This has been an area of extreme caution in the past 5 years but seems specialized retailers with a social networking spin are back on track convincing VCs as Tornado Insider reports:

dress-for-less, a German online designer fashion outlet, received an investment from Palamon Capital Partners. dress-for-less.com specializes in fashionable, reasonably priced designer and branded goods. The company buys its items from overproduction, remains and end-of-season stock. The product range comprises approximately 4,000 items. The funds will be used to expand the company further in Germany and the rest of Europe, improve customer service and build corporate brand awareness.

BeCheeky.com, a UK-based online fashion retailer, raised its first round of funding from the YFM Group-managed South West Ventures Fund, online retail entrepreneur Quentin Griffiths, Colin Black and Mark Blandford. BeCheeky.com specializes in lingerie, swimwear, accessories and fragrance. The company has developed a model for efficient online retailing whereby it leverages technology to avoid complicated or costly processes. This allows it to sell at competitive prices to their customers. The company is using the funds to move to larger premises, relaunch its website and expand its offering.

Latest in line was Private Sale, a German operator of a 'special offers' web shop called brands4friends, The company raised €5 million from Mangrove Capital Partners and private investors. brands4friends is an online shop selling remainders of brand name goods from the fashion industry. It does this via a series of sales auctions. The service is a virtual factory outlet with no permanent product range but rather offering a selection of goods that changes every 4 to 5 days. The offering is delivered as themes or as individual products. The shopping community can only be accessed upon invitation from registered members - another international trend among e-tailers.

Another venture in this area is buyvip.com which recently raised funds from 3i, EFF and ACP.

BuyVIP is an exclusive closed community, which members join exclusively by personal referral. Limited stocks of famous brand lifestyle and fashion products are offered at discounted prices through fixed period sales campaigns.

The business, founded in Madrid in 2006, launched its German website in the same year and most recently established its Italian offering in early 2007. BuyVIP has become the leading pan-European e-commerce community, having attracted 500,000 members to date with impressive growth of 70,000 members and over 40 campaigns each month. Its campaigns offer luxury branded products from Joop, DKNY, Apple, Alessi, Mandarina Duck, Nike, Puma and Columbia and many others.

Let's hope the model catches on...