The company aimed to help parents with a common problem: buying affordable clothes for their growing kids. Over the past two years it served more than 25,000 families and 50,000 kids in all 50 states. But it was unable to scale up and ran out of cash.
“Venture-scale businesses need good margins to be able to sustain themselves and scale,” said CEO Elise Worthy. “It turned out we just couldn’t offer the prices that we wanted to and run a scalable business.”
The company, headquartered in Seattle with a fulfillment center in El Paso, Texas, let go of 13 employees as part of the shutdown. It will also close its brick-and-mortar location in Seattle’s Wallingford neighborhood.
In 2017, Worthy and her husband bought Kids on 45th, which originally opened three decades ago and had long been Seattle’s most well-known and oldest children’s consignment store. The tech entrepreneur turned an old-school brick-and-mortar concept into an innovative e-commerce service.
Last year the startup raised a $3.3 million funding round from YesVC, an early-stage firm started by Flickr co-founder Caterina Fake; Maveron, the Seattle firm that previously backed e-commerce giants such as Zulily and eBay; and other investors including SoGal Ventures, Sesame Street Ventures, Collaborative Fund, Liquid 2 VC, and Brand Foundry Ventures.
Kids on 45th took advantage of partnerships with nonprofits and thrift organizations to source a supply of “nearly new” kids clothing that was discounted by 70-to-90 percent off similar products online. Customers could select the types and sizes of clothing they needed — four pairs of pants, three long-sleeve shirts, two dresses, etc. — and Kids on 45th stylists put together a curated box that was shipped to doorsteps. Items sold for as low as $1.99 each.
Worthy previously described Kids on 45th as a “StitchFix-like experience without the cost or required subscription,” referencing the popular online clothing box service that also sells kids clothing.
Worthy, who co-founded Seattle-based Ada Developers Academy, said the company could have focused more on unit economics of the business, as well as customer retention. She added that “it’s very difficult to compete with large-scale unsustainable global business practices.”
“If we kept just one garment from being manufactured unsustainability, I will call that a win and a step in the right direction,” she said.
Worthy is appreciative of the Seattle investor ecosystem that supported Kids on 45th and said “we have lots to celebrate.”
“Seattle is a great place to start a company,” she said.
Kids on 45th employed around 50 people at its peak. The company raised $4.7 million to date.
Source: Geek Wire
