London-based luxury marketplace and personalised shopping platform Threads Styling has been acquired by Dubai-based luxury retail and distribution giant Chalhoub Group for an undisclosed sum, the company said Tuesday.
Initially founded in 2010 as a personal shopping service, Threads Styling has built a global luxury retail business through its chat-based commerce service connecting high-net-worth consumers with a network of in-house and external personal shoppers, currently over 200 strong.
Its trendy product curation, enviable brand partnerships and social media savvy have helped it secure the loyalty of high-spending Gen-Z and Millennial consumers. In March this year, it closed a $12 million funding round as it expanded into live shopping events and more traditional e-commerce services.
Threads Styling generated sales of nearly £43.4 million (about $46 million) in 2020, up 41 percent on the year prior, according to filings with UK Companies House. The company has continued to grow since then, it said.
The acquisition by Chalhoub will help Threads Styling deepen and expand its presence in the Middle East, already a key market for the company, thanks to Chalhoub’s operational muscle and infrastructure in the region, allowing it to access local inventory. Following the acquisition, Threads Styling’s founder and chief executive Sophie Hill will retain her shares in the company and remain its leader.
Meanwhile, Chalhoub Group stands to benefit from Threads Styling’s digital capabilities for consumer engagement and global reach. “We saw so much potential in the way that Threads approaches digital commerce and a new way of inspiring and communicating with our core luxury consumer,” said Sharmila Murat, chief investment officer at Chalhoub Group. “We really feel that it is a business that can scale through experience and personalised service with the supportive technology, both in our region and globally.”
The acquisition is also an opportunity for Chalhoub Group to set itself apart from regional competitors like Al Tayer, another major luxury distributor in the Middle East with a strong e-commerce presence in its online retailer Ounass. Chalhoub has been an active brand incubator in recent years, investing in home-grown beauty brands in the region and emerging Saudi designers.
The group was also drawn to Threads Styling’s track record of expanding into new product categories like watches and fine jewellery, an area it is actively looking to grow in.
With this latest investment, the plan is for Threads Styling to deepen its ties to VIP clients and grow the reach of its platform, said Murat. “There’s probably going to be a tiered approach to different types of clients … [bringing in] a wider base of consumers,” she said, “without moving fully away from its core consumer: that high-spending, younger luxury consumer.”
These ambitions are set against the backdrop of an increasingly competitive luxury e-commerce market, with many players yet to prove they can find ways to grow profitably.
Threads Styling is still a relatively small player and yet to reach profitability itself, but it now has the backing of a major retail power and a differentiated business model focused on social commerce. Combining that with a zero-inventory marketplace model will smooth its path to growth, Hill said.
“We believe it’s about offering the customer as many … luxury customer experiences as possible,” said Hill, be that through a chat service, personal shopping, in-person events or its e-commerce platform. “That’s how we see our business model going forward.”
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