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Details on Industry Insight.
The climate may be gloomy out there, but Factor54 partners Todd Miller and Ted Wueste are excited about several developments for their young brand.
I talked to Ted last week and had a nice chat with Todd at ASR.
Here's the latest:
- They've hired a new designer, Rick Maderis, who is helping to balance Factor54's style between surf and skate. Previously, the clothes had more of a street feel that thrived in skate shops but didn't do as well in some traditional surf shops, Ted said. Rick is also helping the company build its categories and with other content. Some of his designs can be seen in spring and summer, with fall his first full-blown line.
- Factor54 signed Alex Moncata to be its sales rep in Hawaii. Alex is the brother of Clint Moncata, a legendary rep in the Islands, Ted said.
- In Puerto Rico, Javier Rivera, a former Quiksilver subrep with extensive connections, has signed on as the Factor54 rep.
I also asked Ted how stores are handling orders at the moment. He said Factor54 hasn't had any cancellations, but that retailers are definitely being cautious and are very "at once" oriented. Retailers are still paying, however, and the company only has one delinquent account out of its 150 to 160 customers.
Strong categories for Factor54 include T's, knit tanks and denim. The company hadn't planned on branching into denim so soon but made some for its skate team. Then stores started asking for it.
Some particularly strong regions for the company include the Southeast, where Factor54 has several team riders, and Puerto Rico.
I asked my friend Luis Santori, vice president of merchandising at Bora Bora stores in Puerto Rico, how Factor54 is doing at Bora Bora.
"We decided to pick it up for various reasons but primarily for the good relationship we have with Todd and (F54 employee) Anita (Rentz)," Luis said. "Don't get me wrong, we liked the product, but the Puerto Rico market is different than the O.C. market."
"We did an initial order for two stores of a few screens and to my surprise a reorder was going out within a week and we added a store.
"They've done a very good job with different graphics, (more) than traditional brands and that's where their success comes around. Major brands have tried to take advantage of everything that's going on with T-shirt graphics and styles but at the end of the day they can't claim ownership as smaller and newer brands can."
Todd and Ted, working from a small revenue base, had planned for explosive growth this year after raising money from investors to help finance the growth. They have since moderated their forecasts because of the economy, though the company is still planning on 100 to 200 percent growth, Ted said.
They are keeping expenses low, and work out of the garage behind Todd's house in Costa Mesa. They had planned to move to offices, but decided to wait.
"We're bursting at the seams, but we decided to get some offsite storage and add new shelves," Ted said. "We are operating very bare-bones. We are not going to blow the money we raised. We want to be here through this contraction at the retail and manufacturer level."