On Friday morning, 15-year-old Los Angeles-based e-commerce company Revolve raised $212 million in a successful initial public offering on the New York Stock Exchange. Listed as RVLV, it sold 11.8 million shares at $18 a piece (the top of its target listing price range), and is now valued at $1.8 billion.
The digital-only retailer operates 22 in-house brands in addition to selling third-party labels on its namesake site Revolve.com, as well as Fwrd, which has a more high-end designer inventory, and the recently-launched Superdown, which targets Gen Z with price points in line with fast fashion. Revolve is best known for its aptitude at influencer marketing, in which it's been a pioneer: In addition to to working with a large network of influencers who regularly wear and post its product, Revolve takes many of them on extravagant #Revolvearoundtheworld trips that never fail to create buzz on social media, and hosts #Revolvefestival, an over-the-top weekend of activations during Coachella with infinite Instagrammable moments. This year, it also began partnering with influencers on launching their own brands, including Aimee Song and, most recently, Camila Coelho.
As evidenced by the company's financial details over the past couple of years, which were released in a filing ahead of Friday's IPO, the strategy has paid off. The company made $31 million in profits last year on $499 million in net sales. As other outlets have pointed out, the filing also mentioned the word "influencer" no less than 79 times.
"It definitely exceeded my expectations," Revolve Chief Brand Officer Raissa Gerona, who's spearheaded this side of the business, told me over the phone hours after stock began trading. "It's great to see that investors believe in the business and understand what we're doing, obviously that's the most important thing.
Along with co-CEOs Michael Mente and Mike Karanikolas and CFO Jesse Timmermans, Gerona has spent the last two weeks on the road (or, more accurately, on a private jet) meeting with potential investors and educating them on the ins and outs of influencer marketing, which many of them knew little to nothing about.
Read on to learn more about how that went and what's next for Revolve as a public company.
What have the last few weeks entailed for you and Revolve?
Pre-IPO, you go on the road to meet with a ton of investors; for us, it was a two-week process traveling to different cities. You're doing eight-to-10 meetings a day, talking about what the business is about. I was there to really represent the brand marketing part of the business and to explain to investors how we've really been able to connect with our customers through social media influencers, our experiential marketing, press, etc. [Investors] haven't really heard of this concept before.
How did investors tend to react to hearing about this strategy?
They had so many questions, just about the mechanics of it — and sometimes even, [they would ask] 'What's an influencer? What makes somebody an influencer?' For some, I had to start with the basics and laying the foundation of why we work with social media influencers and why social media is important. Sometimes I would laugh, but at the same time, they cover so many [types of] businesses and it continues to highlight how forward-thinking the strategy is.
Do you see this IPO as a legitimization of influencer marketing?
The fact that people even have to question the legitimacy of the strategy already sets them up to be a little bit behind. We've been working with influencers for 10 years; the vehicle now is Instagram, but before we had blogs, before that it was magazines. Working with influencers has been key to our business and using them and their power to influence people all over the world... we can see that because 45% of the people that follow us don't even live in the U.S. We've created this global fan base and it's been through influencer marketing. We've been ahead of the game which is great and we see so many other companies that are obviously doing it well, but there are a lot of other companies that I think have been slow to adopt to the new way of marketing to this consumer.
How about legitimizing the influencer as a career?
I think there's still that stigma around influencers that they just sit there and take photos. It's unfortunate because all of the girls we work with are such entrepreneurs themselves. They understand how to run a business; they understand obviously how to build a brand — better than most people. It's unfortunate that people have that perception of them but I think at Revolve that's always one of the things we valued about them is they do more than just take photos. They really help to authentically spread your brand message and they've been a huge part of that for us.
What does this mean for the future of Revolve?
We're going to do more of the same. We want to continue to provide our customer [with] the best products and the best service. I think, from a product standpoint, it's continuing to expand on our own brand: We own and operate 22 now, soon to be 23; we're launching with another influencer of ours [Camila Coelho]. Also on the brand marketing side, to make sure we feel active and continue to invest in events and influencers and the strategy that's worked for us the last 16 years.
Are you planning to focus more on in-house and less on third-party brands?
It's always going to be a mix of both. We definitely have a few things in the pipeline for our own brands but our buyers and merchandisers are constantly traveling around the globe to find the new and the best of third-party. I think that's always going to be a very important part of the business.
Will the trips and festival activations continue? Will they be even bigger?
I hope not! [Laughs] I'm kidding. [We plan on] reinvesting back to things we know work, even the "Revolve Around the World trips" — we've been doing them for six years and gone on 40-something trips. When you count it all up, it's exhausting. There's been a lot and we can continue to do more of this so we're excited to do just that. Continue to reinvest in things we know work and provide value to the company, and obviously now our shareholders.