Sabot Hill, Seasoned Executives in Footwear and Small- and Mid-Market Financial & Operational Management
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THRYV™ The first premium healthcare footwear brand UNCOMPROMISING STYLE IN WELLNESS™ Sabot Hill Group, LLC 978-973-1451 Sabot Hill Group, LLC THE OVERVIEW of THRYV™ UNCOMPROMISING STYLE IN WELLNESS™ Investment Considerations THRYV unites want-to-wear style with need-to-wear therapeutic construction. There are 29.3mm diabetic consumers in America. (CDC) o That population will surge to 35mm in the next 20 years. o The U.S marketplace is conservatively estimated to be $300mm annually. ● Many diabetics are making bad decisions, choosing style over function, and putting their health at risk. o Diabetics must take extraordinary care of their feet to live a full life. o The Medicare reimbursement sales model is broken. Our Insight: Affluent diabetics are the forgotten demographic. o According to the U.S. Census, 40% of diabetics have the means and taste level to buy better grade footwear, and are seeking alternatives. o Our platform offers footwear that marries taste, style and diabetic function. We unite a patentable want-to-wear style with need-to-wear therapeutic construction. o No competitor meets this standard or addresses this high profit opportunity. There are 3 distinct distribution channels we’ll attack: Web, Retail and Practitioner. o Web - or vertical sales - will yield significant gross margin dollars as well as drive specialty retail’s trail and stocking. o Specialty retailers enthusiastically support exclusive, keystone + programs. o Practitioners are looking for an alternitive to ugly, therapeutic footwear solutions. o Sales will be evenly split by gender, and is expected to be 50/50 men-to-women. o Product strategy includes a propiritary D3 sizing methodology that industry practitioners (influencers) embrace and we believe to be patentable. Founders are accomplished in the footwear space. o Andy Simonds is a 20 year footwear industry veteran, including time at New Balance Athletic Shoe, and has spent 10+ years in healthcare footwear space. He’s an expert in brand management and product development. o NorthStar Management Partners are associates in Sabot Hill, seasoned executives in footwear and small- and mid-market financial & operational management. Thryv expects to capture a MINIMUM of 2% of this market within 5 years. o $15mm annual revenues within five years. o EBITDA is expected will be 15% in five years. o Produce 235,000 pair annually. The plan provides that 100% of the initial investment will be available to return to investors in 54 months and an ROI of ~500% based on a conservitive 4x EBITDA valuation at 60 months. Call to Action: We are petitioning for $1.8mm in equity investment. Winter 2015 Page 2 Sabot Hill Group, LLC The Situation: Diabetics must take care of their feet to live a full and healthy life. The main circumstance of diabetes is neuropathy of the extremities or a loss of circulation and sensation in their legs and feet. Neglect of foot care, like wearing poorly fitted shoes, can lead to blisters, wounds and ultimately ulcerations and infections and in extreme cases, amputation. This population fears for their long term health and mobility, almost as much as they fear being considered or perceived as old. They are looking for footwear solutions for their health, comfort and sense of self-worth and need to break the compromise of ugly “medical” shoes that fit and fashion forward shoes that don’t. The conventional view of this market is that diabetics are poor and sedentary and plan to use Medicare subsidies to get free shoes, but the fact is that 40% of diabetics are affluent according to the US Census standards (or consumers with an annual household income over US$60,000). Positioning: Two words capture Thryv brand’s aspirations: uncompromising wellness. These simple themes are the cornerstone of our brand (The name “Thryv” is a placeholder - once funded, we will either validate “Thryv” or create an appropriate brand name. A creating brand standard is a task for marketing professionals –this management is experienced in driving marketing agency relationships to create new brands and standards). Diabetics are looking to live longer and in better health than any previous generation. Thryv brand breaks the compromise between medical/functional (ugly) footwear and fashion forward styling. It will be differentiated from traditional therapeutic competitors by offering a more consumer friendly wellness/preventative message, and separate itself from comfort brands that cannot offer precision fit. It’s comfort that fits! Customer & Consumer Base and Market Acceptance Channels: We will launch the brand BOTH vertically - direct-to-consumer - and traditionally through high service, sit & fit retailers who can deliver the precision fit promise. Delivering precision fit is a “high touch” proposition making high quality consumer and customer service a keystone in delivering the brand promise. Vertical: Our goal is to have a minimum of 25% of sales through online sales. We will build a powerful e-commerce website that explains the brand promise, describes its products features and benefits, and provides direct-to-consumers sales opportunities. Well-trained Customer Service Representatives (“CSRs”) will spend the time necessary to help consumers to precisely fit shoes and work with them to be sure that fit works for the long term. We will aggressively pursue target consumers and drive trial and purchase. We will also target a subset audience - the diabetic caregiver - generally a family member or medical professional who has a powerful influence over treatment and ongoing care of diabetes sufferers. Segments of the population, such as affluent diabetics, are easy to find online and market directly to by using the power of web-based research and outreach, and by using and SEO/SEM/PPC marketing. Retail: The Store-in-Store model will drive dealer support. The target retail channel is the “sit & fit” dealers that provide “high touch”, full service for specialty footwear. These dealers are high value influencers in their marketplace and generally members of the National Shoe Retailers Association. This segment buys and holds inventory and forecasts their future product needs. They expect pricing programs to offer keystone plus $10 margins and substantial marketing support. Our intent is to build aggressive rebates and sales incentives to attract and keep these dealers as customers. Limited distribution, sell-in, sell-through and restocking programs, as well as flexible manufacturing programs that keep the right products in stock, will attract and keep dealers dedicated to the brand. These dealers are seeking branded footwear solutions for health oriented consumers. Winter 2015 Page 3 Sabot Hill Group, LLC Who is NSRA?: From their website www.nsra.org: Today, the typical NSRA member owns two to four stores, employs seven full-time- equivalent employees per store and carries an inventory that tops $250,000+, with an average per-pair price of $135. Most members sell shoes for adults and children, as well as accessories and add-ons. Many NSRA members have a website, which they use for both e-commerce and as a quick and easy information place for regular customers. As retailers, NSRA members stay competitive through high-quality and focused customer service: Store employees know their products and their customers, and take pride in measuring and fitting their customers properly. The typical NSRA member’s goal is to make sure the customer is pleased, not only with the purchased product, but also with the overall purchasing experience. Together, independent retailers make up approximately 20% of U.S. footwear retail sales, conducting more than $7.4 billion worth of business in a $54 billion per year industry. Practitioners: The medical practitioner channel is made up of approximately 3,000 Orthopedic & Prosthetic facilities, Durable Medical Equipment suppliers, Podiatrists and Certified Pedorthist's offices, all commonly referred to as “practitioners”. This channel is comprised of “care givers” who purchase products on an as-needed basis based on immediate patient requirements, and has its own population of influencer, or product guru’s, that build trends and create market acceptance. We will select a small group of high value guru’s that will build brand acceptance in the medical channel. They do not hold inventory and do not forecast future needs, but use suppliers’ warehouses as their own, expecting suppliers to be in stock. It is our intent to allocate a portion of the line as locker-stock or “never out” inventory to select/key partnership accounts. Product: The unique selling proposition is based on precision fit footwear. We offer shoes in multiple widths, multiple depths and in ½ sizes. This is a distinctive offering that diabetics must take advantage of for continued health. We are dedicated to supporting retail partners, medical and pedorthic dealers, by providing precision fitting shoes to every consumer seeking a high quality, perfect fit. Thryv brand has a proprietary, 3 depth fitting system that we believe to be patentable. Every style will be available in 3 depths, 3 widths and a minimum of 14 sizes (women) and 15 sizes (men). Thryv brand construction DNA includes, but is not limited to, these features: ● Fitting: ½ sizes, 3-5 widths and 3 depth options make Thryv brand the go-to product. ● Heel counter: Long, firm, asymmetrical inside counter for control ● Cup sole with 2.5mil recess for “hidden” extra depth. ● Collar height: Consistent and asymmetrical collar heights for proper fit ● Comfort: Padded collar & tongue for comfort. ● Soles: Biomechanically designed outsoles for easy gait ● Smooth Linings: Seamless lining construction ● Inserts and foot-beds: Proprietary design for comfort and longevity ● Removable Insoles: Full length, removable anatomical insole Winter 2015 Page 4 Sabot Hill Group, LLC ● Breathable: Materials in linings are breathable ● Orthotic ready: Easily accommodates custom orthotics ● Micro-fit Shim: An additional 1/8th micro fit shim is in every box Price points: $120 to $280 - We plan to offer shoes at competitive Euro-comfort price points.