F54 signs new deal to help business grow!

Factor54 founder on new licensing agreement

http://www.shop-eat-surf.com/news-item/1539/why-factor54-has-signed-a-licensing/-

By TIFFANY MONTGOMERY | April 19, 2010 06:15 AM

Factor54 Founder Todd Miller. Shop-eat-surf file photo.

Young brand Factor54 has signed a licensing agreement with Advance Sport Inc.

Advance Sports will handle design, production, sales and distribution for the brand globally.

F54 will retain sole equity interest in the business and will work on marketing and creative.

I asked F54 founder Todd Miller about the deal.

Why did you decide to take the license route?

It enables us to go to the next level in our business. Overall, we were selling-in and selling through at retail much faster than we were prepared to handle from a manufacturing and distribution perspective. We literally could not get product produced quickly enough.

The bigger challenge was meeting demand for a deeper, properly merchandised line. We were pretty much an items business -- mainly printables, board shorts, hats, socks ... the basics ... and our bigger accounts were requiring a broader and deeper assortment than we were tooled to produce.

So we looked at a number of options, and a healthy licensing solution was clearly the best choice.

Is Ted Wueste still involved in the company?

Yes, Ted is still with the business as an equity partner; however, he is not involved in day-to-day operational matters.

(Above: Todd Miller and Ted Wueste in Factor54's garage/office. Shop-eat-surf file photo.)

I haven't seen much of Factor54 in local surf shops lately. Did you have enough resources to produce goods?

It's a classic case of "be careful what you ask for, because you might get it."

It took us six years to become an overnight success. We were blowing up, we were a hot brand, but we didn't have the product to supply the demand.

We literally could not make ship dates because orders were too big and required quicker turnarounds than we were prepared to handle.

More important, the brand grew bigger than the product line. That is to say, we were still an items business, and retailers were demanding properly merchandised lines and broader categories.

We needed to turn what was basically a garage operation into a real operating apparel business, or we were going to choke on the paper retailers were giving us.

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Instead of attempting a scale-up on the fly, which would have been madness and would have taxed us financially and mentally, we pulled the reigns on the business as it was leaping, and took a moment to compose ourselves.

We realized it was more important for us to grow in a sustainable and healthy way than to be reactionary and frantic.

We were lucky to find a licensor that found F54 complimentary to its business, and which shored-up some holes in its retail channels. They loved the brand, they were excited about it, and it was apparent that offloading the manufacturing, sales and distribution to a business with infrastructure and great experience was the solution to our challenges.

They can keep up with the operational demands, and we can manage the brand... a perfect relationship.

What are some of your top accounts now?

We're still supporting the same specialty surf and skate businesses: Jack's, Frog House, ET, Zumiez, Skatepark of Tampa.

Will the vibe of the brand, which I remember somewhat skate oriented, remain in the new arrangement?

We're not changing our brand identity or marketing focus whatsoever. We are expanding our vibe to a geographically broader set of the same type. Specialty skate and surf is what we are.

I wouldn't know how to be anything else, and I wouldn't want to be anything else. Thankfully, our customers dig us that way.

Why did you choose Advance Sports Inc.? What other action sports brands are they involved in?

They do stuff for Body Glove, Jet Pilot, some other big brands. We chose them because of two things: ability and enthusiasm.

They were really excited about slotting a core skate and surf brand into their stable, they liked what we were about, and we were impressed by their capabilities and coolness.

Are you relieved to have the operational support?

More than I can tell you.

Factor54 gets to realize its full potential now, and we get to keep all of our interest in the business. It's a great balance of talents, and everyone gets to do what he/she does best.