Calvin Klein owner PVH to acquire lingerie startup True & Co.
PVH Corp., owner of brands Calvin Klein, Tommy Hilfiger and Van Heusen, among others, on Thursday said it has entered into an agreement to acquire e-commerce bra retailer True & Co. Terms of the transaction were not disclosed, according to a press release.
True&Co, founded in 2012 by Michelle Lam, is based in San Francisco and has design teams working in New York; its disruption of the lingerie space is based on data analytics using an online “Fit Quiz” that helps customers find a bra that fits well.
The company had attracted $13 million in investments from Crosslink Capital, Cowboy Ventures, First Round, SoftBank, SoftTech VC and the VTF, among others, and sources told TechCrunch that the deal will get them their money back and no more. Like many pure-play e-commerce startups, True & Co attracted attention from shoppers and investors, but that didn’t necessarily translate to profits.
Fit has become the focus of much of the disruption by e-commerce startups in lingerie retail. While True & Co. developed a quiz that yielded enough information to advise women on the ideal items for them, rival startup Thirdlove uses patented mobile, image-based sizing technology (a sort of specialized selfie) for that task. The reach and resources of ownership through a giant like PVH could make all the difference for such a disrupter, which has innovation, but not necessarily scale, on its side.
“In PVH, we have a strategic partner who can help us bring this change to as many customers as possible,” Lam said in a statement. “We look forward to joining PVH’s portfolio of brands and to help drive growth initiatives for PVH’s other brands.”
It’s not clear whether these startups are reaching profitability, but they do seem to be giving stalwart Victoria’s Secret a run for its money. In the most recent quarter, same-store sales tumbled 20% at the lingerie leader, where the long-lived push-up bra trend that it led appears to be on the outs. The faltering performance amid the disruption has led analysts to take a dim view of Victoria’s Secret owner L Brands.
“In our view, even L Brands’ significantly reduced guidance isn’t fully de-risked as it relies on mall traffic improving (which has been persistently negative, but could improve if February trends are simply due to tax shifts), but also that second half will reaccelerate to positive low-single-digit same-store sales (partly due to swim/apparel headwinds abating), which we think is a stretch until we see better consumer buy-in from new innovation,” UBS said in a February note.
While True & Co. didn’t necessarily turn a profit, its tech approach could be useful to PVH for its brands’ lingerie sales and for other apparel like athleisure where fit is a major consideration. The tie-up “illustrates our commitment to driving innovation across our business and demonstrates our commitment to making strategic investments in our digital platforms to support our long-term growth initiatives,” PVH Corp. CEO Emanuel Chirico said in a statement. “We believe that we can leverage the analytics tools of this data-driven company, while leveraging PVH’s intimates category expertise, including global brand management, product know-how and supply chain.”
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