital Businesses, published by Crimson Publishing. To read the full chapter and find out more about Natalie Massenet’s start-up story, as well as the inspirational inside stories of 24 other top digital businesses (including Groupon, Etsy, Match.com, ASOS, TripAdvisor and Wonga), pick up your copy of How They Started Digital, available on Amazon now.