The Style Club Before Shark Tank
Before any entrepreneurs even come into the Shark Tank, footage is shown of the crew taking away the panels that block the Sharks from seeing the product samples. Numerous mannequins are displayed throughout the stage, although Lori points to one mannequin in particular and says that she’s alive. Indeed, all the mannequins are alive! Lori then admits that they’re all dressed in cute fashion. Finally, the entrepreneur finally steps forward, and she has designed a business for the social media generation.
Hillary, originally from Pittsburgh, Pennsylvania, is founder and CEO of The Style Club. She is seeking an investment of $500,000 in exchange for 20% equity in her company. The Style Club is the first multi-platform young shopping network. With all the media that’s accessible, and mobile shopping at an alltime high, the shopping behavior of the young consumer has changed. It’s all about the experience. To demonstrate this, Hillary explains how The Style Club works. You can go onto the website and see some of their super hot music videos, featuring their style influencers.
Footage is played of a generic music video with women dressed in The Style Collection clothes, accompanied by a rather generic electronica music track. So, Hillary continues, their customers can shop for everything directly on the website. They can also shop for the brand at major retail stores, or they can shop on their app. Users can go onto the app and shop for everything right there with just one click of a button – it’s that easy! So, which one of the Sharks wants to help make the world more stylish again, and join the club?
The Style Club on Shark Tank
Mark Cuban can’t hide his bored look – my money says he will be one of the first Sharks to exit the deal. However, Damen clarifies that Hillary is in major retailers with The Style Club. They are in with Urban Outfitters, but before Hillary can continue her list, she passes out samples to each of the Sharks. Each of the Sharks are given a varsity jacket, and Lori’s has “Boss Babe” written on the back. Each of the Sharks has an embroidered piece of text on the back, written in cursive. Barb then asks what a jacket retails for, to which Megan replies $60 for the jacket.
Robert then asks how Hillary started the business. She started by creating video content, which was only just a year ago. The entire business has been running for a year. In Urban Outfitters, they have “The Babe Collection,” with “Love Club” going into stores next. They are in every single Urban Outfitters store. Every Shark is curious how she got this deal, and Hillary explains that Urban Outfitters actually came to them because they have a very strong social following. They actually work with major influencers like bloggers, celebrities, and more. They reach over 200,000 followers, but their influencers have a combined 50 million.
Robert asks for sales breakdowns. Total sales that they’ve had, to date, are around $400,000, which is around 40,000 units. Most of this has been through retail, which has only existed for 3 or 4 months. This is much better than $400,000 a year, which is about $1.2 million a year. Only at this one chain is this all happening. Urban Outfitters actually has exclusivity, which is why Hillary is in the Shark Tank. Kevin remarks, “ouch, ouch, ouch.” However, this deal is continuing – they have purchase orders all the way up through Summer of 2017, which is almost a year of continued purchase orders.
Robert then asks if there are one or two “big ticket” items. The “babe hat,” which is what one of the models is wearing, is the number one seller. Of the 400,000, about 300,000 are solely through that babe hat. All of the Sharks are blown away, and Lori asks why that is. Lori then says that there a lot of hats that look like that, so why is it the seller? Hillary then says that she always watches online so she’s aware of what the women are wearing on social media. However, Barb then says that she thought the term “babe” was insulting, but Kevin says that it’s because nobody calls her that anymore.
Damen then asks if the hats were bought from Urban Outfitters or sold through direct channels. Unfortunately, they were sold only at Urban Outfitters, and she cannot even sell the hat online. Nothing can be sold online and everything has to go through Urban Outfitters. There’s a concept in investing called diversification, which is how you protect your hiney when poo-poo happens. Mark disagrees, but Kevin continues. Hillary is all-in on one channel with a big bet on Urban Outfitters. It’s too risky, so Kevin is the first Shark out of the deal.
Robert then says that the sales are impressive, all in a short amount of time. What is the bigger plan, though? Selling online, going to other retailers, or what? Hillary then explains that their biggest channel is the direct to consumer, such as the video shopping app. The goal is to make it extremely simple for people to watch and shop, all in one place. Then Barb says that she is asking for $500,000 for a baby business, and she has no confidence. There is no room for a partner in the deal right now, so Barb is the second Shark out of the deal.
Hillary explains that The Style Club is on track for $1.2 million this year, and she has a big dream to make things happen. If she can build up the online channel, since the customers are very attached, they can make it happen. Lori then says that while she has a major retailer, which is cool especially since it’s a relevant retailer, she has already proven her success. She thinks that Hillary should try to keep making things and funnelling it to them, and have them keep expanding The Style Club. She does not see it as an investment for her right now, because she has a completely different thought on the way she should go. She is out, but she would definitely be a customer.
Robert then says that Hillary is cool, and she found a great way to start a business. However, she has to change her entire strategy, which is why she needs the cash. He wishes he had more data, but for half a million dollars, he just cannot find himself interested. Robert is the fourth Shark out of the deal. Kevin then says that she is here on a unique day in history since there are six Sharks present. Mark Cuban and Damen are the only two Sharks remaining.
Damen says that he was inspired by a company called “Across Colors” since they made it to a million dollars in a half year. However, they banked all in on one brand, and when that brand had a bad year, the entire company went under. However, he does have an offer to extend; he likes what she is doing, so he offers $500,000 in exchange for 33 and a third percent, which is ⅓ of the company. Mark then speaks up, saying he invested in a company that did the same thing with marketing on social media. Their biggest challenge was online, and they had challenges since they grew so quickly. They got through the trouble, and now they are on track to do $14 million this year.
Mark clarifies that he doesn’t want to team with anybody, and from what he gathers she needs expertise and tech. More importantly, she needs financing for inventory. So, he is going to structure the deal to be a $500,000 investment as a line of credit, but he will discount the interest rate down to 8%, which can typically be 10 or 12% from a factory. This would be in exchange for a 22% equity stake in the company.
Hillary says that while she appreciates Damen’s offer, she will in fact take the deal with Mark Cuban. The two hug, and Hillary has found an investment partner with Mark Cuban. Mark is insistent that they will perform incredibly well.
The Style Club After Shark Tank – 2018 Update
I’m unsure of exactly what Mark Cuban did, but he performed a miracle. Now, you can purchase The Style Club directly from their website, as well as at numerous retailers all over the United States. The Style Club can be found at retailers like Macy’s, Forever 21, Urban Outfitters, Nordstrom, American Eagle Outfitters, Asos, Skinny Dip, Amazon, State of Myne, Halcyon, Ludovica, Lisa Says, Be, and Cedros Soles. Most of these are one-off locations, especially the stores listed after Amazon, so The Style Club may not be available immediately in your area.
The Style Club still continues its social media domination. The prices of The Style Club appear to have become more competitive, with jeans priced around $49 and accessories priced anywhere from $10 to $18. More and more products are continuing to launch, even with some new and bold styles like jumpsuits or overalls.