Kids on 45th had long been Seattle’s most well-known and oldest children’s consignment store. But in 2017, nearly 30 years after it opened, the tiny Wallingford retail shop was ready to shut down.
That’s when Elise Worthy stepped in and bought the business. Two years later, the tech entrepreneur has turned an old-school brick-and-mortar concept into an innovative e-commerce service that has shipped 500,000 items of used kids clothing to customers across the country.
And now the Seattle startup is raising cash from top-tier investors to help fuel its growth.
Kids on 45th announced a $3.3 million funding round from YesVC, an early-stage firm co-founded 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.
The company offers a unique solution to a problem that parents with young children often face: buying affordable clothes for their growing kids.
The service takes advantage of partnerships with nonprofits and thrift organizations to source a supply of “nearly new” kids clothing that is discounted by 70-to-90 percent off similar products online. Customers select the types and sizes of clothing they need — four pairs of pants, three long-sleeve shirts, two dresses, etc. — and Kids on 45th stylists put together a curated box that is shipped to doorsteps. Items sell for as low as $1.99 each and an average of $3.29.
There is no browsing process and the entire shopping experience is designed to take less than two minutes.
“All of our competitors and incumbents rely on either a browse or discovery process,” Worthy told GeekWire. “We are specifically anti-browse. If you’re a mom who has a 5-year-old and a 2-year-old and they outgrow their pants, you won’t delightfully browse through clothes. You just want to solve the pants problem.”
Worthy previously co-founded Seattle-based Ada Developers Academy, a free nonprofit coding school for women that has graduated 250 students since launching in 2015. She left the day-to-day work at Ada in 2017 and had the opportunity to purchase Kids on 45th from the original owner.
“It seemed like such a treasure trove of data,” said Worthy, who serves as CEO. “I thought it would be so cool to buy the store and figure out how to bring it online to be a web-scaled business.”
Worthy not only started analyzing years and years of Kids on 45th purchasing data, but also observed customer experiences inside the store. Moms, especially those who don’t enjoy recreationally shopping, just wanted something to replace the clothes that their kids had outgrown.
“It dawned on me that we were investing time in a browse experience that our customers didn’t want,” said Worthy, who has two young sons herself.
The company has 15 employees in Seattle and another 15 people at its warehouse in Texas where garments are sorted into 350 categories. It has developed an efficient supply chain and distribution model to help keep handling costs low — it’s how items can be priced at such steep discounts, or as the company notes, “cheaper than Goodwill and Walmart.”
Worthy 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.
“We try to bring the StitchFix experience to 90 percent of Americans where that’s just not possible,” Worthy noted.
Jason Stoffer, partner at Maveron who was an early board member at e-commerce giant Zulily, said the “rise in value retail offline has been unable to be replicated online until now, due to the difficulties of making the business model work.”
“Elise and the Kids on 45th team have been able to sell clothing at radically low price points by challenging some of the shopping behaviors that have been accepted as a given up until this point,” he said in a statement. “They pass more savings onto their customers by pairing a global sourcing supply chain with taking on the burden of selection from moms, thereby reducing handling costs like photos, mannequins and returns.”
Worthy added that “we are really happy with the unit economics of this business.”
Kids on 45th also has an eye on sustainability, given the nature of its business, and hopes to help lessen the billions of pounds of textiles that are thrown into landfills each year. The company recently launched a new buy-back program that lets customers send in used clothes and receive Kids on 45th credit.
Worthy said the startup will prove out its model with kids clothing before exploring other potential verticals. There are no plans to open more brick-and-mortar locations but Worthy said she’s open to the idea.