Couple's fashion, biz skills drive indie retailer
When Susan Gregg Koger goes shopping, she often purchases 200 to 300 items at a time.
But she claims she is not a shopaholic.
Buying is her job -- creative director of ModCloth.com , the Pittsburgh-based vintage fashion company she and husband Eric, who is the CEO, own.
ModCloth.com is one of the most popular online destinations for indie clothing. The site pops up as a top choice on Google searches for indie and retro clothing and vintage outfits. It offers 1,200-plus products and more than 41,000 Web pages that link to the site. It attracts more than 300,000 shoppers per month.
Sales jumped from $500,000 in 2007 to nearly $3 million in 2008.
"I go to shows all over the world to look for merchandise," says Susan, 24. "I love to shop. At least I don't have to carry everything home with me. They ship the merchandise to us."
That wasn't always the case.
There was a time when the couple was just starting out that they packed their car with clothes they bought at shows and drove them from New York City.
The business has blossomed from its humble beginnings in Susan's Carnegie Mellon University dorm room to an 11,200-square-foot warehouse in Ambridge and a 7,550-square-foot office in the Strip District.
Pretty soon, that won't be enough space, says Eric, 25.
Selling vintage-style clothing wasn't the way Susan thought her career would unfold. She started thrift shopping as a hobby on weekends after she graduated from high school in Florida.
"I loved the thrill of the hunt," she says. "I loved to find Dior coats and Chanel bags or clothes with vintage buttons. Even if the piece of clothing wasn't that good, I could use the buttons for something else. I would even buy things that weren't my size, because they were such a good deal."
She decided to sell some of the treasures she had found. She took digital photos of apparel and posted them on her newly created site -- ModCloth.com. She got an order the first day. After graduating from Carnegie Mellon in 2006 with degrees in business and German, she decided to keep going because she already had a following.
Things really took off after Eric graduated in 2007 with an MBA in entrepreneurship and joined the company full time.
Items on the site cost an average of $33. Some of the hottest new designers include BB Dakota, Tulle Clothing, EC Star, Stop Staring and Jeffrey Campbell Shoes.
"They are smart businesspeople, and that is what we teach here," says Gretchen Harnick, department chair of fashion and retail management at the Art Institute of Pittsburgh. "You need to understand your market, and if you look at their photography and their ad campaign, you know they know their customer. They speak to their customers in their own voice, and they have big goals. Their styles are really on trend and fashionable. They also have things that are unique that you can't find anywhere else."
The ModCloth target customer is 15 to 30 years old, but most sales are to women between ages 18 and 23.
The outfits on ModCloth are "way fun and vibrant," says customer Krystal Koonce, 22, of Dallas. She says the clothing is perfect for someone her age who wants to maintain a teenager mentality but be able to dress a little more grown-up.
"I want clothes that are upbeat, and ModCloth certainly has that," Koonce says. "I have bought so many adorable dresses that I wear all the time and get so many compliments. The minute I checked out the site, I fell in love with it."
ModCloth customer service is superb, says Carolina Harris, 28, of San Jose, Calif., who says packages arrive quickly despite having to travel across the country.
"I love their selection of shoes and home accessories, too," she says. "I also like that it is an indie shop, because I support local artists."
ModCloth's one-of-a-kind section is a favorite of Jessie Mae Hayes, 31, from Carrboro, N.C., because it allows one to look individual and stylish.
"They show such care in everything they buy," Hayes says. "It's also their attention to detail in every aspect of the sale that sets them apart."
The couple know how to divide responsibilities.
"This works very well for us because it is a clean division of labor," Eric Koger says. "I don't question her fashion decisions, because she is the creative side of the business and I am the business side. Sometimes, I have to reel her in a little when she wants to buy 'everything.' We talk about ModCloth all the time -- at work, at dinner, on the weekends."
The Kogers live in Friendship and chose to remain in Pittsburgh because of the low cost of living and the creative talent here.
"I love visiting other cities and shopping for clothes," Susan says. "But it is so nice to come to Pittsburgh, where life slows down a bit, where people sit on porch swings and enjoy life."
A big reason the business is successful is that Susan is in the age group of the target market and, like her customers, is into looking different, she says.
"What you wear is a statement about yourself," Eric says. "So we like to give our customers a variety of options so they can dress differently. We are a lifestyle retailer. We look at a 360-degree view of the customer, so we understand what she likes. There is no reason to be limited to the constraints of a store, because they can only have so many products in stock, whereas we can have millions on our site."
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