MadaLuxe Group, a distributor of luxury fashion, has launched an investment arm led by the group’s cofounder, Sandy Sholl.
The division, called SLS Journey, will focus on “high-potential emerging companies at the intersection of wellness, beauty, fashion and technology that align with MadaLuxe Group’s vision in the luxury sector,” said Sholl, the managing partner of SLS Journey.
SLS Journey’s initial investment is in Psykhe, a U.K.-based e-commerce platform that uses artificial intelligence to make product recommendations and drive personalization. SLS Journey invested $1.4 million in Psykhe, becoming the largest single stakeholder in the company. Psykhe has gathered $1.7 million in seed money.
“As MadaLuxe Group continues to grow, we have identified companies with powerful and innovative technologies that have the ability to profoundly change their industries,” Sholl said in an interview Wednesday.
“Because of the current disruptions in the market, many of these companies aren’t getting the attention they deserve. We see this as a tremendous opportunity and have decided to launch an investment arm of our business to ensure that high-potential start-ups have the resources and guidance they need to grow and succeed.”
Asked what the criteria for investment is, Sholl told WWD, “We want to stay true to anything luxury but wellness and health can be luxury. Tech that is evolutionary is also luxury. Tech is just advancing almost 100 times its normal pace. We see all this creativity coming to the forefront. MadaLuxe has the ability to come up with funding and be a strategic partner in luxury, and an incubator. We can bring a lot of value to founders and can help them scale their businesses efficiently.”
At SLS Journey, “We have no outside investors at this time, but in the future we would be open to it,” said Sholl.
Entrepreneur Carmen Busquets, whose previous investments in the fashion-tech space include Net-a-porter, Lyst, Moda Operandi and Farfetch, is a founding investor in Psykhe.
Psykhe is an e-commerce platform that uses AI to make product recommendations based on a consumer’s personality profile. Clients include Moda Operandi, Mytheresa, LuisaViaRoma, 24S and 11 Honoré.
Anabel Maldonado, who has a background in fashion and neuropsychology, is chief executive officer and founder of Psykhe, whose patent-pending technology enables consumers to shop by personality, determined by their scores on the “Big Five” personality test measuring openness, conscientiousness, extroversion, agreeableness and neuroticism. An aggregator powered by machine learning, Psykhe pulls in product from brands and retailers so shoppers receive personalized feeds and continuously refines recommendations.
“Clothes have qualities that we seek out for psychological payoff and that we connect with based on who we are,” said Maldonado, in a statement. “It’s why one outfit makes us feel electric and why another feels wrong, why we wear certain pieces over and over again, and others just sit in our closet. The real pain point is our struggle to drown out the noise and understand what aesthetic is truly in alignment with us, which is the problem we will solve through personalizing by personality.”
Psykhe’s particular technology, Sholl said, “establishes the anchor of your personality, the core soul, that with data makes recommendations on fashion that fits your personality. We are getting into the psychology of every customer and building upon the history of what they bought. That’s how the AI works. Especially in luxury, it’s very important to know the psyche of how everybody thinks. This is about curation. People are tired of seeing 1,000 items.”
Sholl already has “major expansion” plans for Psykhe to take it beyond women’s fashion. Men’s wear is first on the agenda, possibly followed by homes, autos and boats. In addition, Sholl plans to open Psykhe offices in New York and Los Angeles, where MadaLuxe has offices.
The 10-year-old MadaLuxe is a family-run company that distributes luxury goods to off-pricers, luxury timepieces to regular-priced retailers and operates its own high-end off-price stores and web sites. This year it added personal protective equipment to its unorthodox business model, and has been tapping its network of factories to source and produce face masks, gowns and hand sanitizer for doctors, hospitals and health organizations around the U.S.