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Why short-seller Andrew Left is bullish on Revolve: 'They’re just killing it. Absolutely killing it.'

Ines Ferré
·Markets Reporter
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The investment case for e-commerce retailer Revolve (RVLV) is so promising that even famed short-seller Andrew Left is bullish on the stock.

“Revolve has done what I call ‘fashtech’: the merging of fashion and technology,” Left said.

On its’ second day of trading, the stock reached an intraday high of $44.77, more than double its IPO price of $18 a share.

The founder of Citron Research told Yahoo Finance’s YiFi AM he became aware of the company, which is geared towards Millennials and Generation Z customers, way before last Friday’s IPO thanks to all those packages that arrive at his house for his wife.

“After Amazon (AMZN), it’s Revolve,” he said. “I thought it was only her, ‘till I spoke to her friends.”

Left points out the ease at which customers can return items.

“It’s a piece of clothing. It doesn’t break, you put it right back in. You send it, and if you read the prospectus, the S-1 on Revolve, they’re just killing it, absolutely killing it.”

LA QUINTA, CALIFORNIA - APRIL 14: Madison Pettis is seen at Revolve Festival during Coachella Festival on April 14, 2019 in La Quinta, California. (Photo by Christian Vierig/Getty Images)
LA QUINTA, CALIFORNIA - APRIL 14: Madison Pettis is seen at Revolve Festival during Coachella Festival on April 14, 2019 in La Quinta, California. (Photo by Christian Vierig/Getty Images)

In 2018, the company reported a profit of $31 million on sales of about $499 million. In its’ S-1 filing, Revolve highlights its inventory technique: “we make shallow initial buys, then use our proprietary technology to identify and re-order strong sellers, turning the fashion cycle from a predictive art to a data-driven science.” As a result the company says about 79% of Revolve’s net sales last year were at full price.

“The lack of not having to need sales, to move inventory, it’s really just an amazing company,” said Left. “The company is anything but commoditized. They’ve done what a Nordstrom’s (JWN) or Macy’s (M) could never do.”

Revolve prides itself with its network of more than 3500 influencers and social events to drive traffic to its website and mobile app. While there’s a risk more scrutiny could fall upon social media influencers, Left doesn’t see that impacting the company long term.

“Even if you have regulation with the influencer market, it’s still okay,” he said. “You know, it might slow things down a little bit. But this is really the first company we’ve really seen that’s taken fashion, technology and putting it together to learn how to serve the consumer better.”

Ines is a reporter for Yahoo Finance. Follow her on Twitter.

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