ROTH CAPITAL PARTNERS: Hosting 27th Growth Stock Conference March 8-11 in Dana Point, Calif.
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I had breakfast the other morning at Cappy's in Newport Beach with Jamahl Grey, the general manager of the Australian brand Rhythm. Jamahl was in the States to meet with Jye Townend, who is managing the U.S. Rhythm operation, and to check in with key retail accounts.
Rhythm's first shipment in the U.S. market will arrive in stores in January. The brand landed some good accounts for its first season, including Sun Diego, HSS, Surf Club Surf Shop, South Coast Surf Shop, ZJ Boarding House, Rusty, Infinity Surf, Mitch's Surf Shop, Swell.com and Thalia Surf Shop.
Rhythm is best known for its colorful boardshorts, but also has walkshorts, wovens, T-shirts, tanks and a few accessories in the first line. The company's walk shorts feature all over prints, including one pair covered with images of bananas.
The printed walk shorts "definitely stand out," Jye said.
The line was not created for the U.S., but is a combination of new and older pieces from Rhythm lines in Australia that Jye thought would work in the U.S. market.
During his visit here, Jamahl said he's been checking out the U.S. stores to see what is doing well for fall, and will use some of that information for the direction of the next Rhythm winter line for Australia as well.
I asked Jamahl what he noticed at the stores here. He said there's a lot of flannel, which looks good, but at the same time he wonders, will it all sell? Will retailers be backing it just as hard next year, or will it be time to move onto something else? In Australia, Rhythm had good bookings of flannel for the next winter season, but he's curious to see what the sell through will be.
Jamahl also thought there was a good level of detail in the garments here. He did think if one were to put several different brands on one rack, it would be hard to tell them apart.
With its entry into the U.S. market, Rhythm is not planning to take over the world in a day, but wants to make smart investments and listen to retailers. "We don't have massive short-term expectations," Jamahl said. "We probably have massive long term expectations, but in the short term, we are not putting too much pressure on ourselves."
Rhythm so far has met its internal U.S. sales goals for the spring line.
Currently, the brand is focusing on the West Coast, and will step up its efforts on the East Coast in January, when it attends Surf Expo. The biggest challenge has been finding strong sales reps on the East Coast, Jye said.
In Australia, Rhythm, which launched in 2003, has been happy to grow at a measured pace and let the consumer discover them instead of immediately spending tons of money on advertising and other flashy marketing.
Jamahl said Rhythm will take that approach here as well.