Tuesday, 10 February 2009

Is online the way to succeed in 2009?

The BRC today reported that UK retail sales for January 2009 were up compared with January 2008 despite the economic crisis. While these figures were buoyed by food sales, with clothing and footwear in the poorer performing categories, online sales remained strong, up 19.2% from last year.

Fashionista suggests that online should be the focus of attention for fashion retailers this year.

While it is possible to build online business quickly with low barriers to entry, the story of Holly Tucker, founder of notonthehighstreet.com, as reported in the Times at the weekend, shows that sometimes the success can come too quickly.

Holly explains that despite large sales in the first year, the business nearly ran out of money after leaving it too late to get further investment: "The enormity of what we were doing led us to not keep our eye on the bottom line". Fortunately for Holly, she managed to raise further investment from selling a minority stake to a private-equity firm and subsequently from a deal with a venture capitalist, while retaining (along with her partner Sophie Cornish) a majority stake in the business.

As the landlords struggle to fill the high street, Fashionista expects more and more businesses to launch online. While the set up costs are relatively low, if the business takes off, make sure you leave enough time to secure the right sort of investor.