I remember quite vividly surfing Bag, Borrow or Steal during my first year of full-time work. The site had just launched, and despite its unfortunate design, I found it to be quite cheeky–and in many ways, appealing. And although I never could bring myself to take the plunge, I knew plenty of women who “borrowed” one of the company’s bags for weeks at a time, whether it was for job interviews or big meetings.
So I was pretty shocked when Bag, Borrow or Steal decided to change its name to Avelle in 2008, shortly after its prominent mention in the first Sex and the City movie. Sure, BBS isn’t the the most glamorous moniker, but it was catchy, and people knew what it meant.
Since then, Avelle kind of fell off the map. Well, at least that’s what it felt like.
But it seems my instincts may have been incorrect. Recently, I chatted with Avelle CEO Michael J. Smith, who attempted to set me straight on what the brand’s been up to. While I still don’t fully agree with the name change, Smith, previously president of Nordstrom.com, made a compelling argument in its favor. Here’s my Q&A with the exec:
Fashionista: So, let’s get it out of the way. What’s up with the name change? And why do it right after you just got a ton of press from Sex and the City?
Avelle CEO Michael J. Smith: Well, we actually decided to change the name a year before Sex and the City. They wanted to stick with Bag, Borrow or Steal, which we understood. The reason we changed the name? We were expanding beyond handbags, into home, accessories, luggage, all kind of product. It was a mouthful for people–they were continually getting it wrong. We just felt that Avelle was more consistent with a high-end luxury brand. And it’s gone about as well as a name change can go.
Can you give me a snapshot of how the company is doing financially? Just within the past week, we added hundreds of new products to the site. Anything else out there pales in comparison, short of full-on department stores. And were adding new members everyday, with thousands of members using the site daily.
Are you profitable? We’re cash flow positive, but we’re building up inventory, so a lot of that money goes back into the business. We’ve been tracking EBITA positive [a fancy way of saying earnings before the deduction of interest, tax and amortization expenses] for quite some time.
So, the company’s doing well. That means that you’re planning on selling it to a bigger company or taking it public. Any idea which?
It’s definitely one of the two. We raised quite a bit of money ($15 million in 2007 alone) and investors expect something in return. But the current focus is still growing the company. Before we decide on our exit, it’s best to focus on the business first. We get call all the time with people interested in buying. We just don’t spend that much time on that. We have really supportive, great investors that really understand the space. And we have investors from all over the world.
Do you plan on taking the service international, then? We’re not a huge company. The business is pretty complicated once you get out of your home country. Netflix, Nordstrom are just tackling that now. We’re not at that level yet.
What’s next for Avelle? Will you take on Rent the Runway and start renting clothing? You know, when we survey customers, clothing is on the list of items they’d like to see on Avelle, but it’s nowhere near number one. And it’s not on one of our top five things to do next. The average life of clothing is not as long–the apparel cleaning and repair service requires a completely different set of skills.