Cult Sneaker Brand Axel Arigato Secures a $7.5 Million Investment

LONDON — Axel Arigato, the cult sneaker brand that drops new styles every week, has secured a $7.5 million investment from the new specialist fund Vaultier7, WWD has learned.

Albin Johansson, CEO of the Sweden-based label, said the investment will be put toward consolidating the brand’s multichannel approach, strengthening online and wholesale, scaling internationally and building on the success of its London flagship in Soho, a “cultural hub” of music and art events, and collaborations with other emerging brands.

“The idea is to expand the retail network and continue with the already-proven store concept in cities and areas that fit the brand values. Primary target cities at this stage are New York, Paris and Copenhagen,” said Johansson, adding that the overall aim is to “develop and evolve with customers and build a culture around the brand.”

The investment — the brand’s first major chunk of money — will also be used to ramp up the clothing and accessories offerings. Axel Arigato, whose creative director is Max Svärdh, has already tested ideas and concepts, and plans to build on them, with the first extended clothing collection set to launch for fall ’18.

The business partners are in Paris selling the first full clothing collection, which is unisex and composed of 130 pieces, including a puffer, a clutch of Harrington jackets in cotton and corduroy, tracksuit tops and a coat. Going forward, Svärdh said the plan is to do special pieces for women. The brand has done clothing capsules in the past, mostly in cotton jersey.

Vaultier7 founders Montse Suarez and Anna Sweeting said they are enthusiastic about partnering with the brand for the next phase of its journey. “Axel Arigato has always stood out to us as a clear disrupter in the lifestyle segment, with a distinctive attitude and a digitally shrewd strategy, underpinned with a compelling product offering.”

Axel Arigato was born as a digitally native brand in 2014 and reached $9 million in turnover in less than three years. It takes its inspiration from various elements of Japanese — and digital — culture, and its core business is high-end sneakers for men and women. Stockists include Harrods, Harvey Nichols, Brown Thomas, Moda Operandi, Net-a-Porter, Selfridges, Nordstrom and Printemps.

Svärdh said since the outset, Axel Arigato has used a “Drop of the Week” strategy, which sees shorter production and delivery lead times and inspires fast sell-throughs. “By forgoing traditional channels and engaging with customers directly, we are able to excite our customers — no matter the season or any other factors.”

Going forward, the brand plans to continue with its weekly drops, which have included a mix of items ranging from new sneaker styles to slippers, bathrobes, eye masks and small leather goods.

The secret to its quick delivery cycle is a tight relationship with factories, most of which are in Portugal. “We try to design in advance and always have a lot of styles in the pipeline,” said Svärdh — although the team admitted that that strategy can be challenging at times.

“We’re sending orders every week, which means we can never go on vacation,” said Johansson.

The investment is one of the first from Vaultier7 whose aim, according to the founders, is to support “challenger brands” in the personal-care and lifestyle space, and newcomer companies that have a distinctive attitude and a “digitally shrewd strategy, underpinned with a compelling product offering.”

Suarez and Sweeting are looking at companies with revenues of between 3 million and 15 million pounds ($21 million), and providing growth capital between 2 million pounds and 10 million pounds, with a focus on the U.K. and Europe. They said they want to partner with small companies after the angel investor and venture capital stage, and before midsize private equity players are ready to invest.

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