Digital Brands Group, Inc. Poised To Create An Apparel Company Juggernaut

By: Newsfile

Digital Brands Group, Inc.'s digital consumer-focused approach to high-fashion is changing the way bespoke apparel gets sold. Its completed $10 million IPO could create a mega-brand juggernaut, says Soulstring Media.

Miami Beach, Florida--(Newsfile Corp. - June 1, 2021) - Digital Brands Group, Inc. (NASDAQ: DBGI) is on a mission to change the way high fashion apparel gets sold. Better still, they believe they have a strategy in place that will not only create an apparel company juggernaut but, with innovation and technology added to the mix, will maximize profits for its shareholders through a low overhead, high margin business model. As a publicly traded company, that's crucial. Most importantly, with DBGI having completed its $10 million IPO, that mission has begun.

Last week, CEO Hil Davis presented a compelling overview of his strategy at the Emerging Growth Conference 8, highlighting how his forward-thinking digitally-focused apparel company is changing the rules for how high-fashion is sourced, created, and sold. And with ample cash in the bank following his completed IPO, his success at acquiring compelling brands is quickly adding to an already impressive apparel brand portfolio. Even better, the mission to create accretive value through acquisition is not slowing down.

Indeed, DBGI is intriguing the markets. And by seizing upon what they believe is an enormous digitally-inspired niche opportunity, they could prove once and for all that the brick and mortar approach to retail is taking its last gasps of market dominance.

Digital Approach Accelerates Growth

Although Digital Brands Group isn't the pioneer of direct-to-consumer sales, its way of developing and enhancing the strategy is. And to make sure they hit the business ground running, as part of its IPO, DBGI simultaneously acquired Harper and Jones, LLC., a custom and made-to-measure suiting and sportswear company that offers full-closet customization options. While that inaugural asset starts the revenue-generating machine, DBGI has been clear that its ambitions to acquire accretive distinguished brands are just getting started. But not just any brand.

Digital Brands Group wants to acquire quality brands that can be sourced, developed, and sold at high margins. In fact, three brands already under management are bringing fashion-forward, socially conscious, bespoke designs direct to the consumer. A deeper look into one of them exemplifies how DBGI can market high-quality, red-carpet fashions at aggressively low prices by cutting out the intermediaries.

Its Baily44 line of apparel, for instance, combines form with style by taking influence and inspiration from LA's urban architecture and iconic landscapes. More importantly, from the DBGI perspective, its attire is influenced by modern details, classic elements, and bespoke designs that combine beautiful, luxe fabrics and on-trend designs that create sophisticated ready-to-wear capsules for women on the go. Its Lily Top, for instance, uses only sculpted vegan leather to make a sleeveless top with ponte knit back and zip closure. The garment is a shopper favorite that takes comfort, design, and social consciousness to a higher level. Still, while its designs are attractive on multiple creative levels, investors want bottom-line results. Baily44 is a line that delivers both.

Of course, it's only one brand in a company with several, with plans to add dozens more in the coming quarters. That attention to creating sustainable value is what attracted investor attention.

A Digitally Focused Business Model In A Billion-Dollar Sector

Investors may like the apparel, but chances are they invested in DBGI to make money. Targeting that expectation, Digital Brands is on the move to create shareholder value through a streamlined, low overhead, vertically integrated business that controls a transaction from procurement to sale. That means there are very few, if any, intermediaries that touch the product and drive up costs.

Better still, DBGI is leveraging a business strategy that can on-board and offer numerous brands on a direct-to-consumer and wholesale basis by utilizing its founding method to be successful as a digitally native-first vertical brand. So, what does that mean?

In simple terms, digital native-first brands are brands founded as e-commerce driven businesses, with online sales being the significant contributor to revenues. As these brands get more popular, they sometimes expand into wholesale or direct retail channels. However, unlike typical e-commerce businesses, like online sellers Naked Brands, Inc. and L Brands, Inc., Digital Brands Group, acting as a digitally native vertical operation, controls its own distribution, sources its products straight from its third-party manufacturers, and sells directly to the end consumer. Thus, the model lends itself to high margin, low overhead sales.

Building A Client Base

Still, DBGI knows it needs more than a great product to succeed. Knowing this, they utilize technology to cultivate their client base, focusing on owning the customer's "closet share" by leveraging shared data and purchasing history to create personalized, targeted content and styles for that specific customer.

In other words, DBGI is taking steps to increase buyer loyalty and perhaps even become a shopper's personal stylist. At its best, the DBGI approach to sales keeps a "digital salesperson" working 24/7 to bring fashion to its customer, thereby keeping its base engaged. Again, digital outreach may not be a new approach to sales, but DBGI is certainly maximizing its value.

Best of all, its initiatives share a common goal- make DBGI into a much larger company. And with each brand creating intrinsic value, appropriating its cash wisely could fuel near-term growth by equally developing each business segment. Plus, having access to capital as a public market perk will allow DBGI to quickly capitalize on changing market dynamics and stay ahead of the pack as an agile, technically savvy company.

Still, the model isn't exclusively online. DBGI strategically expanded into an OmniChannel brand, offering styles and content online and at selected wholesale and retail storefronts. The strategy here is to capitalize on peripheral opportunities that can successfully drive Lifetime Value ("LTV") while increasing new customer growth.

Added at the right time and right place, these locations can add considerable revenues to the company. Still, don't consider DBGI as a brick-and-mortar development company. These locations are strategic, low overhead operations designed to complement and develop its online market. Remember, with a public float as small as DBGI's, the company can prudently utilize its treasury to expand its business without distorting its primary business strategy.

Now, with money in the bank and impressive lines of apparel already in its portfolio, DBGI is taking advantage of a consumer products and apparel market that is expected to surge in the back half of the year as COVID restrictions finally ease. Analysts expect that pent-up demand, combined with stimulus money, will fuel one of the sharpest and most profitable snap-back rallies ever. As people return to work, the apparel and hospitality sectors are positioned to be prime beneficiaries.

The excellent news is that economic data shows that trend is already gaining traction.

Digitally Focused Business Strategy Changes Apparel Markets

Indeed, Digital Brands Group is expanding its presence at the right time. While they can point to a history of pre-ICO success, investors are now focused on what the company can do today, tomorrow, and next week as a post-ICO company. In other words, performance now matters 100% of the time.

Perhaps the best asset to meet those challenges is its experienced management team that understands style, logistics, social media, and its consumers, in general. And being tuned in to environmental issues helps tremendously as well.

And that being the case, expect the post-IPO Digital Brands Group to prove its point. Offering the highest quality, socially conscious brands can do more than produce healthy near-term can help create a company-owned, digitally-focused apparel juggernaut.

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