Since the 68-year-old Dressbarn brand has no stores, it’s relying on Santa Monica-based Happy Returns’ network of some 500 drop-off locations to accept returns and provide immediate refunds.
The partnership is helping solidify Happy Returns’ role in the changing retail ecosystem.
While the company’s software seamlessly works with Dressbarn’s website to process the returns, Happy Returns relies on workers at Cost Plus Inc., Paper Source and those manning concierge desks at Simon Property Group Inc.’s malls to accept the merchandise and send it in bulk to the company’s warehouses.
Dressbarn saves money on shipping costs while brick-and-mortar retailers — who provide the service free of charge to Happy Returns — benefit from walk-in traffic.
“The idea is that everybody wins,” said Chief Executive David Sobie. “Cost Plus gets (a customer) walking in the door, and hopefully while she’s there, she’s going to look around the store and maybe buy something.
“And then for Dressbarn, it’s about eliminating the hassle and the wait that the shoppers have with returning by mail. You don’t have to print a label, you don’t have to box it up, you don’t have to wait for three weeks (for refund), checking your credit card statement,” Sobie added.
The account is not Happy Returns’ biggest, but it’s part of a growing trend in which struggling brands are reinventing themselves as etailers while the pandemic eats away at brick-and-mortar’s share of overall sales.
Florida-based Retail Ecommerce Ventures, which acquired Dressbarn’s intellectual property during its bankruptcy sale last year, also picked up Pier 1 Imports Inc. and Modell’s Sporting Goods under similar terms.
Happy Returns is not serving those brands, but Sobie said his team “intends on doing a great job” and is “looking forward to a long partnership with (Retail Ecommerce Ventures).”
“The simple equation is, the more ecommerce there is, the more returns, and so from that standpoint, we’re in a growth part of the growth industry,” he added.
Happy Returns, founded in 2015, provides reverse logistics services to about 100 retailers, including Revolve Group Inc. in Cerritos, and Everlane Inc. in San Francisco.
Happy Returns has 50 employees at the Santa Monica headquarters who comprise management, marketing, engineering and sales teams. Another 50 process returns at its warehouses in Van Nuys and in Blandon, Pa.
Pandemic-related shutdowns halted Happy Returns’ operations in April and May, but since then, business has ramped up.
“We definitely saw pent-up demand for returns when we started reopening and we’re expecting this fall into holidays to be a very busy time,” Sobie said. “My hope is that people shop earlier because there’s just so much demand for shipping services right now, far beyond the capacity. … I think it’s just going to take longer for people to get things, and there’s going to be a lot more people shopping online.”
The company has raised about $25 million to date, including a $11 million investment led by PayPal Holdings Inc. last year. Sobie declined to disclose the company’s revenue and was not sure what investors’ eventual exit might look like. But he was crystal clear on his vision for Happy Returns’ future.
“I think a lot about how much Amazon Prime has changed the landscape for ecommerce and how much that little Amazon logo means when people are shopping,” he said
“We would like to be equal to Amazon Prime for returns, where seeing the Happy Returns logo and knowing that you can return it with us gives you the confidence to buy the same way that that Amazon Prime gives you the confidence to buy. What it means practically is lots more return locations, many more retailers that we work with, more Dressbarns in the future,” Sobie added.
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