Mansur Gavriel Case Study: 2012–2019

  • The only way the brand could raise outside capital was to cede decision-making authority, because every investor who performed diligence either saw a mess lurking just below the surface or didn’t trust the founders to work within the corporate finance framework.
  • The two creative-minded co-founders wanted to sell out. PE targets a return of 2.5x within 5–7 years, and the founders wanted to hand over control to someone who could deliver that return on their remaining equity so they could retire and ball out (or move on to the next thing).

How We Got Here

The Mansur Gavriel brand was developed by two creatives with broad experience — Rachel Mansur and Floriana Gavriel — who joined forces under a united aesthetic banner after a chance meeting at a concert. They worked for two years on developing the design and sourcing strategy for the brand’s launch, and went to market in 2012 with two styles: a drawstring bucket bag and a top handle tote bag (called the Bucket Bag and Tote Bag respectively, and still sold in many iterations today).

  • 2015: Women’s footwear collection launched
  • Fall 2017: Women’s Ready to Wear collection launched
  • May 2018: Men’s Ready to Wear collection launched

Merchandising Analysis

Assortment

You can learn a lot about the way a brand views its product assortment from the main navigation architecture on its website. Mansur Gavriel’s head categories are Bags, Shoes and Ready To Wear (clothing). The men’s collection is a sub-item beneath each of these head categories, usually listed all the way at the bottom. This tells me that Mansur Gavriel is still driving the majority of its business from bags and shoes, and that the men’s launch has failed to gain traction.

Pricing

Pricing literally determines your customer base: both who can afford what you’re selling (as in, who literally has enough disposable income to buy it), and who values your product in line with its price.

  • Handbags: $500–699 (59% of the full price assortment)
  • Footwear: $300–499 (77% of the full price assortment)
  • Women’s Ready to Wear: $700–999 (54% of the full price assortment)
  • The brand saw successful adoption of new handbag and shoe styles. Although sales did not approach the frenzy of the initial brand launch, they were still strong.
  • The brand did not consider if these product launches were driving new customer acquisition or cross-shopping from existing customers. Based on the brand’s marketing approach, 45–60% of annual sales were probably coming from returning customers.
  • The brand developed an anecdotal customer profile of a woman who typically purchased from luxury labels, but purchased Mansur Gavriel because it was a good value, and never qualified it with research, a customer survey, or customer interviews.
  • The brand launched RTW to appeal to their imaginary target customer, using the success of other launches as confirmation that the approach was the right one. They invested in an inventory position similar to a new shoe or bag launch.
  • On launch day…nothing happened. Most of the shoe and handbag customers couldn’t afford the RTW price point, or didn’t feel comfortable with it.

Competition

Consumers today are more well-informed than ever. A brand’s product and pricing strategy is splashed across the internet for all to see. When a successful product niche is identified, competitors will try to hone in from above and from below.

  1. Status Micro Bags: Looking at the $500–699 price offering across several multi-brand sites, I saw many European heritage luxury brands creeping down into this price point with small leather goods disguised as bags. These include wristlets and wallets attached to shoulder straps. The Mansur Gavriel customer who purchased a bucket bag because she absolutely could not afford a bag from Gucci, Valentino, etc. is now being served here.
  2. Lower Priced Competitors: There aren’t a ton of brands competing with Mansur Gavriel directly in the $500–699 price point, but many have recently emerged just below in the $300–499 range. These brands include Danse Lente and Staud, who have emerged as the “It Bag” brands of the Instagram-first era. The Mansur Gavriel customer who saw that brand as an aspirational purchase may be served here with something she finds more affordable.
  3. Macro Trends: the US handbag market has been in decline for the past two years, making it harder for brands to maintain or grow sales. There are fewer overarching mega trends; “it” styles emerge amongst smaller pockets of consumers and have less staying power.

Path Forward

Mansur Gavriel’s merchandising strategies and struggles illustrate why it is so difficult for fashion brands to have staying power without a strong brand identity and mature direct to consumer business. White space in the fashion market is quickly crowded as soon as it is identified, and trends don’t drive the same sustained growth they once did.

Evolving From “My Vision” To “My Customer”

The “hot item problem” tricks founder-creatives into thinking that customers are buying into their vision when, in fact, their vision happened to align with the zeitgeist at just the right time. The result in a direct business is a customer file full of people that the founder-creative thinks they understand, when in reality, past success doesn’t guarantee future performance.

  • Has the rolling 12 month average of active customers been going up or down over the past 3–4 years? How are the segments above are contributing to the trend?
  • What products have been driving first time customer purchases over the past 1–3 years?
  • How diverse is the product set driving acquisition? The top 5 products each year are driving what % of customer acquisition each year?
  • What are the high, medium and low price bands within the customer file? How many customers primarily shop within each price band? Do they cross shop?
  • To what extent are customers shopping across product categories, and to what extent is that cross-shopping bounded by price?

Evolving From Visual Identity to Brand Platform

When fashion was a wholesale-driven business, developing a strong visual identity for a brand was sufficient. Wholesale partners and press controlled the narrative.

  • Who is the target customer?
  • What does she value?
  • How does our product offering serve our customer, align with her values and make her feel good?
  • Why can we do this better than anyone else?

Postscript

You may say that this process sounds pretty formulaic for a fashion brand, which is supposed to be all about creativity and “vision”. But creative outcomes are better with a framework or some set of constraints. I say this from experience, as someone who once worked as and completely identified as a creative. Creativity needs a framework to thrive, and all businesses need to consistently serve a customer to thrive.

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Alex Greifeld

Alex Greifeld

I used to design mom jeans (really). Now I help build bridges between quants and creatives and write about the future of retail.