Scrappy HippyTree alive and growing
When I last met with the HippyTree partners Andrew Sarnecki and Josh Sweeney two years ago, they were living and working in a small apartment in Manhattan Beach and scrapping for every dollar.
They are still in the same workspace, but getting ready to finally make the leap to an official office. The brand has grown a lot in two years and is now in 250 retailers.
Josh answered some questions for me about HippyTree’s progress.
HippyTree targets both the surf and outdoor markets.
HippyTree is still alive and kicking. What steps did the company take to make it through the recession?
We made a conscious effort in designing products and graphics that would sell regardless of the economic situation. We eliminated weak designs and only offered products that we were confident would check at retail.
A cautious approach to forecasting along with manufacturing limited quantities allowed us to control our cash flow and keep our inventory manageable.
What is your distribution like these days – both in terms of type of stores and regions?
We’re still keeping the focus on specialty retailers. Our strongest market is California. HippyTree continues to have great sell through at Spyder, Thalia St, O’Neill, Huntington Surf & Sport and K5. Our T-shirt sales are in the top five at Hobie, ZJ’s and Becker.
We’ve experienced growth on the East Coast and are working on increasing our specialty distribution along the Atlantic coast.
We’ve teamed up with distributors in Japan, Taiwan, Germany and Australia to help grow the brands international presence.
We’ve added sales reps in Northern California and New England to help with domestic sales. We’re still searching for road reps in other key territories to help increase our US distribution.
Have you added any new accounts you are excited about?
We recently locked in a solid order from Easter Mountain Sports (EMS), a major East Coast outdoor retailer. EMS is the East Coast equivalent of REI. This is our first major step in cementing our presence in the outdoor industry. We are very excited to be working with EMS.
When we last talked, the brand was going to target the outdoor segment. How has that gone?
We have had a great response from the outdoor community. The climbing industry and culture has become an integral part in our marketing, design and lifestyle.
The outdoor retail structure is a little different than the specialty surf retail structure. There are less single door specialty accounts and more chain accounts with multiple doors. The outdoor industry has been dominated by high-end, conservative brands for the last 20 years. When we show the HippyTree line to outdoor accounts they are blown away and excited to see a younger brand making a push into the market.
There is a growing youth culture in the outdoor industry that doesn’t want to wear the same brands their parents have in the closet and the retailers are aware of this.
Money was pretty tight the last time we talked as well. Have you raised any funds?
Money is still tight. Our financial problems are good problems. They stem from receiving consistent pre-books and orders that outweigh our cash flow. Luckily we have a great network of family and friends that believe in HippyTree and have helped us out when our cash flow is low.
Do you have the capital you need to grow?
We’re getting to the level where we are consistently running into issues with cash flow. We are currently searching for outside investments or financial partners to help us sustain our growth. We look forward to the day we can start making a greater presence in the market through advertising.
Do you have offices and or a warehouse?
As of right now, we’re still in the same live/work facility. We have pretty much maxed out our three garage warehouses and are currently trying to find a building with warehouse and office space to move into before Fall delivery.
Living and working in the same facility has allowed us to keep our overhead low, but after five years of being in business it is time for us to take the next step and move into a legitimate building.
What categories do you make now and any interesting sales trends emerging?
For Spring-Summer, we released our first eco-friendly boardshort fabricated with 100% recycled polyester along with our first walk short and woven button up.
For Fall-Winter we are unveiling our first reversible jacket and eco-friendly sweatshirt manufactured with organic cotton.
We have taken care to incrementally grow and release new products each season. By developing the brand organically and offering new products each season we give our customers and retailers something to anticipate every time a HippyTree collection is released.
We believe slow controlled growth and distribution are the keys to HippyTree’s success and intend to stick to this game plan.