~~~ Important Information About E-motion Apparel; Our Recent Acquisition ! ~~~
Acquired E-motion Apparel, Inc. on March 12, 2018, our first microbrand
acquisition in the US market. While this acquisition was not one of the
three we announced through LOIs, we had coveted this one for a while and
we were able to complete the transaction quickly once the seller agreed.
This acquisition is critical to our microbrand acquisition strategy
because:
-- The ecommerce strategy that almost all retailers miss the mark on
is that the ongoing offers of reduced prices online denigrates
their brand. Consumers learn quickly that they can wait for the
largest discounts because additional discount offers are right
around the corner.
-- Instead, successful online retailers can create urgency
differently: They do so by making smaller batches of new fresh
product, and updating their sites with new products very often,
not just a few times per year.
-- As a domestic manufacturer, its acquisition allows us to produce
small quantities of products and create new style offerings on a
weekly base. Over time, this strategy allows us to create urgency
through our online sites for Emotion and its other brands, as well
as for every other microbrand we will acquire.
-- With the minimum wage increasing in California to $15 per hour, we
decided to move this Company's manufacturing to Salt Lake City,
Utah, where the minimum wage is half of that in California
primarily because of the much lower costs of living. In Utah,
taxes, rent and workers compensation insurance are lower;
electricity, property insurance and transportation costs are also
less. This move will significantly increase our net income from
the E-motion Apparel operation.
For the Balance of FY2018 and Beyond:
AI
