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Why KITH Could IPO

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I don’t know the numbers of Ronnie Fieg’s private business, but a close analysis of the brand and the man shows that if Ronnie Fieg decided to take KITH public he could garner an IPO in the 35-45 dollar range. As a comparison Under Armour’s initial IPO was 13.00. It immediately jumped up into the mid 30s the following day and has remained there. When analyzing UA, the sports component of providing compression gear that didn’t rival Nike’s dominance in footwear and apparel gave the brand an opening and the filled it with a solid roster of marketing talent and a reach that showed how effective it is to know players at the professional level.

KITH currently has 120,000 Twitter Followers. Ronnie Fieg has 109,000. On Instagram KITH has 675,000 followers. Fieg has 446k. On Facebook KITH has 85000 followers. What does a follower on Instagram mean? Nothing, but it definitely shows that KITHs brand and leader is influential. This year things actually turned for the brand as they launched Kithland during NYFW:

Kithland launch has been regarded as one of the best shows of NYFW: http://footwearnews.com/2016/focus/athletic-outdoor/ronnie-fieg-kith-kithland-new-york-fashion-week-adidas-new-balance-asics-timberland-fracap-256818/

With Under Armour as a baseline, a comparison like this is measurable. But what exactly is it about Kith that has inspired me to discuss the potential of acquisition or public offering?

  1. Brand Cache – It is extremely difficult to capture the minds of the 16-25 year old demographic that is the target of most athletic companies. Kith has been able to build its rapport with this audience through a barrage of collaborations. All of which have gone on to sell out and demand a high number in the resale market. That resale value translates into currency and Kith’s influence is extremely strong in streetwear and has crossed over and become just as influential in the fashion industry.
  2. Multichannel Sales- Pureplay retail is not as strong as it has been and Kith has taken care of themselves in the retail space. Their merchandising is legendary. If cool was a store it would be Kith. Along with their retail locations in the heart of NYC, they have had Pop Up shops that have sold merchandise out quickly in locations like Tokyo. Here is an article on a recent pop-up: http://ny.racked.com/2016/7/18/12192030/nike-kith-pop-up-nyc-august-2016
  3. Brands that Kith aligns with that have trouble moving their own product are given relevance and importance. Consider this an Asics Gel Lyte from Asics is constantly on sale. While on the same sales channel an Asics Ronnie Fieg/Kith garners a 900 dollar price tag.
  4. Their ability primarily is in the marketing space. Kith understands the shifts in the trends. They actually set the shifts. They also realize that a website is no longer a static storefront. This is something New Balance, Asics, Saucony, Ewing, and other brands have failed to grasp. Nike understands this and is heavily involved in the generation of content both visual and written. Ronnie Fieg’s Kith site shifts from blog, to an Instagram type site up from day to day.

Why would Kith even consider an IPO if their success appears to be as good as it is private? I don’t know, but I’m into making prognostications. Oh, I forgot my 5th reason. Kith has moved squarely into the promotion of its own private label. This shift has allowed them to gain a market share and an increase in revenue for the brand. Kith is no longer just a dope ass retail spot reselling other brands, they are releasing clothing that is selling out immediately. Increasing their overall profit margin and getting a taste of what it’s like to grab that retail value on products created in house.  The upcoming Kith96 release can stand squarely against any brands fall offerings and could potentially crush the competition simply based on the fact that it lands squarely in the moment of retro while everyone else is still looking at joggers and skinny jeans.

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The LOX for KITH96