When fast-fashion retailer Fashion Nova was looking for a new headquarters, the pull of Beverly Hills was strong.
The city is one of the world’s luxury capitals, its palm-lined streets home to billionaires, Hollywood stars and luxury brands like Gucci and Dior. Compared with Fashion Nova’s current headquarters in Vernon, a strip of industrialized land southeast of downtown Los Angeles, the glitz of Beverly Hills offered the upgrade founder and CEO Richard Saghian wanted.
“Almost all of our celebrity partners, influencers, our employees, suppliers, they all live and work in Beverly Hills,” Saghian said. “Plus, it’s close to where I live and I think it’s great for the brand.”
This month, the 43-year-old billionaire closed a deal for a contemporary office building on the edge of the city’s “golden triangle” of real estate. He paid $118 million in cash for the property at 407 N. Maple Drive.
Fashion Nova's new headquarters in Beverly Hills.
(Michael Allen Creative/Fashion Nova)
Celebrities like Cardi B and Megan Thee Stallion have helped boost Fashion Nova's appeal, as the company has produced trendy, low-cost clothing that offers women a way to take advantage of the latest fashion trends at a fraction of the cost of luxury brands.
Founded in 2006, Fashion Nova pioneered the use of influencer marketing. As it cements its place in an exclusive Beverly Hills neighborhood, the brand continues to rely heavily on social media and star power.
In the cutthroat world of fast fashion, the stakes are high as competition with other industry players intensifies, particularly with Shein, a Singapore-based giant that is increasing its presence in the United States and launching new garments at a rapid pace. Shein also has operations in Los Angeles.
Neil Saunders, chief executive of data analytics and consulting firm GlobalData Retail, said Fashion Nova will need to find ways to keep pace with Shein, which has “just really picked up the pace and is very cheap.”
“That has definitely taken some market share and spending away from some of the more traditional and established players.”
The fast-fashion industry has been crowded with retailers such as H&M, ASOS, PrettyLittleThing and Forever 21 competing for sales that have stagnated as shoppers have cut back on spending amid high inflation. Listed companies such as H&M and ASOS have seen sales fall this year.
“There’s no doubt the market has become a little more challenging,” Saunders said. “People have slightly reduced the amount of stuff they buy because of the pressures on their budgets.”
Privately held Fashion Nova has annual sales of about $2 billion and 40 million social media followers, according to a news release about the new office space.
Over the years, the fast fashion industry has also faced concerns about sustainability and cheap labor. Still, for many consumers, price and style are what matter most, Saunders said. Since consumers buy from multiple brands, there is room for more than one retailer to dominate, she said.
Fashion Nova’s new office space is one of the ways the brand is strengthening its relationship with celebrities and influencers in Los Angeles. The company plans to open an invitation-only Nova Social Club (where creators, influencers, celebrities, and VIP guests can collaborate) and a Nova Founders Lab to help emerging brands, designers, creatives, and founders.
“If there's a celebrity who wants to, for example, start a brand, we can partner,” Saghian said.
The 175,000-square-foot building, acquired from developer Tishman Speyer, features an atrium with a sky bridge, a sundeck, Zen-style gardens and an outdoor terrace. The retailer plans to add a fitness studio, a wellness spa, a micro-treatment beauty bar and other amenities.
Fashion Nova's new headquarters for its 500-plus employees is set to open later this year. While remote work is becoming more popular, Saghian said interacting in the office is key to the brand's success and growth.
A few years ago, properties in the Beverly Hills area were selling for nearly double that price, Saghian said. The office building on Maple Drive was not for sale, but Saghian said he made a compelling cash offer.
According to CoStar data, the purchase is one of the most expensive office transactions this year in Beverly Hills. Offices in that area typically sell for $344 a square foot; Saghian paid about $674 a square foot for the building. In 2005, Tishman Speyer paid more than $70.7 million for the building, so the purchase price represents a sales premium of nearly 67%. The city's office vacancy rate is 16.1 percent, above the national average of 13.8 percent.
Saunders said it's a smart move for a brand like Fashion Nova to base its headquarters in the heart of fashion and style in California. Influencer marketing is just one part of what draws people to buy clothes.
“Consumers will look to influencers and take cues from their ideas, but the products have to be good, the designs have to be good and the prices have to be right,” Saunders said.
Fashion Nova has five brick-and-mortar stores in Southern California, including ones at the Shops at Montebello and Northridge Mall. The brand has embraced the rise of e-commerce, launching its online store in 2013 and releasing a shopping app.
The company is not done growing. The brand plans to expand to other cities, including London, Hong Kong, Sydney and New York.
Saghian has acquired other luxury real estate properties in Los Angeles. In 2022, he purchased the mega-mansion “The One” for $141 million.
“I’ve always looked at real estate as a long-term, generational investment, and I think it’s a great place to invest,” he said. “And why not buy when the market is down?”
Times staff writer Roger Vincent contributed to this report.
