Clare Cho Ling Ngai-Howard

2023 was a killer year for Footwear brands. Who Popped? Stopped? And dropped? Lace yourselves up. 3 Quick takeaways for the non-scrollers: 1) Rev Multiples: 2x 2) Price to Earning (P/E) Ratio: 33x 3) Was a good year for footwear brands We’re looking at $226B in combined Market cap & $7B in Profits across 13 bizs. How to read the Pop, Stop, and Drop sections (Cap | Net Income (YOY)): - Popped: Net Income increased YoY - Stopped: Net Income dropped YoY - Dropped: Free fallin’ Who Popped 🎉: * Crocs: $8.8B | Made $792m (+47% YoY) * Skechers: $10.4B | Made $545m (+46% YoY) * Deckers Brands (UGG + HOKA): $22B | Made $516m (+14% YoY) * On: $11.1B | Made $79.6m (+25% YoY) They struck the right balance of hitting the cultural moment and controlling costs. All Poppers reduced COGS as a % of Rev = more profits to the bottom line. Keeping OPEX in line allowed them to extract more profits while increasing sales from capturing consumers' desires. Who Stopped ⚠️: * Nike: $104B | Made $5B (-16% YoY) * PUMA Group: $6.8B | Made $388m (-15% YoY) * Steve Madden: $3.1B | Made $173m (-20% YoY) * BIRKENSTOCK: $8.4B | Made $75m (-60% YoY) * ASICS Corporation: $8.6B | Made $19.8m (-43% YoY) These brands had solid topline growth, but came with an OPEX increase generating less profits YoY. This isn’t financial advice… But there’s NO way Asics continues to trade at 400x+ earnings or Birkenstock at 100x+ earnings. I understand future momentum, but Nike trades at 20x. Who Dropped 📉: * adidas: $43B | Lost $15m (-102% YoY) * Wolverine Worldwide: $650m | Lost $39m (+79% YoY) * Allbirds: $97m | Lost $152m (-50% YoY) * Alpargatas S.A.: $6.7B | Lost $370m (-1,793% YoY) All these brands missed the consumer mark. Lack of focus, slower turns, and more discounts have the makings of a death spiral. Allbirds is on the bankruptcy watchlist. Each brand will have to find their way back, for some they won’t make it out alive. All in all, 2023 was a great year to be a Footwear brand. Footwear is one of the hardest types of brands to build. But once you hit success… It’s a powerhouse. Who was the biggest stand out for you? #shopify

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There's a major revolution disrupting fashion and how we think about ownership. The resale market for secondhand clothing and accessories is expected to outpace traditional retail within the next decade. What started as a niche for vintage lovers has become a multi-billion dollar industry, turbocharged by Gen Z's embrace of circularity and climate consciousness. From mega-platforms like ThredUp and Poshmark to luxury purveyors like The RealReal, entrepreneurial innovators are transforming overconsumption into re-commerce. This seismic shift isn't just a symbolic win for sustainability, it's creating an entirely new economic paradigm for the apparel ecosystem. One that prioritizes extended use, value retention, and maximizing each garment's life cycle over the wasteful era of disposable fast fashion. Resale is quickly becoming a critical line of revenue for brands. Some are launching branded re-commerce experiences to control their secondhand markets. Others are ponying up big bucks to acquire successful re-commerce startups, using them as entry points to tap into the lucrative circular economy. As a founder of a sustainable clothing brand, this shift is a validation of everything we've been working towards. It proves that consumers are hungry for sustainable alternatives and are willing to invest in quality over quantity. For us, the resale revolution presents a unique opportunity. We're not just creating new garments; we're building a brand that encourages longevity, repairability, and ultimately, resale value. #resalerevolution #sustainablefashion #circulareconomy #fashiontech #recommerce #fivethirtysomewhere #homegrown #handcraftedfabrics

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Just A Thought….. While it's true that some fashion brands might use inclusivity primarily as a marketing strategy to tap into new customer bases and enhance their public image, it's important to consider the broader context and potential benefits: 1. **Increased Visibility**: Even if the initial motivation is financial, featuring models with disabilities increases visibility and representation. This can have a positive impact by normalizing diverse bodies and abilities in mainstream media. 2. **Consumer Awareness**: Brands that embrace inclusive fashion, even for profit-driven reasons, can raise awareness among consumers about the importance of diversity. This can drive demand for more inclusive practices across the industry. 3. **Industry Standards**: When major brands adopt inclusive practices, it can set new standards within the fashion industry. Competitors may follow suit, leading to wider changes that benefit people with disabilities. 4. **Dialogue and Advocacy**: The inclusion of models with disabilities, regardless of motivation, sparks conversations about representation, accessibility, and the need for more inclusive practices. This dialogue can lead to meaningful advocacy and change. 5. **Empowerment and Opportunity**: Models with disabilities gain valuable opportunities and visibility, which can help them build their careers and inspire others. This can have a ripple effect, encouraging more people with disabilities to pursue careers in fashion and related fields. 6. **Critical Examination**: Public and media scrutiny of brands' motivations can push companies to adopt more genuine, long-term commitments to inclusivity. Consumers today are savvy and often demand authenticity from the brands they support. While it's important to critically assess the motivations behind inclusive practices, the outcomes can still contribute to positive change. Encouraging authenticity and holding brands accountable ensures that inclusivity becomes more than just a marketing strategy and leads to genuine, lasting improvements in representation and accessibility. #InclusiveFashion #RepresentationMatters #HoldBrandsAccountable #FashionForAll

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After seeing 100+ emerging brand income statements in the last year and the relative success of those businesses, I think the biggest mistake we've made as DTC operators is mispricing gross margin. Much of the premise of DTC 1.0 (Bonobos, Warby, Everlane etc) was cutting out the middle man. The belief was instead of having the 4x markup via a retailer, you could run a great business at 2x markup. But a lot of founders misunderstood product margin vs gross margin. Having 50% product margin makes operating challenging because you're probably only getting ~30% gross margin after CC fees, fulfillment, shipping, returns - which just isn't enough to operate profitability and have budget to grow. The scariest is when we see founders start with product margins much lower than <50% and want to reach that with scale. You're just setting yourself up for so much pain. You run at 35% product margin, 15% gross margin, there's just not enough budget to operate a business. We really believe table stakes are 70%+ product margins, i.e. in-warehouse for $30, average selling price of $100. Hopefully the logistics of your business allow you to achieve a 50% gross margin, and gives you a good shot at payroll, opex, marketing and profit!

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Last Friday, Retail Women in Tech hosted not only a very informative, but also a very engaging conversation about how to best position one selves for what's next in their career. I can't thank Hareesh Menon enough for sharing his experience and words of wisdom. I certainly learned a lot! Here are some of my takeaways: - Cover letters are a thing of the past. - Approach your resume like a storyboard. - Make a cover resume page that is unique to you. Share who you are, highlight your top achievements, say what you want to do & why you want to do it with that company. This is what recruiters first look at (and likely on their phone so make it easy to read). - Your cover page shouldn't change from job to job, except why you are interested in that company. Stay true to who you are. - LI isn't all that for finding a job. Stop the scrolling! Get intentional about your search beyond LI job postings. - Reach out to leaders in companies you are interested in; but when you do so, personalize the invitation, saying you like the work they are doing with said company, etcetc. - Lastly, but most importantly, map out where you want to be in the next 3 years. From there, determine what you need to learn, who can help you get there, who you need to get to know. Build your personal "GPS" community to help you get there.

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In the fashion retail world, it is anticipated that Q1 will underperform against the holiday rush of Q4 even in the most successful of brands. I'm blown away to share that Q1 2024 at Pashion Footwear has closed at 2% growth over Q4, and 222% year over year - recognizing a 22% EBITDA. The viral momentum around our convertible heels in the new year is tangible. In Q1, we saw our instagram grow 160% - earning us the title of the 3rd fastest growing brand on the entire platform. Of our 30 products dropped in our spring line, 21 of them are selling through at an average rate of 33% above projection (with 6 of our new products selling out in under 24 hours). We posted our highest single-sales day record in March - on a day with no promo, new release, or marketing activity of note....all it took was receiving the restock of our best sellers. We posted $230K in net sales in 24 hours (dramatically surpassing our previous record of $120k, which we achieved on Black Friday '23). The restock, originally forecasted to last ~90 days, was over 80% sold through in 72 hours. If the "worst quarter of the year for retail" can perform this well, I simply can't wait to see what the rest of 2024 has in store! #organicmarketing #cpg #convertibleheels #startup #femalefounder #growth #growthmarketing #brandawareness #footwearindustry #innovation #productmarketfit

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For some of our brands, over 40% of their customers have Treet accounts (i.e. nearly half of their community is participating in their resale program) 🤯 This bodes really well for the case toward circular business models. Brands that fully embrace resale and see this type of adoption have the best chance at reducing their footprint – they can depend more on resale revenue and less on new product production for growth. If brands can get resale-attributed revenue to 20% or more, suddenly the concept of degrowth becomes a lot more feasible.

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