After launching its Pre-Loved by Azura Reborn second-hand luxury fashion offering on The Iconic earlier this month, Azura Fashion Group has now closed a $2 million seed round aimed at rolling out the circular economy initiative to customers worldwide.
The round was backed by investors including Utiliti Ventures, Halkin Ventures, Jefferson Capital Partners and Archangel Ventures.
Co-founded by Tim Bloore and Sam Wood in 2019, Azura began as an AI and machine learning-driven curation service feeding luxury fashion brands into global e-commerce marketplaces, with operations in the US, the UK, continental Europe and Southeast Asia.
But just as e-commerce growth started to slow down in FY22, it dawned on the company's co-founders that their technology could be applied to a growing demand for pre-loved clothing and bags, which would be both more sustainable and practical for its customers and retail partners.
"One of the biggest hurdles we came across was returns. We had a lot of returns coming in and just sitting on the balance sheet, so we looked at different ways of how to liquidate those returns," says Wood, who on the same day as the exclusive launch with The Iconic happened to win the 2022 Sydney Young Entrepreneur - Fashion & Design Award.
"Second-hand clothing was starting to become bigger and bigger thing for us, and took up more revenue, so we basically enabled all of our returns to be sold as pre-loved and they just took off.
"Now 40 per cent of our business is secondhand clothing, so we're really enabling that whole circular economy."
With The Iconic adding to other exclusive partnerships Azura has such as Farfetch and Net-a-Porter, Wood believes the Azura Reborn label could represent the lion's share of sales within a few months, and definitely within a year.
"The Iconic have been very supportive of this, and this has been a deal that’s been in the works for nearly a year-and-a-half, so there were a lot of hurdles to go through to make sure we launched when we were fully ready," Wood tells Business News Australia.
"We have had a lot of retailers reach out to us that are wanting to do something very similar. It’s definitely an avenue that a lot of marketplaces and retailers are wanting to get on board with.
"We can enable other companies to become circular by helping them move their returns, helping them shift their products that have been opened and sitting in the warehouse, to stop these products ending up in landfill but also giving businesses another way to generate income."
He says the funding will help Azura in its mission to become the "number one distributor of circular fashion in Australia", providing free cash flow to boost capacity, warehousing, inventory and sales.
"What we’re rolling out in January will be a buyback system so customers will be able to sell their secondhand luxury bags back to Azura or through different avenues, and we would be able to purchase those bags upfront," he said.
"Rather than them saying ‘I want to sell this bag’ and us listing it on our platform and when they get sold, we’ll pay, what we're enabling customers to do is sell back to Azura, and we’ll purchase those bags straight away and we'll be selling them to retailers all over the world.
"This money allows us to expand that reach too in sales and operations. For example we’re currently selling across 60 retailers around the world now. Our goal is to be selling across 100 retailers by middle of next year.
"We are very, very small in the early days, and we’ve only been operating since April 2019, but we’ve been growing at quite an amazing rate so we’ve got a huge way to go yet."
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