Want to own some Juicy Couture? Not a handbag or a velour hoodie, but shares of stock, in three clicks on Facebook? Parent Fifth & Pacific Companies, owner of Juicy, Kate Spade, Jack Spade and Lucky Brand, is going to give consumers the chance.
On Wednesday the company is the first to launch a customer-stock-ownership plan with startup Loyal3 that will allow consumers to buy fractions of shares in $10 increments and then share that transaction on Facebook.
Fifth & Pacific CEO William McComb said he sees the stock-ownership plan as fertile ground in brand-building, loyalty programs and customer-relationship management. "We look at this as yet another way to be closer to and be more intimate with the people that love us the most and are our best customers," Mr. McComb said in an interview.
Loyal3, backed by former Facebook chief privacy officer and onetime candidate for California attorney general Chris Kelly, has built a technology platform to allow brands to sell stock to consumers. The idea is to create a class of consumer-shareholders who will have an incentive to spread the word about the brand -- what CEO Barry Schneider has called "the ultimate 'like' button."
"The truth is people care more about things that they own than things that they don't," Mr. Schneider said at Ad Age Digital in April.
Messrs. Schneider and Kelly have spent three years building the technology and getting the Securities and Exchange Commission's blessing for the service. They've also been recruiting brands to give it a try and finally found one willing to be the guinea pig.
The company formerly known as Liz Claiborne Inc. changed its name to Fifth & Pacific earlier this month after selling off that brand as well as Monet to JC Penney. CEO William McComb said goal isn't for consumers to know, or care, about Fifth & Pacific -- rather, they should know brands such as Kate Spade and Lucky Brand.
Starting Wednesday, consumers will be able to buy real shares of stock in Fifth & Pacific through the Facebook pages and e-commerce sites connected to those brands. Though the fine print says they're buying Fifth & Pacific, the experience will be very much like buying a piece of , well, Juicy Couture.
"We have one message to the consumer, and that is our brands, not the parent company name," Mr. McComb said. "While there is no way to become an owner of Kate Spade, that is what we're going for here."
The added bonus for Fifth & Pacific is that brand managers can then communicate directly and regularly with those consumer-shareholders on new store openings, sales and other events.
For Loyal3, its first customer comes a year after the company's formal launch and three years since it began building the underlying technology, which allows for the sale of stock with no fees. Consumers will receive a monthly statement by email, and have the ability to check the value of their holdings through Loyal3.
Loyal3 has also built the capability to handle a "social IPO," though no takers for that service, yet.
But it comes with some risk. As Facebook's IPO reminded the world earlier this week, stock performance can be disappointing and doesn't necessarily track with consumers' love for a service or brand. But Mr. McComb said that challenge is no different than the other brand challenges Fifth & Pacific faces. "Every day we have the opportunity to delight and disappoint," he said.
