To say Carolina Lopes-Souto and Michelle Raic have a passion for fashion would be an understatement.
Their Sydney-based business, LoVu, describes itself as the online destination for Australia’s emerging and established fashion designers.
It was founded in July 2012, although the site officially launched in November.
Lopes-Souto talks to StartupSmart about how she and Raic met each other, the store behind their business name, and why they’ve introduced a “social involvement promotion strategy”.
How did you and Michelle meet, and what prompted you to go into business together?
We met when working in retail together whilst still studying. I actually interviewed Michelle for her job there and we hit it off straight away.
We both had a love for fashion and had ideas of opening a business in the fashion industry.
I came to a point that I was ready for the next step in my life and was exploring business ideas, and got to talking with Michelle who wanted to work with emerging designers online.
This was the start of the concept that evolved into what LoVu is today.
We both complement each other beautifully in business. I am great at making the hard decisions and putting things in place whilst Michelle is great at building relationships with designers and suppliers.
How did you come up with the name?
It is a combination of our two surnames. Michelle’s maiden name is Vukovich and mine is Lopes. Put together, Lo-Vu.
How did you fund the business and what were your start-up costs?
We used several different ways to fund the business, from personal investments by both owners combined with a bank loan.
Our start-up costs came to roughly $50,000, which included things such as the government legal cost to set up a company, equipment, merchandise, PR, accounting, lawyer/legal documents, marketing, and building the site.
How many staff do you have?
At the moment I am the only full-time employee, covering the manager role. This essentially involves running every aspect of the business, from website updates or organising finances to direct customer requests.
Michelle has other work commitments at the moment. However, she is sporadically involved with managing relationships with designers and suppliers.
How do you promote the business?
At the moment, we are mostly using our network to promote the business.
As LoVu is essentially a network of designers, we leverage this to create word-of-mouth using these opinion leaders to reach the core of our target market; people who have an interest and actively seek out new fashion.
We also use the social media channels such as Facebook and Instagram to build our brand image and communicate directly with people who are interested in what LoVu has to offer.
We also use what we call a social involvement promotion strategy. This involves encouraging the participation of our customers in our communication.
We are looking into involving some loyal customers in our next photo shoot and also adding a “ways to wear it” section to the website, which allows customers to add photos of them wearing our clothes. We believe that getting our customers involved in our communication will build a stronger loyalty to the brand.
What are your revenue projections for 2012/13?
Our projections for LoVu in 2012/2013 are for a revenue in sales of somewhere between $300,000 and $350,000.
How is your fashion website different from all the others?
LoVu is about displaying emerging designer clothing – that can’t really be bought through any other medium – in a well-presented, user-friendly online shopfront that always takes into account our target market.
We are offering emerging designer pieces as well as established; we give the consumer the option to purchase something original and not mass-produced.
LoVu also prides itself on allowing any fashion-conscious consumer to purchase of-the-moment clothing no matter what their budget.
We believe that you can be fashionable no matter how much you want to spend. This is why LoVu makes sure we stock a good split of clothing both over and under $250.
You’re both young entrepreneurs. What are the pros and cons of that?
Pros: creative freedom, creating our own career path, realising a dream, job satisfaction, fresh ideas.
Cons: self-learning, growing a network from scratch, risk, mature/experienced competition.
What’s the biggest risk you face?
We face the usual financial risks with any up-and-coming new business that has bank funding.
Is there anything you would have done differently?
We have learnt a lot through the ups and downs of setting up the business, so I don’t think there is anything I would change as I believe it was a valuable lesson.
However, I do think we could have maybe been more informed on the required budget needed for deposits for the following seasons.