Tina Bhojwani, co-founder and CEO of luxury vegan shoe brand AERA, recognized the need for change when she saw firsthand ...
Fashion is costing the Earth. Literally.
Fashion is a massively polluting industry that is accelerating the pace of climate change, often mistreats workers and abuses animals.
The fashion industry is the second-largest consumer of water worldwide, produces 20% of global wastewater and is responsible for 10% of global carbon emissions - more than all international flights and maritime shipping combined. If nothing changes, by 2050 the fashion industry will use up a quarter of the world’s carbon emissions budget.
The effects of climate change are happening right now: ice caps are shrinking, global water shortages are happening, sea levels are rising and the weather has become less predictable than ever before. Something needs to be done – and sooner rather than later. Otherwise, the world as we know it could quickly become a very different place, and not for the better.
Then there is the human cost of fashion: many workers are often paid inadequate wages and forced to work long hours in appalling conditions. A lot of fashion brands are produced in third world countries, where workers' rights are often overlooked.
Finally, the use of animal derived materials by the fashion industry, such as leather (exotic or not) and fur, raises additional concerns. Not only does it significantly contribute to fresh water pollution and global warming, but it also raises significant ethical questions regarding the abuse of animals.
Yet, people will always love fashion, and especially luxury fashion. There must be a better way...
AERA: Certified Vegan and 110% sustainable luxury footwear
AERA is leading the luxury footwear industry forward by placing equal value on product, people and the planet. With timeless designs that are ethically crafted from certified vegan materials, we strive to make sustainability the new normal.
AERA's philosophy has been built on three principles, and everything we do adheres to them. Our principles are even described in our Certificate of Incorporation as a Delaware Public Benefit Corporation.
1. "Good for You": Our shoes are beautifully designed, of the highest quality and comfort, accessible (within the luxury market segment) and timelessly fashionable. And knowing that by buying a pair of AERA shoes you are "looking good" but also "doing good" makes customers "feel good" too.
2. "Good for People": We only work with highly ethical, like-minded suppliers, who pay their employees, at the least, a living wage. We will share our success with all our employees and invest in their well-being.
3. "Good for the Planet": We use high quality, vegan, eco-friendly materials and processes, as much as possible, without jeopardizing our first principle. We then scientifically measure all the environmental impacts of our shoes, transparently present them via our website, and then work with certified third parties to offset these impacts by 110%, thus not only reversing all our negative impacts, but actually leaving the planet better off.
AERA offers luxury without guilt. 100% luxury footwear that are cruelty free, ethically crafted by Italian artisans and 110% sustainable.
Luxury footwear without a footprint
Handmade with care by local artisans in Veneto, Italy. Certified vegan. Measuring and offsetting our environmental impacts by 110%. That's what "100% Luxury 110% Sustainable" footwear means.
Our luxury shoes are designed by our co-founder Jean-Michel Cazabat, a world renowned shoe designer, to be timeless and seasonless, so that they can be enjoyed for many years. We believe that this should be the first step of any truly sustainable fashion brand.
We source all of our vegan materials from Italian suppliers, so as to guarantee their quality, ensure that they have been ethically produced, and to minimize their transportation impacts to the environment. Each pair of our shoes is handmade over two days, by true artisans in family operated factories in the Veneto region of Italy, the birthplace of luxury shoe making. Our supply chain has been tested over our test-launch phase in 2019, and is scalable to cover our planned needs.
Our product line consists of 15 timeless and seasonless Women's and 5 Men's styles - although we have now decided to focus on women's shoes for the next phase of our development. Prices range from $325 for ballerinas to $695 for knee-high boots. We created a line of timeless and seasonless essentials to avoid taking part in the seasonal markdown calendar. We intend to thoughtfully introduce more styles in the future, always under a "less is more" philosophy.
We use natural, recycled and synthetic materials. Currently, on average, our shoes' materials consist of 50% natural (such as cotton and wood) and 50% synthetic materials, some of which are recycled. We aim to continuously improve the eco-friendliness of our materials, as better alternatives become available, without compromising on quality and aesthetics.
We have a strong relationship with our main materials' supplier, who has over 60 years of experience pioneering vegan leather alternatives. Together, we are innovating on materials that are not only vegan, but look identical to their non vegan counterparts.
Our shoe boxes are of equivalent quality to any luxury shoe box, however, ours are made in Italy, of material that contains 40% post-consumer recycled waste and 15% residues of organic waste. The paper used is FSC certified and GMO free, and is produced with EKOenergy, resulting in a 20% reduction in carbon emissions. Inside the box, you will find 100% post-consumer-waste recycled tissue paper and our 100% Global Organic Textile Standard certified cotton dust bag.
Loved by Press and Celebrities
AERA has already been featured in some of the biggest publications in the world, including Vogue, Forbes, O the Oprah Magazine, People and Elle. We are establishing a reputation for accessible luxury, sustainable, handmade, vegan shoes. Please see the "Press" section for all of our coverage.
We have also established a strong celebrity following. Celebrities love the idea of gorgeous, luxury, vegan and sustainable shoes.
During our soft launch (June to December 2019), when we tested our operations and sales setup, we achieved $63k in sales (165 pairs, average per pair net price $384). In 2020, and while we have not yet invested in a full launch (given the circumstances since February), we have already achieved about $47.5K in sales (Jan-Apr).
Fashion-forward consumers who care about looking good and doing good
According to the 2019 edition of Pulse of the Fashion Industry, published by the Global Fashion Agenda, Boston Consulting Group and Sustainable Apparel Coalition, 75% of (fashion) consumers surveyed view sustainability as extremely or very important. More than a third of consumers report they have already switched from their preferred brand to another because it credibly stands for positive environmental and/or social practices. More than 50% of consumers plan to switch brands in the future if another brand acts more environmentally and socially friendly than their preferred one. However, consumer considerations of sustainable practices are not yet powerful enough to be the most important driver of purchasing behavior. For 7% of consumers, "sustainability" is the key purchasing criterion, while 23% prioritize "high quality", 17% "looking successful" and 16% "receiving good value for money".
AERA has been built to satisfy all of the above: we offer luxury, high quality, handmade in Italy, vegan and 110% sustainable footwear, that are gaining traction with celebrities and the press, and are priced much more competitively vs. comparable luxury footwear brands.
Primarily Online & D2C
AERA's first stage business model is built as 80% online (and pop-up store) D2C in the US only, and 20% wholesale (US and International) in order to make the brand more widely available.
Shoppers can purchase our shoes directly online from our website - www.aeranewyork.com - and this helps our pricing be competitive vs. other luxury footwear brands. Currently, we ship to all US States only. Prices range from $325 to $695, which is much less expensive than comparable handmade-in-Italy, luxury footwear brands, that have no or limited sustainability claims. We offer free shipping and returns on all orders, and we offset all associated environmental impacts. Our pricing includes all the costs of measuring and offsetting each pair's environmental impacts by 110%.
We believe that a truly sustainable business model cannot be a part of the vicious cycle which is the seasonal markdown calendar of the fashion industry. Thus, our styles are timeless and seasonless, and we intend to have the same styles available for a long time, and will only carefully introduce new styles once we reach a wider audience. We plan, on average, to sell each pair D2C at a 12.5% discount - our 2019 test phase sales were at an average of just 6% discount.
We plan to launch a pop-up location in NYC, when the conditions are right, using a modular, sustainable setup that can then be transported and used in popups in other major US cities. In this way, we can offer our customers an omnichannel experience.
We plan for 20% of our sales to come from wholesale, either to brick & mortar or online retailers. To date we've had discussions with retailers such as Nordstrom, Farfetch and Net a Porter. In addition, we are considering international wholesale partnerships as well. In February 2020, we delivered 243 pairs to Bloomingdale’s Dubai and Ounass.ae in the Middle East. Our CEO’s strong international expansion experience and network guarantees our international potential.
Based on the above 80-20 planned sales split, our average gross margin is planned at 67%.
Our 3 year plan (2020-2022) takes the company profitable, with an 18% Net Margin, in 2022. Overall, under our planned financial model, the company can break even once we hit the 10k pairs per year mark. For comparison purposes, in 2018, 2.4 billion pairs of shoes were sold in the US alone.
Sustainable and vegan brands are evolving into a mega trend
Sustainability is becoming a big trend in the fashion industry, as environmental concerns are increasingly top-of-mind for consumers.
In a recent study, Nielsen predicts that by 2021 the US sustainability market will reach $150B. "Nearly half (48%) of U.S. consumers say they would definitely or probably change their consumption habits to reduce their impact on the environment. Since 2014, these influential shoppers have grown sustainable product sales by nearly 20%, with a compound average growth rate (CAGR) that’s four times larger than conventional products (3.5% vs -1.0% comparatively)"
A 2019 survey led by Hotwire found that 47% of internet users worldwide had ditched products and services from a brand that violated their personal values. Protecting the environment topped that list. US shoppers also said they wanted to do business with retailers that were environmentally conscious. Fully, 47% of consumers surveyed said so.
In 2019, 32 fashion companies, including Chanel, Ralph Lauren, and Prada, as well as fast fashion players like H&M Group and Zara, signed the Fashion Pact, a non legally binding agreement to combat greenhouse gasses and emphasize sustainability in the industry . This shows that sustainability, which was just a niche concern a few years ago, is now a top industry priority.
Based on a 2018 Bain & Co. global market study, the Personal Luxury Goods market (luxury footwear is part of this segment) is valued at $290B globally, and is growing at 6% annually. Overall, shoes and jewelry were the top luxury growth categories, gaining 7% each, followed by hand-bags and beauty. Luxury sales in the Americas reached $90 billion, representing a growth rate of 5%. Online luxury shopping continued to accelerate in 2018, growing 22% to nearly $30 billion; it now represents 10% of all luxury sales. The American market made up 44% of these online sales.
Finally, the vegan shoes market is large and growing as well. According to a Feb 2020 report conducted by Grand View Research Inc., "the global synthetic leather market size was valued at $29.2 billion in 2019 and is projected to expand at a revenue-based CAGR of 7.8% during the forecast period (2020-2027). Increasing demand from the footwear sector is expected to be a key factor propelling the growth".
AERA is positioned within all 3 of these globally growing trends, as a luxury, vegan and sustainable footwear brand.
(for Sources please see FAQ section)
Luxury, vegan and sustainable is a less crowded space
AERA fills a large void in the footwear market as the only brand positioned as both LUXURY and SUSTAINABLE, that is also accessibly priced and vegan.
When designing the brand proposition, we found only a handful of established brands in the luxury, vegan and sustainable footwear space. Our "110% Sustainable" philosophy and execution (LCA and Offsets) sets us apart and ahead of other brands as far as sustainability is concerned, while our disruptive pricing - nearly 50% less vs. established luxury brands - sets us apart as well.
We believe that we have positioned ourselves in a new space within the industry, with little direct competition, and with a combination of product, price and brand philosophy which, combined, are superior to what the competition is offering.
Leading the fashion industry forward by placing equal value on Product, People and the Planet
Luxury, vegan and sustainable footwear is only the beginning.
To date, we have worked to bring the brand to full-launch-ready mode. We have product in our warehouse in New Jersey, the right people on the team, a great marketing message and materials ("Luxury footwear without a footprint") and a great plan. We have made waves with both the press and celebrities. We have completed and published all the Life Cycle Assessment work and have invested in certified Offsets for all the shoes produced to date. We have already gained listings with international retail partners, like Bloomingdale's in Dubai. Based on our Public Benefit Corporation status, we have earned the “Pending B-Corporation” certification from B Lab, and will work on attaining full certification as a B-Corp over the coming months.
Over the next months, we will focus investment on:
- Creating content for our social and digital media
- Executing a well focused digital media advertising plan
- Developing our first pop-up shop in New York City
- Further developing our press and celebrity endorsements
- R&D of new styles based on even more eco-friendly materials
We will also continue the discussions with potential, select retail partners, in and outside the US, in order to further expand the brand's presence in both online and brick & mortar retailers, aiming to maintain a 80% D2C - 20% wholesale sales balance.
Once our brand has been established enough and has gained a significant following, we intend to expand the proposition "luxury, vegan and 110% sustainable", gradually and selectively, into additional, relevant product categories, such as handbags and accessories.
Ultimately, we want to build, from the ground up, the world's first "100% Luxury | 110% Sustainable" fashion brand, and prove that luxury and sustainability can harmoniously, and profitably, coexist.
$1.305M in funding to date
Co-Founder and Investor Alvertos Revach has funded $1.305M to date through his Luxembourg based PE vehicle "Humble Holdings S.A.". $800K have been invested through Seed Series Preferred Stock, $205k through SAFEs and $300k through a non-convertible IFL.
The investment to date has been deployed to bring AERA to full launch ready status:
- Initial market research.
- Design, prototyping, samples and testing of 20 styles of shoes.
- Brand creation and trademark work.
- Supply chain setup: shipping, customs and warehousing.
- Customer service setup: ordering, payments, shipping and returns.
- Website setup and testing.
- Marketing campaign and materials creation.
- Production of 2,000+ pairs of shoes as first run.
- Completed and published Life Cycle Assessment study on all shoes produced to date.
- Environmental offsets fully covered for all production to date.
Founded and managed by 3 highly experienced professionals, with proven track records in the fashion, design and business spaces
Tina Bhojwani - Co-Founder & CEO
Fashion executive Tina Bhojwani has held key leadership
roles at global fashion brands including Donna Karan (Director International Sales & Marketing), Theory (Senior Vice President) and Dolce & Gabbana (President, North America). Throughout her 20+ year career, she has seen the impact of fashion on people and the planet, and recognizes the need for change not only as a business imperative, but more importantly as a deeply human one. She built AERA as a platform to address these environmental and social challenges, with the hope of making its practices the new normal in fashion. With AERA, she aspires to show consumers that style, design and quality can be analogous with sustainability.
Jean-Michel Cazabat - Co-Founder & Creative Director
Designer Jean-Michel Cazabat has spent his career immersed in luxury footwear. He was the president of Stephane Kélian and the creative director of Charles Jourdan prior to launching his eponymous brand in 2000. The birth of his daughter Aria five years ago brought about a greater consciousness of the world and the future of our planet, and he began to think about a new project centered around sustainability. Jean-Michel’s tremendous experience, as well as relationships with suppliers and factories in Italy, brought AERA to life.
Alvertos Revach - Co-Founder, Investor & Sustainability Advisor
Entrepreneur Alvertos Revach ran his multi-million dollar premium beverages import, marketing and distribution company in Greece for 20 years, prior to starting his investment company, Humble Holdings, in Luxembourg in 2016, as an investment vehicle for truly sustainable businesses. He believes that businesses should take the lead in undoing the harm caused to the planet and its people, by making sustainability the right and easy thing to do. Through AERA, Humble’s three principles, ‘Good for You, Good for People, Good for the Planet,’ are put into practice.
AERA's founding began with three friends, each with a deep expertise in their respective fields, who share a common passion: sustainable manufacturing and the well-being of people and our planet.
Tina Bhojwani and Alvertos Revach met as students at Georgetown University in the early 90s, and remained in touch, meeting over the years in either Athens or New York City. Over dinner one night in 2017, Tina described how, after 20 years of working for large corporations, she was ready to do something different that contributed to the greater good. Alvertos had recently left his family business to set up an investment fund focused on sustainable businesses. They discussed the urgent need for sustainable practices in the fashion industry and how they could work together in this pursuit.
Soon after, as Tina was in the process of researching a platform to create luxurious yet sustainable products within the fashion industry, she bumped into shoe designer Jean-Michel Cazabat. Having worked together in the past, they easily fell into conversation. Jean-Michel described his own career turning point, as he had just sold his shoe company and was looking to the future - and a way to make a difference.
Tina and Jean-Michel met days later and started discussing the possibility of making vegan and sustainable shoes that, Tina insisted, “cannot look like they are vegan.” Jean-Michel was up for the challenge, and already had some ideas regarding materials, along with strong relationships with factories in Italy’s Veneto. Once the business model was solidified, they shared it with Alvertos, who was immediately intrigued. He was convinced after he tried a pair of vegan shoes that Jean Michel had made for him in the summer of 2018 - and so AERA was born.