Jimmy Choo co-founder is reimagining the shoe industry with her namesake Tamara Mellon line
Working by himself in his shop, Choo's high-quality handmade women's shoes caught the attention of Princess Diana, and his notoriety grew. Sensing that Choo could produce more shoes faster by contracting with Italian factories, Mellon suggested a partnership, and the young Choo agreed.
Before long the fashion footwear was being referenced on hit shows like Sex and the City and the Sopranos and paraded up and down the red carpet. In 2014 Jimmy Choo became the first luxury shoe company to go public, and three years later Michael Kors bought the luxury shoe company for $1.2 billion.
Now Mellon is ahead of the curve once again, breaking all the rules of luxury fashion by abandoning seasonal collections and reimagining the shoe industry as an online, direct-to-consumer retailer that produces styles continuously — her namesake Tamara Mellon line features four to six new seasonless styles every month — rather than abiding by the traditional fashion calendar.
Tamara Mellon says her new business model gives her an edge over her competitors. "The quality is incredible, but I don't mark my shoes up six times anymore, because I don't have to have wholesale margin in there. So my shoes are 50 percent less than what I used to charge."
"The next generation of brands is going to be digitally born. Everyone is shopping online, and so the business model is very different," she said. "Even though the fashion industry is a creative industry, we were really behind with technology."
"The next generation of brands is going to be digitally born. Everyone is shopping online, and so the business model is very different."
-Tamara Mellon, founder of luxury footwear label Tamara Mellon
She said that at Jimmy Choo "we used to design four collections a year. Giant collections. Go and see buyers, have the buyers come in, and then we'd also try and deliver collections in the wrong season. We'd try and sell spring/summer in January and February and winter in July and August." But today, she says, things are different. "[Customers] want to buy something today and ... wear it tomorrow."
So Mellon and her staff — which consists of 24 women and one man — continuously create new designs. "We can sketch something and have it on our website in three months," she said, adding that she has produced 125 designs since the company launched. She now measures what consumers want by featuring samples on social media, such as Instagram. Production depends on the feedback Mellon receives from consumers. If consumers respond favorably and they receive requests for orders, they produce it. With social media, she said, "the feedback loop with the customer now is much shorter, so we can move much faster."
She recalls the sample she made of an electric-blue nappa boot. "That's a wild color, right. So you're not really sure who will be buying it. So I took a picture of it and put it on Instagram and we said, 'Who likes it?" We had 500 requests, so I put it in production."
Mellon says her new business model also gives her an edge over her competitors. "I still work with the Italian factories, so I still pay the same price as all my competitors. The quality is incredible, but I don't mark my shoes up six times anymore, because I don't have to have wholesale margin in there. So my shoes are 50 percent less than what I used to charge."
Although Tamara Mellon is now attracting the attention of celebs, including Meghan Markle — at a garden party in honor of Prince Charles' 70th birthday at Buckingham Palace, Meghan Markle wore the Tamara Mellon Siren pump — the British designer was not without her struggles. In 2013 Mellon launched her new, Los Angeles-based line, which sold through high-end retailers like Neiman Marcus. But just two years later she filed for bankruptcy.
In 2016 she relaunched her brand as a direct-to-consumer shoe business and gained the attention of venture capitalists. In June she raised another $24 million to expand in a Series B round led by New Enterprise Associates and Quadrille Capital, bringing her total funding to $37 million.
Mellon told CNBC that the first version of the Tamara Mellon brand was a "learning experience."
"There's always reinvention," she said. "I've reinvented myself from Jimmy Choo now to Tamara Mellon, which is a completely different business model."
Although she claims that more than 80 percent of Tamara Mellon's traffic is mobile driven, the company is now planning to open its first brick-and-mortar store this fall, in Palisades Village, Los Angeles.