OROTON GOES CLICKS AND BRICKS AS PROFITS SLIDE
Written on the 29 March 2017 by Mia Armitage
TWO former Aussie lawyers have turned their passion for fashion into a $15 million dollar international business six years after launching The Daily Edited via Instagram.
Alyce Tran and Tania Liu reportedly met working at a top law firm in Perth where they bonded over sartorial inspiration.
The pair became fashion industry tycoons this week when Oroton executives paid $4.5 million dollars in cash and shares for a 30 per cent stake in Tran and Liu's business, The Daily Edited.
TDE began as a style blog featuring daily outfits before Tran and Liu realised the business venture wasn't working and decided to narrow their focus to personalised quality leather goods.
Capitalising on the selfie era and its buzz theme of narcissism, TDE morphed into an online shop in 2014 selling limited edition customised monogrammed leather handbags, pouches, wallets, diaries and phone cases.
The range has since expanded to include products designed for men and children and quickly attracted interest from David Jones reps, who invited Tran and Liu to sell from the company's Elizabeth Street store in Sydney.
The brand has more than 185,000 followers on social media, around 40,000 active customers at its online store and is "on track to achieve sales for the FY17 financial year of approximately $19 million", Oroton reps stated via a press release this week.
Tran and Liu and other TDE shareholders will be entitled to another million dollars' worth of Oroton shares on top of the $1.8 million already received if they meet performance criteria.
"The TDE brand, management team and online presence will provide OrotonGroup with fresh new growth options and access to a fast-growing, younger Australasian customer base, presenting attractive future growth optionality over and above that already embedded in our business today," says Oroton Chairman John Schmoll.
Oroton yesterday announced a 52 per cent loss in profit in its half-year financial report ending January 28 along with a 10 per cent fall in revenue.
Schmoll said low foot traffic in factory outlet stores and poor sales from discontinued lines accounted for much of an 11 per cent drop in like-for-like sales and eroded positive outcomes from full price, concession and international stores.
But like-for-like sales in the company's American GAP apparel range were also down 12 per cent due to a lack of customers and poor interest in the range.
Oroton executives are hoping their partnership with TDE will attract a younger market and expand Oroton's opportunities for vending platforms.
Tran and Liu have access to some of pop culture's current social media icons, recently using celebrity model Hailey Baldwin to create and endorse a limited edition product capsule called #TheHaileyLimited.
Oroton's investment is "expected to be immediately accretive with double-digit EPS accretion forecast for FY18", the company said in a statement.
John Schmoll and Alyce Tran were both contacted for comment.
Business News Australia
Author: Mia Armitage Connect via: Twitter