Shoedazzle raises $6M in midst of CEO swap-out

The company has scrapped its subscription model and added more members, but will it make more money?

Just one week after swapping out CEOs, Santa Monica-based shoe-shopping site Shoedazzle has raised another $6 million in debt and equity financing, according to an SEC filing.  The company has not responded to inquiries from VatorNews as to who the investors are, but Shoedazzle has previously raised $60 million from Polaris Venture Partners, Crosscut Ventures, Lightspeed Venture Partners, and Andreessen Horowitz.

The funding comes at an interesting time for Shoedazzle, which scrapped its subscription model earlier this year in favor of a boutique-style shopping experience.  I have to agree with Sarah Lacy on this—it strikes me as the equivalent of Shoedazzle telling me, “madame, you are too kind, but we do not want your guaranteed monthly payment, preferring instead to get less money some of the time.”  In effect, Shoedazzle is no longer competing with other innovative subscription services like JustFab, but with your local Famous Footwear.

Is that why Shoedazzle is now playing Musical CEOs?  Last week, the company swapped out Bill Strauss, who came on board last fall, in favor of founder Brian Lee—who is also CEO of The Honest Company.  Lee, a serial entrepreneur, founded LegalZoom before moving onto Shoedazzle in 2008.  He was later approached by Jessica Alba to run The Honest Company, but Lee says that Honest.com COO Sean Kane will be stepping up to help run the company.

Shoedazzle reported in August that it now has 13 million members, adding three million members in the four months since it dropped its subscription policy.  The company may have more members now that it’s dropped its subscription service, but I’d be more interested to find out how its revenue has been impacted by the switch.  It may have had three million fewer members at the beginning of the year, but the 10 million it did have were a powerful bunch, as they were automatically being charged $39 a month, regardless of whether or not they bought any shoes (at which point their payment turned into store credit).

The site may have more members, but who’s to say those members aren’t signing up and buying one pair of $30 shoes for their high school reunion and then never visiting the site again?  Shoedazzle hasn’t revealed its customer return rate, so I remain an intractable skeptic.

But then again, I majored in English, not Business, so maybe Shoedazzle will prove me wrong.