Website Closers® presents a well-established eCommerce leader in the Woman’s Fashion & Apparel Vertical. This company creates a comfortable, trendy sports-themed clothing and accessories line based out of Dallas, Texas (although it can be operated from anywhere). This opportunity has developed a massive social media presence, resulting in rocket ship level results. The husband-and-wife founders of this business have used the power of social media to create an internet darling with 490,000 followers on Facebook, 230,000 followers on Instagram and over 270,000 opt-in email subscribers.
Through these efforts, and a smart SEM strategy, the company achieves strong margins through a powerful marketing platform, 100% focused on the U.S. female demographic. Because of the large and growing customer base, this online retailer has become a solid platform by which to launch new products and assortments for women in search for trendy, cutting edge fashion with a sports-based theme.
This company would be a great bolt on for others already in the Women’s Fashion Space looking for additional sales channels – developing a social media presence is time consuming and costly – but through this acquisition you get both the channel and the beautiful brand.
This target currently has 200-400 designs available on the website at any given time; as a small business, it is difficult for the owners to have more SKUs than that on its shelves. However, there are thousands of designs in the design library that are already made and ready to be used. This can be a huge asset to whomever takes over, as these designs were almost all “top-sellers” at one point in time. Many of the designs were created by the owner (graphic designer), and a few hundred were done by a graphic designer overseas.
Having a library of thousands of completed designs would save the new owner over $40,000 or more in design fees and thousands of hours of creative time. With a small additional investment in working capital, many of these SKUs could be reintroduced along side current active SKUs, instantly growing product availability, sales and earnings. Additionally, if an owner isn’t a graphic designer, or doesn’t have one on staff, in addition to the large library already present, as well as the overseas resource, a US-based graphic designer could easily be brought on to support the new owner.
The company has blasted through 2020 achieving earnings of $1.99 million on Gross Sales of $4.96 million. 2020 represented YOY sales growth of 372% over 2019. Much of this growth was driven by the 2020 implementation of Octane AI (Facebook Messenger app) that helped to increase revenue significantly. The Company also made the move to add customers to its SMS text message platform, email marketing campaigns, and push notifications, which further drove increases in revenue, with many of these customers returning for repeat purchases. Management recognizes that April and May of 2020 saw a spike in sales and earnings with the surge of specialty designer mask sales. In an effort of full transparency, the Company has provided two versions of the 2020 P&L, showing actual total sales with and total sales without the April/May mask spike. It is estimated that without mask sales, the company grossed $1.37 million in earnings on $3.67 million in sales. It should be noted, however that these face covering sales brought with them a huge new database of customers, many of whom have returned as repeat buyers.
The company’s founders are open to remaining in some role with the business for a period of time after a sale because they remain committed to their vision of making this a truly enterprise-level fashion business; therefore, a buyer of this company can use both the platform built, as well as the skills and experience of the founders, to continue to achieve scale.
While the company is scaling steadily as is, there are a multitude of opportunities for growth through expanded selling channels, paid media use, SEO and social media influencer partnerships. As a company that currently sells only through their owned website, this business’ growth could be skyrocketed by Amazon utilization and expansion into Target, both online and off. Additionally, as a sports lifestyle brand, leveraging social media for brand development could be a key to further success in this vertical.
The Company is on the cutting edge of fashion, and with its massive social media following we believe that wholesale distribution can be a big near-term play for the company. It sits in a highly sought-after space targeting the lucrative female demographic with a loyal, repeat customer base. The founders have built the business from the ground up (starting as just a hobby) but realize that it is now time for them to pass the company on to a group with the skill set and bench depth to take it to the next level.
