ROTH CAPITAL PARTNERS: Hosting 27th Growth Stock Conference March 8-11 in Dana Point, Calif.
Details on Industry Insight.
I had a great conversation with Shaun Neff, founder of the accessories company Neff, at SIA. It’s always fun to hear about a brand that started from nothing, is growing like crazy, and finding ways to professionalize its operation.
Shaun started Neff seven years ago while a student at Brigham Young University. In the very early days, he bought beanies at Wal-Mart, the 99 cents store and online and had Neff embroidered on them.
“There was absolutely no margin in that,” he said. “But I was like, what’s margin?”
Shaun and Neff have come a long way since that. The company currently works in Ventura out of a 10,000-square-foot warehouse that it may soon expand to 20,000 square feet.
Colin Madden, formerly in sales with Burton and DC Shoes, is the new VP of Sales. And, Neff has brought on a new chief financial officer/chief operating officer who was consulting with the company and formerly worked at Bugle Boy who Shaun describes as a “high level type guy.”
“We’ve also had the vision, the idea and the products but we lacked operations and finance (expertise),” Shaun said.
In 2010, revenues should reach well over $10 million, Shaun said. Revenues have been doubling or tripling each year.
He said the company’s plan calls for it to focus on accessories – from its trademark beanies to pipe gloves, which it just launched, backpacks, socks, neck warmers, face masks and more.
Neff also makes fleece and T’s, which are “crushing it,” Shaun said.
I asked Shaun since the T’s are doing so well if he was tempted to expand into clothing and outerwear.
He said he and his team really studied it, and settled on a five-year vision to focus on being a fun, young, full-fledged accessories company.
“I don’t think retailers need another denim and outerwear brand so much,” he said. “We’re simple. We talked to our retailers about this, and they said, yeah, okay, we are onboard.”
Neff’s bread and butter product is its Daily beanie that comes in 20 colors and retails for $16. Every year, the company sells out of them. It recently hired more customer service reps to handle reorder phone calls.
Now, after investing in a new inventory system, Neff will have a better grip on its inventory position and load up on key styles, giving reps the opportunity “to count and fill,” Shaun said.
While Neff launched with snow, it has expanded into the skate market, which has been a little more challenging and is more of a touchy market, Shaun said. The lightweight beanie trend helped Neff in skate, and simple grey and black styles are popular.
Now Neff is launching some dawn patrol hats for the surf market and is working with energy drink brands on some beanies.
Shaun said it’s amazing to be in a lift line and see how many kids are wearing Neff beanies – he recently counted 21 kids with Neff beanies on out of 47. And Neff hats have been getting a lot of attention away from the hill as well. Snoop gave Neff’s cupcake beanie to the hosts of The View when he appeared on the show.
I spoke with Shaun on the first morning of SIA, and he was pretty excited. The company had 123 set appointments heading into the show vs. 16 last year. And by noon, they had already seen 15 retailers who were not on the appointment books.
The demand is obviously there. And now, with its infrastructure and key personnel investments, Neff is becoming “a functional company that works,” Shaun said.