Lipsy follows Next in selling rival brands

Lipsy confirmed to Retail Week’s sister publication Drapers that it was in talks with a number of brands about stocking them on its website.

It is starting a trial with women’s young fashion brand Miss Sixty, which will launch on Lipsy.co.uk later this month.

Miss Sixty will also be sold in an unconfirmed number of Lipsy’s 23 UK standalone stores. If the trial goes well, Lipsy may look at stocking other brands.

Lipsy already sells a limited number of lingerie brands including By Caprice and Wonderbra on the website but wants a wider branded clothing offer. According to sources close to the business, it had been looking at how branded clothing was working on Next’s website and believed it could attract a significant new revenue stream and improve its offer to customers through the introduction of complementary young fashion brands.

Miss Sixty’s heritage is in denim while Lipsy is best known for its dresses, although it also sells jeans.

Miss Sixty is already sold on Next’s Directory website, but Lipsy is also targeting other brands not sold through Next, which would fit in with its younger customer profile.

Miss Sixty sales director Daniela D’Aveni said: “We feel our brand fits in well with the Lipsy customer. It’s a sexy look.”

However, not all brands have been open to the idea. Womenswear brand Mina UK said it had spoken to Lipsy about selling through its website but decided against it. Mina UK wholesale manager Danielle Butler said: “We felt it might clash too much, as [like Lipsy] we have a lot of partywear coming out. We just feel it’s not right for us, as we want to push our brand, not sit side-by-side [with someone else’s].”

This is not Next’s first attempt to enter the young fashion multi-brand market online. In 2008 it launched Brand Directory, which stocked the likes of Firetrap and Gio-Goi. However, it pulled the plug on the site last September, after migrating the brands it stocked onto its Next Directory site instead.

At the time, Next said selected brands had initially been reluctant to trade under the Next Directory banner but, after working successfully with the retailer on Brand Directory, they were happy to migrate.

Lipsy, which was bought by Next in October 2008, has been benefitting from the larger group’s greater online expertise.

According to Experian Hitwise data, Lipsy jumped to 37th highest-ranking UK website in the apparel and accessories category by visits in June this year - up from 56th place in June 2009.

Between June 2009 and June 2010 Lipsy has increased the number of visits to its website by 82%. By comparison, womenswear chain Jane Norman (currently ranked 43rd in the category) has increased its number of visits by 27% during the same period.

Branding consultancy Interbrand London chairman Rita Clifton said: “One of the challenges with being a single brand is that the brand needs to stretch enough to attract the right amount of people.”

Pointing to multi-brand online offer Asos, she added: “It has a comprehensive offer and is a brand in its own right. Having a [brand] mix is becoming very popular.”

In the year to January 30, 2010, Next said Lipsy contributed £28m of sales to the group, with operating profits before amortisation of £1m. In its current year, in which there are plans for 11 new stores, it expects profits for Lipsy’s retail and wholesale operations to be about £3m.

Beyond the online offer, Lipsy has remained largely separate from Next in operational terms, and Lipsy founder and chief executive Jeremy Stakol has stayed at the helm of the business.