No matter how big you get and how much success you have as a startup, failure hurts.
That’s a lesson Shoes of Prey co-founder Jodie Fox has learned shutting down her concept stores in America and Australia, taking her business back to where it all started – online only.
“It never gets any easier when something doesn’t go perfectly as planned,” she told Business Insider.
The women’s footwear business is closing its design studios in Nordstrom and David Jones, having not seen the desired returns need in order to continue with the partnerships.
Shoes of Prey secured a the partnership with Nordstrom in November 2014 after 18 months of negotiations.
At the time, Fox said the deal had the potential to triple Shoes of Prey’s business.
She went on to open six stores in the US department chain , as well as continuing the existing David Jones partnership with a design studio in its Sydney flagship store.
Last year Shoes of Prey also took on a $US15.5 million investment to increase production to cater for an expected increase in demand.
While making the decision to end the retail presence last month wasn’t easy, Fox said opening the physical stores was an “experiment” and she has “no regrets”.
“We’ve made a reasonable investment in testing something that we definitely should as a retailer, and it was a small enough experiment but robust enough for us to make the good decision about what we do with our strategy,” she said.
“As a founder you never want to think about anything being a setback, because it seems like a bit of a negative mind frame, but I think that it’s something that didn’t unfold the way that we thought it might have.
“I’m really glad that we tried it, because I think that we needed to sort of satisfy that curiosity and the opportunity of it. I think it’s possible that we’ll revisit it again in the future, it’s just not where we see the opportunity from the numbers that we’re seeing back.”
And while Fox is seen as a seasoned entrepreneur in the industry, she says these events reinforce that setbacks are a natural part of a startups evolution.
“Personally speaking, just remembering all those things, that going through startup land is not always simple… but you can’t be afraid to evolve,” she said.
“Things might not turn out exactly the way that you think they will be… but just to keep looking at it, and thinking about all the different ways that you can twist it and turn it. Lessons learned are always good ones.”
Despite the failure, Fox says the stores gave the business great brand exposure, helped connect with customers, engaging them in conversations that wouldn’t have occurred otherwise, and provided insights into future growth opportunities.
“The strategy that we often talk about with this kind of thing is just bullets and then cannonballs. You shoot a few bullets in that direction first, see how it works, and then if it seems like it’s the game changer for the business then shoot the cannonballs that way too. But for us we kept looking at that, and what we see is that it is actually online,” she says.
“In terms of what the stores were making, cost base for the stores is like 25%, and they’re only contributing 15% to the business.
“We have so many things that we’re invested in in the online space. We’ve redone the whole user experience, we’ve also invested in a new branding campaign, we’ve also been working on the scaling of the manufacturing.
“Over the past 12 months we’ve averaged two weeks on average to deliver every pair of shoes, which is incredible, considering we started out at eight weeks. So for us that experience is where that investment is happening… it’s such an obvious thing.”
When asked how much they’re set to lose from the closures, Fox said it “shouldn’t be that costly”.
“If we had opened too many stores, too quickly, then we could be in a bad position where we’d have to go and fundraise again, but it’s not the case.”
But how does it effect the investment deal with Nordstrom?
“They’re invested in us, they’re not necessarily invested in the channel being online or offline,” says Fox. “What they’re invested in is that idea of retail. So we will continue on with nordstrom.com.
“And it was a similar story with David Jones, obviously minus the investment piece. For them it was more kind of understanding what the shape of this is and what the opportunity is altogether.
“There wasn’t any friction in those relationships.”
The setback for Shoes of Prey, a pioneer in the customisation space, will be closely watched by startups following in similar footsteps. Fox said she hopes her journey will helps others in the industry.
“I have a vested interest in making sure that mass customisation and on-demand manufacturing is something that is moving forward as much as possible in the future,” she said.
“Shoes of Prey isn’t just about shoes, we believe it’s about a bigger movement that moves us towards more sustainable businesses that aren’t reliant on guessing what people want.
“I definitely not only feel a responsibility but a strong desire to share and continue to have conversations all the time to make sure that we’re all lifting each other up in this particular new industry.”
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