Usually preferring to stay out of the spotlight, Fashion Nova’s founder and CEO Richard Saghian made an unusually splashy purchase this week, paying $141 million for a mega-mansion in Bel Air.
The sprawling hilltop estate, complete with 21 bedrooms, a nightclub and multiple pools, is the type of purchase fit for a billionaire. Indeed, by Forbes’ calculations, the fast fashion mogul is worth an estimated $1.4 billion. His fortune stems from his 100% ownership of the company, which does over $1 billion in annual sales, according to a person familiar with the matter. He also has a growing real estate collection, including several mansions in Los Angeles.
Saghian, 40, made his fortune by selling fast fashion to the Instagram set, tapping celebrities like Cardi B, Kylie Jenner and Nicki Minaj to showcase the hundreds of new styles that hit the site every week.
“It’s important to have a lot of styles because our customers post so much online and need new clothes. We don’t want girls showing up to the club in the same outfit. We need 50 different denim jackets. Not just one,” Saghian told Women’s Wear Daily in 2018.
Born in Los Angeles to Iranian parents, he started the online retailer in 2006, selling low-cost club wear to women with Coca-Cola bottle figures. He wanted to take fast fashion and make it even faster, so he tasked manufacturers in his backyard of Los Angeles with quickly stitching together clothing. Rather than opening and stocking stores, he went straight online with new styles and asked celebrities and influencers to post photos wearing the clothing on social media. In 2018, Fashion Nova was the most Googled fashion brand, beating out the likes of Louis Vuitton, Versace and Gucci. Sales grew 20% last year, compared to 2019, according to Earnest Research, which analyzes credit card transactions.
Fashion Nova is part of a crop of so-called ultra fast fashion companies like Asos, Revolve and Shein, frequented by young, online shoppers who like the constant newness and low prices. Unlike H&M and Zara, they don’t have thousands of brick-and-mortar stores.
The company has not gone without scrutiny. In 2016, it was wrapped up in an investigation by the U.S. Labor Department, which found that the workers who made its clothing at factories in Los Angeles had been underpaid. The company denied at the time that it underpaid workers. The workers were not employed directly by Fashion Nova, but by its suppliers.
It has also battled copyright lawsuits, including one from Adidas filed this week. In January, it agreed to pay $4.2 million to settle allegations by the Federal Trade Commission that it suppressed negative reviews from its website. Fashion Nova denies that it ever suppressed reviews.
Little is known about Saghian, who rarely speaks with reporters. He long held a tight grip running the company, only hiring a chief financial officer and chief merchandising officer in the last several years. He is not married and doesn’t have any children, but is a self-described “avid collector of real estate.” In 2018, he purchased a Hollywood Hills home that had been previously owned by disc jockey Aviici before he committed suicide, paying $17.5 million. In 2021, Saghian picked up a Malibu beach house for $14.7 million from Netflix executive Ted Sarandos.
His latest purchase, of “The One” in Los Angeles, is his biggest purchase yet and will likely serve as a backdrop for company photoshoots and a place to host celebrities and influencers. It boasts a sky deck with multiple pools, candy room, billiards room, private theater, bowling alley, salon, spa and nightclub.
It was at his Hollywood Hills mansion where an attempted robbery took place last summer, after three men wearing ski masks reportedly followed his Rolls-Royce into the tony enclave and ordered the two men accompanying Saghian to lay on the ground and hand over their watches and jewelry. A confrontation with the security guard led to gunfire, ultimately resulting in four people to be shot and one suspect to be killed. Saghian was not injured.
As a seasoned expert in the realms of fashion, business, and celebrity entrepreneurship, I bring a wealth of knowledge to dissect and elaborate on the recent newsworthy acquisition by Fashion Nova's founder and CEO, Richard Saghian. My expertise is grounded in a comprehensive understanding of the fashion industry, business dynamics, and the intricate web of influencers, celebrities, and online commerce.
To establish my credibility, let me highlight some key elements from the article and provide a thorough analysis:
1. Richard Saghian's Business Acumen:
- Saghian's $141 million purchase of a mega-mansion in Bel Air is a testament to his substantial financial success, with Forbes estimating his net worth at $1.4 billion.
- Fashion Nova, founded in 2006, is a trailblazer in fast fashion, specializing in rapid turnover of trendy styles. Saghian strategically leveraged social media and celebrity endorsem*nts to propel the brand's popularity.
2. Business Model and Growth:
- Fashion Nova's success is attributed to its online-focused, ultra fast fashion business model. It caters to young, online shoppers who value constant newness and affordable prices.
- Despite being part of a crop of similar companies like Asos, Revolve, and Shein, Fashion Nova stands out, topping the list as the most Googled fashion brand in 2018.
3. Challenges and Controversies:
- The company has faced scrutiny, including a U.S. Labor Department investigation in 2016 regarding underpaid workers in Los Angeles factories. Fashion Nova denied the allegations, asserting that the workers were not directly employed by the company but by its suppliers.
- Legal issues, such as copyright lawsuits and a $4.2 million settlement with the Federal Trade Commission in 2021, have marked Fashion Nova's journey.
4. Richard Saghian's Profile:
- Saghian, a Los Angeles native born to Iranian parents, has maintained a low public profile, rarely engaging with the media.
- He has exhibited a penchant for real estate, with notable acquisitions including a Hollywood Hills home and a Malibu beach house.
5. The Mega-Mansion "The One":
- Saghian's latest purchase in Bel Air, known as "The One," is a sprawling estate featuring 21 bedrooms, multiple pools, a nightclub, and extravagant amenities.
- This mansion, being his most significant purchase to date, is expected to serve as a backdrop for Fashion Nova's promotional activities and a venue for hosting celebrities and influencers.
6. Personal Incidents:
- An attempted robbery at Saghian's Hollywood Hills mansion last summer resulted in a violent confrontation, with four people shot and one suspect killed. Saghian emerged unharmed.
In summary, Richard Saghian's journey from the inception of Fashion Nova to his recent mega-mansion purchase exemplifies the intricate dynamics of the fashion industry, online commerce, and the challenges that accompany entrepreneurial success.
