The Start-Ups Defying The Luxury E-Commerce Slump

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Cult Mia — a platform that launched in 2019 selling an assortment of hyper-feminine garments from independent designers — had so much investor interest, it ended up raising a $3.5 million seed round in November, nearly doubling its initial financing target of $1.8 million.

The reason investors — including Morgan Stanley — found the company an appealing prospect is because of its financials. In 2023, Cult Mia generated 70 percent gross margins and doubled its sales; it anticipates it will do the same this year.

While the sector's biggest names teeter on the edge, an entire cohort of smaller luxury marketplaces — including Cult Mia, Wolf ⁘ Badger, Garmentory and Verishop — have found success with a different approach. Instead of competing for high-income consumers with a product assortment full of blockbuster brand names, they're appealing to aspirational shoppers with exclusive selections of $200-600 items from emerging brands. These platforms have grown profitably by refusing to own any inventory, selling marketing services to their brands and boutique partners and keeping a lid on discounting.

"I don't think scale and differentiation are mutually exclusive. You can't be something for everyone," Lepor said. "Customers like to feel like they're curating their own lifestyles. There's quite a wide audience for something like that."

Cult Mia, Wolf ⁘ Badger and Garmentory all run on a model where brands are responsible for packing and shipping their own orders and the platform takes a cut of each sale.