2PM - New Memo: Solo Brands' Novel Strategy

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Memo: A once-obscure brand just outside of Dallas, Texas evolved into a generational model for how business is done, brands are built, and liquidity is achieved for stakeholders. Founded in 2010 and trading today at $DTC with a market cap that hovers around $500 million, Solo Brands has an exceptional story.

The maturing of Solo Brands is as a masterclass in strategic expansion and fiscal diligence. While many navigate the turbulent waters of the DTC marketplace, Solo Brands has set a gold standard, embodying a synergy of vision, cooperation, fiscal responsibility, and an understanding of its target customer. And they’ve just made their latest acquisition.

Solo Brands' Novel Strategy

Why EBITDA has such a strong hold on retail

Economics / Retail Dive: In 2013, Professor of Accounting Practice at London Business School Chris Higson wrote that EBITDA’s popularity began in the 1990s when “there were many loss-making technology businesses on the market at sky-high valuations. Since EBITDA was more likely to be positive than EBIT, it provided a useful basis for valuation multiples.”

From "Club EBITDA": "Historically, digitally native apparel retailers were the least likely to achieve either an exit, profitability, or long-term viability."

Alibaba's logistics arm files for $1 billion-plus IPO

Logistics / BoF: Alibaba is in the midst of a historic overhaul, splitting up into six main units and transitioning to new leadership under recently appointed chief executive officer Eddie Wu. His predecessor, Daniel Zhang, stepped down as chair and CEO to focus on Alibaba’s cloud division, and then months later, relinquished those duties as well to take on a brand-new investment fund.

TikTok's Chinese sellers cite that their products are not selling

eCommerce / WSJ: After months of trying, sales from the channel were weak. His saleswoman was too traditional, pitching products just like an infomercial, said the businessman from Nantong in eastern China.

Fast fashion is leaning into resale to reduce emissions

Plastics and Decarbonization / CNBC: The programs, which some criticized as insufficient, help the environment in the sense that it’s more sustainable to buy a used item than it is to buy a new product. However, the programs can be difficult for fast-fashion retailers to scale profitably, which could limit investments in the efforts. 

Editor's Note: for more on this topic, see the latest in our forecast series below. In "The End of Synthetic Fabrics", we discuss changing sentiment around the appeal of synthetic fabrics in a fashion retail culture that is fraught with waste and over-production. 

The Whole Series 👆🏾 / Part Four 👇🏽: Fashion’s heavy dependence on plastic and fossil fuels is glaringly evident. As of now, it stands as one of the most significant contributors to pollution, climate change, and the overarching environmental crisis. By 2030, it is projected that almost two-thirds of all textiles will be crafted from synthetic materials, further exacerbating the fashion industry’s carbon footprint.

Part 4 of 5: The End of Synthetic Fabrics

Sporty & Rich launches new collab, founder preps her move

Modern Branding / WWD: The main markets for the brand are the U.S., the U.K. and South Korea. “The Korean market loves us, so we really have accelerated that a lot,” she said. The brand is now in three stores there through a joint venture.

Retail media plays starring role at Groceryshop

Retail Media / Winsight: Just a sampling of grocery retailers upping their retail media game recently include Hy-Vee, Albertsons Cos., Ahold Delhaize USA, The Kroger Co. and Giant Eagle, among others. At Groceryshop, held last week in Las Vegas, Hy-Vee perhaps made the biggest splash with the official launch of its own retail media network, called Hy-Vee RedMedia.

Updated For September 20: 802 brands covered. Today’s breakout is the top 20 fastest growing brands over the last month, regardless of size or market position. Interestingly enough, the two fastest growing brands over the past month are built atop of Squarespace. 

The DTC pet food market future trends analysis to 2031

Data / For-Purchase Report: The global Direct to Consumer (DTC) Pet Food Market is estimated to reach over USD 16.46 billion by 2031, exhibiting a CAGR of 27.4% during the forecast period.

How AI software is helping DTC beauty brands to shine

Data / Cosmetic Design: As the Direct-To-Consumer (DTC) beauty market continues to carve out a bigger share of the retail landscape, using the right tools to fine tune digital retail platforms has become make or break.

U.S. accuses Amazon of illegally protecting monopoly in online retail

Antitrust / NYT: The lawsuit put the influence and reach of Amazon, a $1.3 trillion behemoth, squarely in the spotlight after years of mounting scrutiny. Founded by Jeff Bezos in 1994, the onetime upstart online bookseller has grown into a sprawling conglomerate with tentacles in retail, Hollywood and the foundational infrastructure of the internet.

Editor's Note: A lot has changed since this original memo on the Amazon antitrust issue from 2018. 

Cultural capital is no substitute for cold, hard cash

Sociology / Jacobin: The rich used to eat, dress, and even speak entirely differently from the masses. Today they wear T-shirts and sneakers just like the rest of us. But that doesn't mean we're all equal. It only lays bare the real source of inequality: actual money.

I recently read Status and Culture (reviewed above) by W. David Marx and it is truly exceptional. From a retail and branding perspective, it's a worthwhile education on sociology, anthropology, and consumer psychology.