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.