The Edit LDN deal highlights tough times for go-go retailer.
Both sneakers and resale marketplaces are hot areas of retail right now but that does not guarantee success even for a business that cover off both bases as shown by the recent difficulties of The Edit LDN that resulted in it recently selling a majority stake.
It was recently announced that Edit LDN, which specialises in reselling limited edition sneakers and luxury streetwear clothing, was being acquired by off-price fashion retailer BrandAlley. The move concludes a difficult period for The Edit LDN that was founded in 2020 and generated revenue of £5.8 million in 2022 but was recently hit with cash flow problems.
Moses Rashid, founder of The Edit LDN, says: “Although 2023 was another year of positive growth and revenue, it has been a difficult period with financial challenges being accelerated by external funding sources that we had on our creditor books.”
The most recent funding took place in January 2023 when the company raised £3.9 million but this has been insufficient for it to build-out its infrastructure in order to achieve its global ambitions that would see it increasingly compete against the likes of StockX and GOAT in the sneaker and collectible resale clothing markets.
“It was crucial to act fast and find a long-term partner who sees the potential to take The Edit LDN global and offer the operational infrastructure required for sustainable growth,” explains Rashid.
Although BrandAlley operates in a very different part of the retail market – with its focus on off-price fashion goods – the deal is regarded as an opportunity to plug The Edit LDN into the company’s logistics infrastructure and for BrandAlley to benefit from tapping into the resale platform’s younger customer base.
This group of followers is very much engaged with the social media output of The Edit LDN, which has proven particularly adept at promoting its proposition and its partnerships with high profile sports stars in both the UK and US.
Rob Feldmann, CEO of BrandAlley, says: “With our eight million-strong members-only database, our own dedicated in-house warehouse operations and customer service team, we are confident we can provide full operational support across our group of companies and drive profitable growth of The Edit LDN globally through Moses and his team.”
This acquisition follows the purchase by BrandAlley of a stake in luxury resale platform Sign of the Times. These are among a raft of deals that have taken place in the retail sector, and which have in many cases been prompted by a combination of the ongoing tough economic conditions and greater difficulty accessing funding at sustainable rates. Farfetch and Matchesfashion are among the other retailers that have experienced difficult conditions in recent months and been acquired.