- Shoes of Prey has ceased normal trading operations.
- The company is actively assess “all options” including whether it will sell, or reboot at a later date.
- A number of jobs within the company will be axed as a result.
- It comes after it appointed an investment bank to either find a buyer for the business, or refinance it.
Shoes of Prey, the custom footwear business that was one of Australia’s original startup success stories, is stopping delivery of orders to customers and appears on the brink of shutting down.
Co-founder Jodie Fox announced today that the Australian custom shoe design business had paused orders to actively assess “all options” including whether it will sell, or reboot at a later date.
The website currently reads:
When we started Shoes of Prey back in 2009, we couldn’t have dreamed that we would have the opportunity to share in such an incredible adventure. And you were the most wonderful people to have that adventure with. Today we’re pausing to consider our options for the future of our business, and we have stopped taking orders. We have reviewed all of our orders and if we see that we are unable to make your shoes, you will be fully refunded. If you have any questions, please email us at [email protected] and we will help you.
“Just like every company, behind the scenes we faced struggles,” Fox wrote in an Instagram post today.
“While all indicators and data were positive, we were not able to truly crack mass-market adoption.
“We remain passionate and positive about our vision for the future of fashion retail. But we are making the difficult decision today to pause orders and actively assess all our options to either sell, or at a later date, reboot the business with substantion changes.”
She also suggested that the company will be cutting jobs within the company as a result.
“We will be saying goodbye to many of our wonderful teammates, and we are actively helping them transition into new positions with other companies.”
“We will cease normal trading to go through this process. Our customers with outstanding orders will either receive their shoes as promised, or a full refund if we have been unable to make their shoes before this pause,” she said.
It’s the latest development in what has been a rough ride for the Australian startup darling.
Back in March, Shoes of Prey appointed investment bank Ohana & Co to carry out a dual-track process, to explore either a sale or refinancing of the business.
In August, troubled fund manager Blue Sky said it was writing down the unit value of its investment Shoes of Prey from $1 in the March 31 quarterly report to 12.93¢ — a loss of almost 87% — following concerns about its liquidity profile and ability to raise additional capital.
In a letter, cited by the AFR, Elaine Stead, head of venture capital, said the asset manager had been hopeful Ohana would find interested buyers for Shoes of Prey.
“Venture-stage companies are companies that are not typically profitable,” Stead told investors.
“While we invest in later stage venture companies that have proven market fit, generally with growing revenues and a clear growth trajectory – they are at risk of running out of capital if they cannot continue to raise money to support their capital requirements.”
The early days
Shoes of Prey began back in 2009, started by Jodie Fox, Michael Fox and Mike Knapp.
The idea for the business was inspired by Jodie’s personal experiences.
“I was solving a problem of my own. I’d always liked shoes, but I never loved them because I couldn’t find exactly what I was looking for. Either it wasn’t quite the right colour, there was an embellishment I didn’t like, not quite the right heel height,” she said.
“When I was traveling, in the same way that you find someone who will make a custom suit for you, I found someone with whom I could commission shoe designs. My shoe collection became really exciting, and my girlfriends asked me where I was getting my footwear. When I explained, they asked me to create shoes for them too. Concurrently, my two business partners Michael and Mike were at Google and they became really excited about the opportunities in online retail. We all came together and Shoes of Prey was born.”
It went global in 2014, after securing a major deal with Nordstrom, and went from strength to strength, opening 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.
In 2015, Shoes of Prey took on a $US15.5 million investment to increase production to cater for an expected increase in demand.
By 2016 it had raised over $US24 million from venture capital funds such as Blackbird Ventures, Southern Cross Venture Partners and Silicon Valley heavyweight Khosla Ventures, and Fox listed in Business Insider Australian coolest 100 people in Australian tech.
But that year there were a number of changes to the business, in what may have been the first speed bumps the company faced.
In October, Fox announced the business was closing the concept stores it had launched in America and Australia, taking the company 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 at the time.
In November, Knapp announced he was leaving the business, stepping down as CTO to pursue his passion for early-stage startups.
He did, however, stay on to be an investor.
Fox told Business Insider at that time that it was a “bittersweet” decision.
“It’s been a while coming… [But] it’s been really emotional as well,” she said, referring to them as the Three Musketeers.
“This company is our baby. As a founder you want to build something that is bigger than you, and you want to build something that can exist, run and thrive without you as well. So that fact that one of the founder is stepping down is testament to that.”
She said, the closure of the concept stores, and Knapp’s resignation were “not connected whatsoever; it would be wildly incorrect to put them together”.
“The closure of the stores is an evolution of our strategy… and we’re actually hitting an acceleration as we go towards pure-play,” she said.
“We have an extremely solid strategy, we’ve hired these people who outstrip all of our expertise in that area… we have a long runway in terms of cash.
“When we took on the $15.5 million in December last year, one of the biggest shocks for investors was that all the founders were still in the business seven-and-a-half years later. It’s pretty normal for founders to step out when the time is right for them.”
Leading the way
Throughout Shoes of Prey’s journey Fox remained a constant, encouraging voice for others in the industry.
She was a genuine leader with transparent intentions.
For example, when making the decision to end the company’s physical retail presence Fox said she had “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,” told Business Insider at the time.
“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.”
She used the lessons she had learned as a leading startup to educate and help emerging ones.
“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.”
She, and the business, even mentored flourishing startups, including customised surfboard startup Disrupt.
“It’s a great way for me to reflect on our learnings and share back into the start up community by helping them not to make the same mistakes we did,” she said.
And acted as a role model for other women in the industry looking for advice in difficult situations.
Those qualities shone though her Instagram post today in which she said “I hope that we leave a strong legacy for others to learn from and adapt, and it is out to be able to build on this in the future as well… I watch with great support and hope as other brans can pick up where we’re leaving off for the moment.”
Read Fox’s full message >>
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