Fashion startup Shoes of Prey is in liquidation. Here are three reasons behind the downfall of the venture.
1. Inability to scale
As a custom-order footwear business, Shoes of Prey was not an easily scalable business model. The operational framework for producing orders one-by-one incurred high fixed costs for the brand, without economies of scale. Shoes of Prey attemped to expand its operations through concessions in David Jones and Nordstrom, but ultimately shut them in 2016.
2. Failed mass-market bid
After several investment rounds, Shoes Of Prey attempted to tap the mass market for greater fiscal return. However, despite consumer research suggesting a growing trend towards bespoke customisation, Shoes Of Prey coversion rates were not as high as anticipated. Co-founder Michael Fox described the option of choice as causing "decision paralysis."
3. High overheads
Despite receiving a multimillion-dollar funding boost from Blue Sky Alternative Investments in March 2018, Shoes Of Prey was forced to pause all production a few months later. The cost of doing business, paired with interface upgrades and international expansion, meant it had a high cash burn rate. It once famously burnt through nearly $1 million in two months in 2016.