Virtual fitting room solutions provider Fits.me has completed a first close of €4.2m [$5.34m] of a €7m ‘top-up’ investment from its new chief executive, James B. Gambrell, backed by its major investors. The management buy-in comprises new money and debt conversions and brings total investment in Fits.me to about €13m.
The MBI-round demonstrates the growing level of investor confidence in the virtual fitting room sector, with several other providers also raising new investment in the past three months. Gambrell said: “We’re at an exciting inflection point for the industry. Several start-ups have created working solutions and attracted brand-name, paying clients. But only a select few have been able to deliver the value that commands fee levels that justify the working capital and investment necessary to scale their business on a global scale. Those that can, including Fits.me, have successfully attracted new investment. Those that can’t may be unable to attract sufficient capital to grow and will start to vanish as they fail to secure further funding. We expect some consolidation in this highly fragmented sector, and we will seek to take advantage of that,” he said.
Gambrell, announced as chief executive in June, has a lengthy track record of joining innovative technology companies just as they go ‘post-Founder’, personally investing in them and scaling them into successful, international enterprises. Most recently, as CEO, he led the MBO of Atego (formerly known as Artisan Software Tools) and transformed it into the global leader in mission- and safety-critical systems engineering application development tools before selling it to leading PLM vendor PTC for $50m, delivering a 10x return to his early backers.
He continued: “The Fits.me team pioneered a new industry by identifying a huge problem impacting shoppers and retailers and created an innovative, viable set of solutions that have successfully delivered real value to paying clients and their shoppers. But this is just the beginning; the team is now focused on globally scaling our operations to ensure we can support a rapidly growing market and increased demands from our clients, while continuing to differentiate against a growing list of competitive solutions.
“However, we will not lose sight of what made Fits.me the leading virtual fitting room solutions provider in the first place: innovation and never compromising on client success delivered through shopper engagement. While retailers and brands have taken longer than originally anticipated to fully embrace virtual fitting room solutions, Fits.me’s work with early adopter brands such as Hugo Boss, Thomas Pink and QVC is now paying off as the larger market is waking up to shopper demands of ‘I want my Fits.me!’. Now, Fits.me is ready to move beyond size and fit to deliver on the future of fit, fashion and friends.
“In-store, shoppers use fitting rooms for purposes besides just fit: to try on different clothes to create a complete outfit, or to ask their friends if they like their look. There is almost too much choice online and many shoppers would like to see only a selection of clothes that are relevant to their fit and style preferences. There are quite a few things that we’re looking at next, to deliver on the promise of the complete fitting room. We’re aiming to deliver a portfolio of functionality that retailers will recognise as being of strategic importance to the way they interact with their customers, linking fit, fashion and friends – we plan to move beyond mere technology to deliver on shopper’s growing demand for an online experience which is better than they are used to in-store,” he explained.
Shopper personalisation and engagement are key to retailers’ efforts to secure consumer loyalty. Fits.me has a range of online fit solutions, each designed for different fashion retail segments, but all provide a vital source of personalisation and engagement for their client’s shoppers.
‘Fit’ remains the problem for retailers to address first, because consumers cite it as the biggest source of their frustration: a report commissioned by Fits.me in February 2014 found that 45% of all shoppers who regularly or always buy clothes online find “the inability to try on the garment to check the fit” the most disappointing aspect of shopping online, showing that the online fit problem is not only the biggest problem but also an enduring one.