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Gordon & Smith "Upscale Contemporary Lifestyle Apparel"
 

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    Gordon & Smith "Upscale Contemporary Lifestyle Apparel"  Gordon & Smith "Upscale Contemporary Lifestyle Apparel" Presentation Transcript

    • Gordon  and  Smith  Lifestyle  Brand          To  update  Gordon  and  Smith  from  a  historic  surf,  skateboard  and  snowboard  provider  to  a  brand  known  for  a  California  lifestyle  with  upscale  clothing  and  accessories  mirroring  our  individuality  and  showing  our  inner  rebel  by  providing  aspira?onal  fashion  and  accessories.    
    • The  Missing  Brand…  
    • What  is  ‘California  Lifestyle’  California  is  abundant  with  larger-­‐than-­‐life  characters   •  California  is  known  for  a  laid  back,  casual,  but  and  none  of  them  are  followers.  From  the  media  and   sophis?cated  style.      entertainment  industry  to  Silicon  Valley  these  non-­‐ •  California  has  many  cultures  from  the  Rocky  conforming  entrepreneurs  are  the  leaders  we  aspire   Mountains  to  the  Sandy  Beaches  to  the  hot  to  emulate.  Their  Fashion  is  typical  of  their  life  as  you   deserts,  but  is  s?ll  seen,  interna?onally  as  the  will  find  these  people  in  the  Board  Room  trading   state  of  beach  lifestyle.    tradi?onal  suits  and  ?es  for  their  favorite  hoodie.   •  Laid-­‐back  and  comfortable  clothes  are  valued  Their  blatant  disregard  for  tradi?onal  is  a  statement   here,  even  for  business  to  dinner  even  church  to  who  they  are  as  a  person  -­‐  fiercely  independent   services  and  weddings.  and  striving  to  be  comfortable  in  their  own  skin.  East   •  The  California  Lifestyle  is  aspira?onal  and  trendy  Coast  preppy  meet  your  west  coast  rival  -­‐  A  forceful  type  "A"  personality  driven  to  perfec?on  but  outwardly  wan?ng  to  show  how  relaxed  they  feel.  Their  good  fortune  has  given  them  the  ability  to  dress  in  very  upscale,  couture  clothing.  We  admire  them  as  rugged  individualists  and  their  clothing  tells  their  story  of  non-­‐conformity.  They  sit  in  the  Board  Room  in  jeans  and  a  sport  jacket.  They  go  out  to  dinner  dressed  in  couture  casual  clothes.  
    • What  does  Upscale  California  look  like?  
    • An  Underserved  Market  •  Surveying  merchants  (buyers)  from  the  top  retailers,  everyone  one  of   them  stated  that  there  was  a  gap  in  the  market  for  an  upscale  California   brand…  all  expressed  an  interest  in  seeing  the  line  as  soon  as  possible.  •  Closest  Compe??on   –  Tommy  Bahama  ($725M  in  revenue)  offers  tropical  prints  in  silk  fabric.   –  Polo  Ralph  Lauren  is  east  coast  preppy.   –  Tommy  Hilfiger  ($5.6B  in  revenue  worldwide)  is  the  “classic  American   cool”  and  “Preppy  with  a  twist”.   –  American  Apparel  sells  basics  ($533m  in  revenues).   –  Abercrombie  &  Fitch  ($3.5B  in  revenue)  is  rooted  in  the  great   outdoors  and  East  Coast  Ivy  League  geared  for  18  to  25  ages.  Hollister   targets  14  to  18  year  olds  focusing  on  the  surfing  lifestyle.  
    • The  Missing  Brand…  
    • High  Quality  /  Fashion   The  Compe??ve   Ermenegildo   Landscape   Zenga   Ralph  Lauren   Giorgio  Armani   Donna  Karan   Hugo  Boss   Calvin  Klein   Gordon  and  Smith   Tommy  Hilfiger   DKNY   Michael  Kors   Nau?ca   Tommy  Bahama   Liz  Claiborne   Lacoste   IZOD   Jones  NY  Low  Price   Van  Heusen   Polo   High  Price   Abercrombie   &  Fitch   Hollister   Polo  Rugby   American  Eagle   J  Crew   Ouhiiers   Guess   American   Apparel   Low  Quality  /  Fashion  
    •  Steeped  in  tradi?on  &  past  ?mes  of  the  California  lifestyle,  we  have  the  unique   opportunity  of  renewing  and  launching  an  apparel  line  based  upon  a  well-­‐known   brand  that  had  global  acclaim  during  the  late  1960’s  –  1990’s,  and     is  s?ll  widely  known  today.     ü  Demand  for  high  end  clothing  is  increasing  post  recession   ü  Low  compe??on  barrier  from  exis?ng  Brands  –  low  retail  switching   cost   ü  Low  start-­‐up  costs  –  inventory  and  EDI  inventory  capability   ü  Mul?-­‐channel  approach  to  retailing   ü  Underserved  market  
    • Our  red  label  is  targeted  to  a  broader  audience  and  will  be  the  prime  mainstay   of  our  product  line,  while  s?ll  maintaining  the  edge  in  providing  ?meless   fashion  with  high  quality  in  all  of  our  products.   The  Black  label  represents  the  premium  collec?on  of  our  California  lifestyle   apparel  and  the  aspira?ons  of  our  brand  iden?ty.  Few  companies  have  been  able  to  establish  a  long  las?ng  California  lifestyle  brand  that  encompasses  surfing,  skateboarding,  and  snowboarding  as  Gordon  and  Smith  has.  Established  in  1959,  Gordon  and  Smith  innovated  foam  core  surtoard  construc?on  and  opened  its  first  surf  shop  in  Pacific  Beach,  CA.  Gordon  and  Smith  later  popularized  the  first  screen  printed  surf  t-­‐shirts.  In  1964,  Gordon  and  Smith  entered  the  skateboard  world  with  FibreFlex,  making  a  massive  contribu?on  to  the  industry  and  crea?ng  the  #1  best  selling  skateboard  of  all  ?me,  world-­‐wide.    In  1987,  Gordon  and  Smith  began  making  and  selling  snowboards,  and  is  s?ll  known  today  as  a  premium  hi-­‐quality  brand.      In  2014,  our  plans  are  to  launch  an  apparel  line  that  complements  this  world-­‐wide  brand  that  eschews  the  ac?ve  California  Lifestyle.    
    • The  Gordon  and  Smith  Brand  is....  …  the  California  Lifestyle  clothing  brand  for  men  and  women  25  to  40.  We  create  the  clothing  that  reflects  who  they  really  are.  For  the  Gordon  Smith  “Guy”  and  “Gal”  the  sun  always  sets  over  the  ocean  in  the  west….just  like  it  always  has  in  California.  Grab  some  California,  grab  some  Gordon  Smith.    Our  Vision  -­‐  A  world  in  which  the  California  Lifestyle  and  sensibili?es  are  available  to  all.    Our  Mission  -­‐  Empowering  discerning  men/women  to  embrace  the  California  Lifestyle  in  their  ac?ons,  personal  preferences  and  personal  clothing  style.    Our  Business  Statement  -­‐  We  are  in  the  business  of  providing  clothing  designs  and  products  for  men  and  women,  embodying  the  best  of  the  California  Lifestyle  and  making  it  available  to  discerning  men/women……empowering  them  to  choose  the  Gordon  Smith  brand.    
    • Our  Target  Customer  •  Market:  Global    •  Lifestyle:  Gordon  &  Smith  is  focused  on  the  25  to  40  person  that  are   ac?ve,  energe?c  and  fit.    •  Personality:  Gordon  &  Smith  has  defined  its  brand  for  a  person  that  is   educated,  family  oriented,  with  a  rela?vely  ac?ve  lifestyle  and  fine  living.  •  Wants:  Pres?ge,  glamour,  luxury    •  Values:  Quality,  exclusivity,  style,  fine  living    •  Aspires  to  be:  Respected,  admired,  wealthy  and  worldly,  and   sophis?cated      
    • 2012  Apparel  Market  Size  •  USA  ready  to  wear  /  couture  apparel  sales  topped  $500B.   Globally,  apparel  revenues  top  $1080B  •  In  a  highly  compe??ve  and  diverse  market  there  is  no  leader  -­‐   The  largest  brands  report  revenues  in  the  range  of  $3B  -­‐  $6B,   Polo  Ralph  Lauren,  Liz  Claiborne,  Jones  Apparel  Group,   Tommy  Hilfiger  •  Levi  reported  sales  of  $4b  through  it’s  red  tab  (premium)  line,   Dockers  and  signature  (basics)  collec?on  •  High-­‐end  luxury  brands  are  the  first  in  2012  to  report  soaring   profits  –  Polo  Ralph  Lauren  with  $3.3B  and  LVMH  at  $8.7B  of   revenue  
    • 2012  Retailers  •  Apparel  is  sold  in  a  mul?-­‐channel  environment  mainly   through  retail  stores  and  online  channels.  •  Nordstrom  sells  through  117  stores,  facebook,  twiier,  an   online  website  and  has  commiied  $140m  in  capital   improvements  for  internet  sales  in  2012.  •  Saks  Fixh  Avenue  has  45  stores,  Neiman  Marcus  has  41   stores,  Bloomingdales  has  36  stores.  All  have  substan?al   internet  presence  and  some  feature  a  catalog  as  well.  •  Most  large  retailers  are  pouring  capital  into  internet   expansion  to  see  what  channels  drive  traffic  –  pinterest,   foursquare.  •  We  have  not  found  any  Retail  private  label  serving  the   California  upscale  lifestyle.  
    • Gordon  and  Smith  Marke?ng  Strategy    •  Retail  Stores  –  through  our  management  team,  we  have  numerous   rela?onships  with  mainstream  retail  stores  and  upscale  bou?ques  that   specifically  cater  to  our  target  market,  which  we  will  aggressively,  yet   selec?vely  establish.    •  E-­‐Commerce/Online  Sales  –  Online  requires  brand  recogni?on  and  we  will  be   offering  apparel  on  the  Gordon  and  Smith  website.  Ini?al  sales  will  be  from   organic  and  paid  search.  Our  team  has  deep  exper?se  in  crea?ng,  managing   and  marke?ng  online  apparel  ventures  with  mul?ple  successes  to  reference.    •  MulE-­‐Channel  –  through  selec?ve  list  management  we  intend  to  produce  a   clean,  simple  and  targeted  approach  thru  catalog,  affiliates,  web  adver?sing,   SEO,  f-­‐commerce,  m-­‐commerce  etc.  that  presents  our  apparel  in  a  highly   targeted  manner.  We  expect  this  will  further  enhance  sales,  will  help  to  drive   in-­‐store  and  online  traffic  to  our  apparel,  and  help  to  create  broader   recogni?on  of  our  California  lifestyle  designs  and  the  Gordon  and  Smith  brand   name.      
    • Gordon  and  Smith  Target  Retailers  The  stores  we  want  to  sell  through  will  be  the  premier  luxury  retailer  recognized  for  merchandise  leadership  and  superior  customer  service.  They  will  offer  the  finest  fashion  and  quality  products  in  an  excep?onal  environment.    •  Bloomingdales  •  Barneys  New  York  •  Saks  Fixh  Avenue  •  Nordstrom   ü  Nordstrom  carries  389  brands  •  Neiman  Marcus    •  Upscale  Contemporary   Bou?ques   –  Fred  Segal   ü  Amazon  announced  a  new  upscale  apparel  •  Amazon   offering  channel  in  2012  
    • Financial  Summary   Break  even  in  Q5   2013  and  2014  ProjecEons  by  Quarter   (July  2014)   $8,000,000     $7,000,000   $6,000,000   $5,000,000   $4,000,000   Revenue   $3,000,000   Expenses   $2,000,000   Profit  (Loss)   $1,000,000   $0  -­‐$1,000,000   Q1   Q2   Q3   Q4   Q5   Q6  -­‐$2,000,000   Opera?ng  profits   will  be  re-­‐invested   Annual  ProjecEons   to  accelerate   $70,000,000   growth   $60,000,000   $50,000,000   $40,000,000   Revenue   $30,000,000   Expenses   $20,000,000   Profit  (Loss)   $10,000,000   $0   2013  2014  2015  2016  2017  -­‐$10,000,000  
    • Financing  Considera?ons    $5,000,000  Growth  Equity  Financing:   –  Series  A  Preferred  (target  structure,  however  flexible  to  others  i.e.  conver?ble  debt)   –  Includes  outright  ownership  of  the  Gordon  and  Smith  Brand   –  Enables  design,  produc?on  and  launching  of  our  Spring  2014  line  by  the  end  of  calendar  2013  online   through  out  e-­‐commerce  website.   –  Ini?al  minimum  closing  targeted  by  July  30,  2013.      Use  of  Proceeds     –  $      200,000  Designs,  paierns,  and  prints   –  $      500,000  Brand  acquisi?ons   –  $      200,000  Website  and  e-­‐Commerce  systems  integra?on   –  $1,400,000  inventory  produc?on   –  $      350,000  Working  capital   –  $      200,000  Marke?ng  &  adver?sing  set  up   –  $      400,000  Marke?ng  and  adver?sing  expense   –  $      150,000  Legal,  accoun?ng,  closing  costs,  misc   –  $      400,000  SG&A   –  $1,200,000  Cushion  due  to  cash  burn  ?ming     Exit  Strategy:     –  The  Company  is  an  airac?ve  plahorm  to  add  complementary  brands  and  product  lines  to  its  exis?ng   brands  and  planned  distribu?on  channels.  The  Company  will  be  ripe  for  acquisi?on  by  another  fashion   brand  on  favorable  terms  within  the  next  36  –  48  months.    
    • Summary  •  Historically  the  Apparel  retail  segment  has  been  viewed  as  one  with  low   barriers  to  entry.  •  Online  Apparel  Sales  is  a  large  &  growing  marke?ng  opportunity  and  is   currently  the  fastest  growing  product  segment.    •  Purchasing  habits  of  the  broader  public  are  increasingly  moving  towards   quality  premium  brands.  •  Differen?ated  target  market  is  the  California  Lifestyle,  while  prominent  in   the  hearts,  minds  and  souls  of  millions  world  wide,  has  not  been  pursued   in  the  apparel  industry.  •  The  Gordon  and  Smith  brand  name  has  been  established  for  over  50   years.  We  believe  building  on  this  Brand  to  establish  an  apparel  line  is  a   natural  extension  of  posi?oning  for  Mature  Adults  (25-­‐40)  with  strong   demographics.  •  Our  management  team  is  well  experienced  and  has  built  brands  from  the   ground  up,  and  has  grown  mul?ple  companies  represen?ng  $100  millions   in  retail  sales.  
    • Management  Team  Greg  Walker   Gary  Kazmer  Mr.  Walker  has  over  20  years  as  a  senior  execu?ve  with  a   Mr.  Kazmer  has  30  years  of  apparel,  sox  goods  and  hard  strong  record  of  building  and  running  rapid  growth,  profitable   goods  experience  in  a  variety  of  opera?onal  roles  with  the  last  business.  In  1991,  he  founded  and  led  a  successful  digital   16  at  the  execu?ve  level.  He  has  9  years  experience  with  communica?ons  company  that  brought  significant  recogni?on   Redcats  USA  (Internet  Retailer  #31  and  the  #3  catalog  for  innova?ve  contribu?ons  to  the  advancement  of   company  worldwide).    At  Redcats  he  managed  the  lifestyle  anima?on,  photographic,  and  special  effects  technology  and   division  of  Redcats  USA,  which  had  a  $250  Million  revenue  techniques.    Later  went  on  to  specialize  in  organiza?onal   stream  from  three  brands,  designed  a  new  e-­‐commerce  turnarounds,  star?ng  with  an  underperforming  DOD   plahorm  and  website  which  increased  e-­‐commerce  sales  by  contractor  as  President  increased  sales  to  over  $20M,  and   50%  and  managed  the  customer  contact  and  up  sell  program,  then  became  Chief  Opera?ng  Officer  for  a  start-­‐up  fashion   across  all  Redcats  business  units,  to  create  an  addi?onal  business  which  grew  to  over  $36M  in  4  years.  He  is  a   revenue  stream  of  $135MM.  Before  that,  Gary  managed  respected  leader,  mindfully  commiied  to  assuring  common   opera?ons  for  QVC  as  the  company  grew  from  $250  Million  to  culture  and  shared  agenda,  strengthened  partnership  and   $1.4  Billion  and  he  managed  the  P/L  for  all  the  opera?ons  of  leadership.  Visionary  thinker  recognized  for  leading,  execu?ng   Shop  NBC  as  their  Vice  President  of  Opera?ons  as  they  grew  and  delivering.  Business  strategist  known  for  developing   from  $30  million  to  $300  million.    innova?ve  solu?ons  and  driving  growth.  Consensus  builder,   Most  recently,  as  President  of  Partsearch  Technologies  he  change  agent.  Commiied  to  airac?ng,  developing,  coaching   oversaw  a  30%  lix  in  Revenues  combined  with  a  600  basis  and  retaining  human  capital  and  building  high  performing,   point  lix  in  Net  Income.    dynamic,  diverse  teams.   Gary  aiended  Penn  State,  where  he  served  as  the  President     of  the  Student  Government  Associa?on.   In  addi?on,  Gary  currently  sits  on  two  Advisory  Boards  for   growing  ecommerce  companies.    
    • Advisory  Board  Stephen  Ludwig   Peter  Shen  (Strategist/CreaEve  Director/President  at  Group  22  Inc.)   (President  and  CEO  at  PhaSHEN)      Stephen  has  over  20  years  of  experience  in  visual   Peter  has  over  20  years  of  experience  in  the  fashion  industry.  communica?ons,  marke?ng  strategy  and  interac?ve/interface   With  a  degree  from  California  State  University,  Long  Beach,  in  development.  He  has  worked  with  small  start-­‐ups  and   Tex?les  and  Fashion  Design  –  his  accomplishments  included  na?onal  clients  in  the  automo?ve  industry,  toy  companies,   working  for  major  retailers  –  GAP,  Express,  NINE  WEST,  ac?on  sports,  financial  networks  and  the  entertainment   Macy’s,  Nordstrom,  Dillard’s  and  ACA  JOE.  He  furthered  his  industry.   career  in  design  and  manufacturing  by  working  for  XOXO,  At  Cohen  &  Godefroy,  he  honed  his  design  sensi?vi?es,   HEART  and  SOUL,  HOT  KISS,  YANK,  SELE  and  KISS  IT.  For  the  gained  a  deep  understanding  of  marke?ng  working  with   past  three  years,  he  founded  KI  GLOBAL  FASHIONS  in  joint  talented  integrated  marke?ng  and  PR  specialists,  and  built  the   venture  with  factories  in  China  to  bring  fashion  directly  from  founda?on  of  a  philosophy  for  the  next  genera?on  of   the  factory.  Currently  is  founder  and  CEO  of  PhaSHEN  Inc.  marke?ng  communica?ons  firm.  In  1998,  he  co-­‐founded   with  headquarters  in  the  heart  of  Los  Angeles’s  fashion  Group  22.  Today,  G22  handles  overall  marke?ng  and  strategy   district,  PhaSHEN  Inc.  provides  superior  product  development  for  a  number  of  clients,  as  well  as  project-­‐based  work   consul?ng  service  for  major  manufacturers  and  retailers.  They  including  branding,  collateral,  enterprise-­‐level  websites,   assist  major  fashion  brands  in  supply  chain  management  public  rela?ons,  SEO,  video  produc?on,  web-­‐based  training,   while  closing  the  gap  between  the  crea?ve  headquarters  in  and  many  others.    Aside  from  being  named  one  of  the  top  10   the  USA  and  overseas  manufacturing.  Their  skills  include  most  dependable  web-­‐design  firms,  Group  22  has  also  won   crea?ve  as  well  as  technical  design,  domes?c  and  overseas  awards  for  interface  design  for  various  web-­‐based  training   sourcing,  and  sample  making  right  here  in  Los  Angeles  and  applica?ons,  print  awards  for  their  work  on  the  Acura  Facts   also  in  their  China  offices.  Guide  and  been  featured  in  many  trade  publica?ons  including    two  prin?ngs  of  Hot  California  Designers  and  several  Graphics  design  and  branding  books.