Maceoo entertains minority investor as it adds stores
Maceoo, a San Diego-based fashion retailer, is opportunistically looking to bring on board a minority investor as it adds another six stores over the next year, CEO Mehdi Raad tells Axios.
Why it matters: Luxury and fashion sales continue to boom and are likely to hold up this holiday season, as it's the first time since before the pandemic in-person events are expected to proceed without interruption.
- And with wealthier clients looking to spend on outfits, the trend should continue to support store openings and investment in the category.
What's happening: The company could look to bring in outside investors in the form of limited partnerships such as private equity firms while retaining control, Raad says.
Details: Maceoo sells a full line of apparel, including tops (shirts and sweaters) and bottoms (pants and jeans), as well as blazers, outerwear, footwear and accessories.
- To date, Maceoo has opened eight stores, including in San Diego; at the MGM, the Cosmopolitan and the Aria casinos in Las Vegas; in Tampa and Hollywood in Florida; and in Dallas and Atlanta.
- Locations can cost as much as $2.7 million to build, though in some cases, costs are shared with the property owner, Raad says.
- In addition to its stores, the brand also has wholesale accounts with department store Nordstrom and luxury retailer Neiman Marcus and seeks to expand its distribution there as well.
What's next: The brand is preparing to open another physical location in San Juan, Puerto Rico. It's also in various stages of discussions for other locations including Monte Carlo and Dubai.
Of note: The company generates in the high eight figures in terms of revenue — and since the specter of a recession in the U.S. emerged over the summer, Maceoo has grown 17% year over year, Raad says.
Flashback: After emerging from the height of the COVID pandemic, "it really took a while to stabilize the business because even when they were allowing stores to reopen, there were still limited people physically shopping," Raad says.
- "So it wasn’t until mandates gradually eased that we could gradually build back up to the levels we were operating under before COVID," he went on to say.
Yes, and: "Even during the height of the pandemic, we were already setting in motion strategies that now enable us to adapt," Raad says, by negotiating flexible rents and bringing clothing production in-house.
The bottom line: Raad has used not only the creative side of his brain to create Maceoo, but the MIT graduate has also leaned on his engineering background.
- "I created my first prototype based on calculations so I could make a consistently great garment, guided by an efficient algorithm to determine the best fit — a meeting of fashion and science," he says.