It was the 2013 Met Ball where everything started to go wrong. The first Monday in May was to be the moment when the buzzy, three-year-old fashion start-up Moda Operandi would step out and become a Major Player in style and e-commerce. At least, that was the vision of its chief brand officer, lissome, ice-cold socialite and former Vogue editor Lauren Santo Domingo (“L.S.D.” to her friends), who was determined to serve as Anna Wintour’s co-chair, along with Rooney Mara and then Givenchy designer Riccardo Tisci.

There was only one problem: Moda Operandi wasn’t flush with cash. Like many Anna Wintour–related opportunities, Santo Domingo’s coveted co-chair role came at a steep price. In this case, $4.5 million, a fee that was shared with Samsung and amounted to a big chunk of the $36 million in funding that the company had just received. Inside the firm, a fierce debate erupted: wasn’t this a waste of money? For a start-up, there were much wiser—and more urgent—expenditures. Santo Domingo dug in her heels. “Do you know what it took me to be able to get you guys the chance to sponsor this?” she told the executive team, alluding to her Wintour ties. “You can’t just walk away!”

In the end, the executive team caved, and the results proved even more disappointing than they’d feared. There was virtually zero return on investment: traffic and sales were flat, according to a former executive. But internally there was a huge impact. For months, Santo Domingo, the chief brand officer, had clashed with the firm’s C.E.O., Aslaug Magnusdottir, about spending priorities and best practices. The Met Ball mess may have brought it all to a head—and soon after, Magnusdottir was gone.

Style over Substance

That was seven years ago. Yes, Moda Operandi is still around. But right now it’s a skeletal shadow of the cooler-than-thou self it once styled itself as; a company that would disrupt the fashion and retail industries, creating a new business model where hyper-wealthy women and Hollywood stars could order from-the-runway pieces before anyone else. At the same time, Moda believed it would stick it to such e-commerce powerhouses as Farfetch and Net-a-Porter.

Sorcerer’s apprentice? Santo Domingo and Anna Wintour.

That was the image. Then there’s the reality. Last year, seeking some heat, Moda curiously “relaunched” itself with a party at the $18.5 million Gramercy Park town house Santo Domingo shares with her husband, Andres Santo Domingo. Fashion types like Mary Kate Olsen showed up, but overall the evening had little tangible effect, and sales have continued to be sluggish. Since launching a decade ago, the company has burned through much of a reported $345 million dollars of venture-capital money (including $21.6 million from Conde Nast/Advance Publications and LVMH together, in December 2013); in the process, it has managed to dilute its valuation, seeing it drop from a peak of $650 million at Series F to an estimated value as low as $430 million now.

The most recent chunk of that $345 million was secured earlier this year: $100 million in equity and debt financing through V.C. firms, as well as from Andres’s family—he’s the heir to Colombia’s richest beer dynasty, with a fortune estimated at $3.2 billion. But there are whispers in New York now that the money spigots have dried up and the company is quietly shopping itself, essentially “for parts,” as the V.C. gods like to say. If it were to happen, it would be a most spectacular dive. Yet, looking back, it’s easy to see it was a meltdown waiting to happen, one that began in a style mismatch of the co-founders.

For years, the now 44-year-old Santo Domingo, whom some think of as a 21st-century Babe Paley, has been a woman wreathed in fragrant, slightly apocryphal-sounding stories. (Back in the early aughts, a rumor circulated that she was the heiress to the Poland Spring fortune—even though her father was an executive for the company.) As well as quirky desires: Santo Domingo liked having walls in the Hudson Street offices—as seen in Architectural Digest, for example—painted blush pink. (Just as the Duchess of Windsor liked her walls to be colored, to better flatter her skin tone.)

In other words, when it comes to one’s story, Santo Domingo knows the value of good color. Especially where Moda is concerned. In interviews, she’s rattled off various versions of how the concept emerged. She told one interviewer that it was a Prada dress she saw on the runway that sparked the idea; unable to find it in-store, as it had never been produced, she was inspired to create a “pre-tailer,” Moda, where wealthy women could buy clothes directly from the runway. In another conversation, she said the idea came to her when she and her fellow Voguettes noticed that starlets in the front row always seemed to be wearing things no one else could obtain. Why couldn’t less famous (but wealthier) women access the same design?

There’s only one problem: the truth is a little less glam. It’s also heavily airbrushed. Moda Operandi was, in fact, Magnusdottir’s brainchild. A Fulbright scholar, native of Iceland, and McKinsey alumna, she had been working at Gilt Noir—an elite tier of the online fashion discounter and investment darling, Gilt—when, a decade ago, she started to think of other businesses. Among these, Magnusdottir was mulling a start-up that would re-invent trunk shows for the digital era, connecting customers across the world to designers to pre-buy clothes being worn at fashion shows.

Werk. Werk. Werk. Santo Domingo, right, and Aslaug Magnusdottir at Moda Operandi’s offices, in 2011.

Meeting Santo Domingo via Gilt Groupe, Magnusdottir savvily recognized that the socialite’s profile and connections would be a valuable public-facing asset for her start-up—and indeed, according to The Telegraph, the 1,000-strong invitation list from Santo Domingo’s 2008 wedding informed Moda’s first mailer. So Magnusdottir offered the title of co-founder and creative director to Santo Domingo and took the role of C.E.O. for herself. (Moda Operandi did not make Santo Domingo or any other executive available for an interview for this story.)

Magnusdottir’s business instincts proved solid, on all fronts. When Moda Operandi launched in February 2011 with a showcase for Alexander Wang, it earned instant cachet. It operated on a shoestring budget, having secured seed money from friends and family—including a check from Santo Domingo’s mother—that rolled into a Series A funding round of $1 million or so. Moda’s small team began working from a cluttered, dusty office in the Flatiron district, slowly adding more of Santo Domingo’s fellow front-row (and likely high-priced) fixtures, including Bergdorf Goodman alumna Roopal Patel, fashion editor Taylor Tomasi Hill, and Ashley Bryan, the daughter of Anna Wintour’s then partner, poached from Net-a-Porter. (Curiously, the ghost of Net-a-Porter looms large over Moda. Tony Florence, the general partner of venture-capital firm NEA, who steered the earlier $36 million round, was said to be obsessed with the luxury retailer. He’d planned to invest in it until Richemont snapped it up.)

But despite such high-profile hires and big-sum investments, the company seemed to struggle from the start. To justify its valuation, and better to mimic Net-a-Porter’s example, Moda shifted its business model and expanded beyond exclusive trunk shows. So, rather than acting as a high-end digital platform to connect buyers and designers, it took a step backward into operating like a brick-and-mortar retailer. It added a boutique, which meant it had to buy—and hold—inventory, which is the eternal drag on any retailer’s bottom line. It also made it less distinctive, less exclusive, and more a direct competitor to Farfetch. The image started to blur. And from the outset, image was everything to Lauren Santo Domingo.

The biggest problem, though, at least in some executives’ eyes, was Magnusdottir. “There was an element that Aslaug was a bit embarrassing … people were cutting her down for being quite tacky, that her aesthetic was so loud and over-the-top,” says one person who worked at Moda at the time, pausing to pick the words carefully.

Fashion is fun. Magnusdottir, second from left, and Santo Domingo, second from right, at New York Fashion Week, in 2011.

That tension drove Santo Domingo and Magnusdottir’s clash around the time of the Met Ball. Santo Domingo “wasn’t really interested until the Met Gala happened, then she tasted what was going on and she wanted to relegate Aslaug,” said a former executive.

“They both needed each other, then they both resented each other,” adds a former staffer. “There was a point where they never wanted to do any [media] together, and it became a press war as to who could get more stories.”

The office rapidly divided in half, with little communication between Team Lauren and Team Aslaug. For the business, it was unsustainable, and after a tussle with the board, Magnusdottir was managed out in May 2013. A serial entrepreneur, she has not commented publicly on the firm and has since founded Katla, which focuses on sustainable made-to-order women’s wear. Others soon followed her out the door, including Tomasi Hill, apparently after she had such a ferocious fight with Santo Domingo on a Paris work trip that she quit on the spot and paid for her own flight home.

Art and Commerce

With Magnusdottir gone, Santo Domingo was victorious. But now she faced another challenge: finding a new partner.

As Moda’s second C.E.O., that person was former LVMH executive Deborah Nicodemus, who had a deep background in luxury. In the hurricane that has been Moda’s last decade, Nicodemus’s era proved to be the quiet eye of the storm. Santo Domingo was so rarely in her office over this period that it was often used as a spare conference room. One former executive offers a theory: “Deborah didn’t like the limelight, so there was no competition there.” The company seemed to be stabilizing, and Nicodemus led it through yet another investment round in late 2017. Despite that success, Nicodemus exited not long afterward.

Santo Domingo and then C.E.O. Deborah Nicodemus attend the Moda Operandi launch in London, in September 2014.

The man who replaced her as C.E.O. No. 3 was an unlikely hire. Fortysomething Ganesh Srivats had most recently been a vice president of global sales at Tesla, although he had spent time at Burberry earlier in his career. He arrived in August 2018 and promptly told the company’s staffers that he intended for Moda to hold a public offering within two years. Quickly, he began stacking Moda’s upper ranks with former colleagues from Tesla, claiming he wanted to pivot the company to focus on data and technology in addition to posh frocks. He did poach Lisa Aiken to be the new head of women’s wear, though—she came from Net-a-Porter.

But even as Srivats splurged money on a raft of senior hires, the company’s day-to-day business was fraying. Last year, Moda made the baffling choice to change warehouses, which affected the fulfillment of purchases in the fourth quarter, always retail’s busiest time. The changeover was fraught with problems and missing merchandise. One staffer involved with the decision scoffs that it was “the dumbest fucking thing you’ve ever heard.” Then there was the stylist at the firm’s New York mansion, or showroom, where V.I.P.’s could stop by for in-person shopping appointments. He was caught skimming tens of thousands of dollars off the company, the money used on everything from designer clothes to trips to Paris. “This guy was a complete scammer, but nobody was watching,” recalls one staffer who worked at Moda when the fraud was uncovered. (The firm’s generous designer discount is repeatedly cited as one reason that staffers have lingered longer in their roles than they might otherwise have done. No wonder that a departed executive dispatched an employee to buy tens of thousands of dollars’ worth of merchandise on their behalf, using that steep discount.)

Inside the Tribeca offices, employees struggled, too. “The image Moda portrays—that plush pink-and-velvet façade—shattered very quickly for me when I started,” recalls one employee. “Like, the cockroaches in the bathrooms, multiple times, that they never dealt with.” The company dabbled in men’s wear before Srivats arrived, but it was he who championed an aggressive move into the market. As the company expanded into men’s wear under Srivats, it was keen to modify its branding, reportedly ditching the blush pink that was both its signature and a favorite of Santo Domingo’s. Yet again, it seems, Santo Domingo and the company’s C.E.O.—its third and, this time, one she helped select—were at loggerheads.

No, really: fashion is fun! Sofia Carson, Santo Domingo, and Amber Heard at the Giambattista Valli show in Paris, in March 2019.

Certainly, Moda’s culture seems to be a throwback to an era of fashion which was more The Devil Wears Prada than diversity and inclusion. Spat-prone, for sure, but the problems are reportedly much deeper. Several staffers are squeamish in discussing a married male colleague who sent inappropriate social-media messages to young women working in the office. A number of Srivats’s high-profile hires have also enjoyed brief tenures at the firm, including the hard-charging Puja Clarke, another Tesla vet, who arrived soon after him. She was gone within months.

Nor has Lisa Aiken endeared herself to many colleagues. Her chilly dynamic with Santo Domingo is well known. Both glamorous blondes, their personal picks of the merchandise are spotlighted on the site. One staffer recalls Santo Domingo insisting that Aiken’s picks should be budget-conscious, as her fan base was more mass-market.

Most challenging, though, are the stories from staffers of color. One staffer who is Black found her tenure at Moda especially grueling. “I felt so triggered on my first day—having to hold my tongue, not wear my hair curly—that I called a suicide hotline that evening,” she says.

Andres and Lauren Santo Domingo at the Met Gala after-party, in 2014.

When an editor suggested headlining a story featuring a photograph of Jennifer Lopez in her notorious Versace dress “Jungle Fever,” without irony, it required colleagues to point out how and why that was inappropriate. Seeing front-row photos accompanying other stories, a white staff member remembers pointing out the dearth of people of color. “I was just told, ‘Oh well, not many people of color attend fashion shows.’” Perhaps such blasé insensitivity shouldn’t be surprising: two years ago, Moda was slammed for an Instagram post of a dress much like the Gucci piece once worn by Melania Trump. The caption? “Grab them by the pussybow.”

“There is a zero tolerance policy against racism, discrimination and harassment at Moda Operandi,” according to a company spokesperson. “We are committed to creating a safe and equitable work environment for all employees, and strive to cultivate a culture that enforces anti-racism, celebrates diversity and practices empathy.”

What’s Next?

This past year has been particularly gruesome for many companies, but especially for Moda Operandi. Even as some luxury sales boomed during the pandemic, the company enforced widespread layoffs. There was also the shuttering of its roughly two-year-old foray into men’s wear; then, in September, more than 40 models sued for unauthorized use of their images to sell clothes. In addition, there’s the problem with investors—Advance Publications, for instance. It was initially believed Advance’s stake in Moda Operandi would give the company a way to monetize the fashion in Condé Nast’s magazine pages. For reasons that are still unclear, that potential has not materialized.

Still, somehow Moda Operandi soldiers on, though one insider familiar with the infusion of cash earlier this year suggests that a significant portion came from Santo Domingo’s billionaire husband, who operates a venture-capital arm. “There’s a pattern here: the company raises a chunk of money, and then everyone other than Lauren gets fired,” notes one former staffer. Ten months after that last round, Srivats must still be planning for that I.P.O. He remains in place—at least for now. As does Santo Domingo. But as anyone who works in fashion knows, tastes and fortunes change with a swiftness that can be all too cruel.

Mark Ellwood is a New York–based writer