Monday, October 3, 2022

SwimZip Update- What Happened After Shark Tank

SwimZip Before Shark Tank

Betsy Johnson and Barry Wanless are brother-and-sister, as well as the founders of Swimzip. SwimZip is a protective swimming clothing line that will protect the wearer from any potential harmful rays of the sun, providing excellent UV protection. They are seeking $60,000 in exchange for a 5% stake in their company.

As parents, Betsy and Barry want to do the best to keep their children safe, and no matter how diligently they apply and reapply sunscreen, they are still subjecting their children’s skin to the sun and putting them at risk for such dangers like sunburns. When they take their kids to the pool, they want it to be fun but with all the screaming and fighting and fussing, traditional sun protection methods can be more of a chore. The SwimZip protective swimmer line is meant to be kids sun-safe and parents safe as well. SwimZip outfits feature a full-length zipper that runs down the front, so it’s extremely easy to put on and take off. Both the tops and bottoms block 98% of UVA and UVB cancer-causing rays. In fact, SwimZip’s sun protective sun protective gear is so easy that kids can wear it themselves without any assistance from the parents.

SwimZip On Shark Tank

Lori asks if the pair are designing and manufacturing the entirety of the product today, to which Betsy replies

A child models some SwipZip clothing
A child models some SwipZip clothing

that she is in charge of designing and creating prints and shipping out information for manufacturing. Robert remarks that he loves the styles, and the children that accompanied Betsy and Barry begin to distribute samples to the Sharks. The swimsuits come as sets, to the purchaser actually gets both the top and bottom. Kevin asks about sales, and in one year they have sold $525,000 – this is actually their third year in business. The second year, sales were around $18,000, so they have grown 1100% in a year. Sales are accumulated through Amazon, general internet websites, through Target’s storefronts and online retailing, and they are even at some high-end hotels where parents might buy last-minute swim gear for their children. The selection of stores is extremely small, but SwimZip is all over the world – Japan, Germany, Guam, and even China. Each garment is made for $5 to $7, and Daymond asks about profits – around $100,000 total, after they reveal that they do not pay themselves salary at Kevin’s questioning. Kevin asks about the valuation of $1.2 million, and mentions that if the two of them had paid themselves each $50,000, which is not unreasonable, the business would have made nothing.

Mark asks if there is anything unique about the materials, to which Betsy replies that there is nothing unique about the SwimZip outfits – it’s just swimsuit material. Robert points out that since the material is not unique, what makes the product unique is that the same material is created with a zipper up the front; the design, not the intended function of the clothing is what makes the SwimZip line unique. Barry says that where SwimZip distances itself from any competition is the price point, which is $15 for both the top and bottom. Other competitors start at $45 to $60, all without a zipper. However, Kevin is having trouble valuing the business – since the two have established some market share and proven that they can design the products, he only finds a value of around $500,000 but not a value worth $1.2 million. Kevin insists that they look to Daymond, who founded Fubu, a clothing brand. Kevin asks Daymond if he could start a clothing brand with under $500,000, who quickly replies that yes, Kevin could if he wanted to. Kevin then looks back to Betsy and Barry, asking what he would need the two of them for if he can found a company himself and for cheap. Kevin continues on, saying that he looks as his money as gasoline – he wants to pour it on something that he knows already works, taking money and adding it to more money to get way more money. There is no place for him to pour his money into, and Kevin is the first Shark to exit the deal.

Betsy and Barry, the brother-sister duo that founded SwimZip
Betsy and Barry, the brother-sister duo that founded SwimZip

Betsy says that SwimZip is on the Target website and actually serves as an exclusive line, but Lori takes the wind out of SwimZip’s sales when she asks if the product has been taken to stores yet – Betsy reveals that Target has not taken the product line into stores yet. However, they are working on a test currently to send products to the southern Target stores, at which point Daymond says that they do not want to do that. The “big guys” (large retailers) can completely crush such a small clothing company with just one set of returns. The margins at that point become so small, so Daymond recommends that they want to stay with the boutiques. Daymond continues on, saying that part of the problem is that the two are so green when it comes to fashion and clothing. However, he admits he is impressed that the two of them have made it as far as they have and actually broken through the hardest point, which is the proof of concept. Kevin remarks that there is still bad stuff coming, but Daymond says he does see the growth potential of SwimZip. Unfortunately, it is just a little too early for Daymond to invest, and he exits the deal.

Betsy reveals that she started the company because she was diagnosed with skin cancer at the age of 26, and after she began to show signs of remission, she took her work paychecks and began to dedicate them more towards SwimZip in hopes that she could save anyone else from the same excruciating pain she suffered through the process of treating her skin cancer. SwimZip is her passion, and she knows that SwimZip could lead to the future but she still has a lot to learn. Betsy says that she is a mommy on a mission, and that her one-year-old is her entire world; this is what drives her to push SwimZip.

Robert remarks that $225,000 in sales is nothing by any means; he agrees with Daymond that he is impressed they made it this far and that frankly, all of the Sharks love the goal of SwimZip but if they knew the things that they should be afraid of in business, they may have never even started. Unfortunately, it isn’t always about the ability to overcome doubt but also about gaining experience, which is made through action. However, Robert says he is struggling with moving the business from a boutique to millions of dollars. He does not have the answer and because he has no experience with taking a small clothing line into a million dollar brand, Robert does not feel safe with his investment. He is out of the deal as well.

Mark speaks up, remarking that Betsy is a beast for overcoming skin cancer and starting a business to help

All the "technical specifications" and details about SwimZip clothing
All the “technical specifications” and details about SwimZip clothing

others. However, they are still a family business – in the typical life cycle of a family business, they build to a point where they could potentially explode and collapse in on themselves. Mark continues on, saying that SwimZip has not even broken out of the point where they are selling to people that aren’t family and friends – they aren’t even taking on additional employees at the moment. It’s just a huge step, and until the two make it to that step, it is much more difficult to have a united goal to the point where an investor can come in, and after investing in more than 30 businesses on Shark Tank, Mark says that point has become increasingly clear to him. Betsy says that she is also open to a strategic partner that would come aboard, as she needs the help and guidance. Unfortunately, Mark exits the deal.

Lori is the last Shark remaining, and she starts by saying that she was also a one-man band for five years. Just like Betsy, she had passion, drive, and a dream, and she is sitting in the Shark Tank today making offers to entrepreneurs. She sees much of this in Betsy, because Betsy is not only smart but also right on trend since melanoma is one of the number one killers and scares the parents of young children. Lori says that she would like to provide Betsy an opportunity, and offers $60,000 in exchange for a 20% equity stake in SwimZips. Lori says that she wants Betsy to be open to a different offer, but she is looking for a return that is realistic and won’t hurt her in the long run. Betsy’s face lights up, and Lori remarks that she wants to get behind someone who is doing the right thing; as Betsy turns to Barry, Kevin remarks that Lori gave a valuation of $300,000, which he finds as fair since they do not actually make any money. Betsy fires back with a deal of $120,000 for 20%, doubling the offer. Lori remarks that she had a lot of confidence in Betsy 4 to 5 minutes, but now she says she is getting worried because Betsy is showing her a different side. Lori says that she is losing confidence, and that she will not change her number, but she wants to make sure that she is finding the right person.

Ultimately, Betsy and Barry accept Lori’s offer after some deliberation between the two of them. The siblings find an investment of $60,000 for a 20% stake in their business.

Sharktank4SwimZip Now in 2018- The After Shark Tank Update

SwimZip is still very much alive – the most telltale sign of this is the fact that either Betsy, Barry, or somebody the family has hired is very actively managing their Social Media accounts, incorporating not only just (completely) free advertising but also deals such as 40% off a purchase of a “Roundie.” The product line has expanded, which can be found on their website, and the products can even be found on Amazon. I could not find any concrete sales, but I imagine with the Shark Tank effect backing up SwimZip combined with the good will of parents who want to protect their children from the sun, SwimZip must be doing quite well for itself. Hopefully Betsy and Barry are paying themselves now.

Steven Kahn
King of the Bears, Shark Tank enthusiast, failed network engineer, sour cream enthusiast, Nanchaku instructor, Techman, Mega Man X fan, vaporizing know-how
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