Instagram Ready: (From left) Michael Mente, Revolve co-founder and co-CEO; Raissa Gerona, chief brand officer; and Mike Karanikolas, co-founder and co-CEO.

Instagram Ready: (From left) Michael Mente, Revolve co-founder and co-CEO; Raissa Gerona, chief brand officer; and Mike Karanikolas, co-founder and co-CEO.

Online fashion retailer Revolve proved a hit on Wall Street in its June 7 debut on the New York Stock Exchange where it raised $211.7 million in an initial public offering.

Shares of the millenial- and generation Z-focused brand opened at $25.16, nearly 40% above the $18 price the company set for the initial public offering. At close of market June 7, shares for the ecommerce company were trading nearly 90% above the offering price at $34 even as investors have grown wary of the traditional brick-and-mortar retail apparel industry.

Three other ecommerce companies have gone public in the U.S. this year, raising a combined $471 million, according to Bloomberg.

Cerritos-based Revolve relies on social media stars to help sell its product. Last year profits grew to $30.6 million, up from $5.3 million the previous year. But the company could face some rough waters ahead. It depends on Chinese manufacturers for much of its apparel and the threat of a 25% tariff could force it to raise prices.

The 16-year-old company’s reliance on social media marketing and sales could also pose a problem, as influencers are increasingly under federal scrutiny by regulators demanding they disclose relationships with brands. Those regulatory pressures could hurt their business model, analysts said.

Manufacturing, retail and trade reporter Rachel Uranga can be reached at ruranga@labusinessjournal.com or (323) 556-8351. Follow her on Twitter @racheluranga

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