VANCOUVER, BC, June 15, 2021 /CNW/ - RYU Apparel Inc.
(TSXV: RYU) (OTCQB: RYPPF) (FWB: RYAA) ("RYU" or the "Company"),
creator of award-winning apparel that facilitates human movement,
is pleased to share a mid-year update for RYU.
DEAR FELLOW SHAREHOLDERS & INVESTMENT COMMUNITY,
As we approach the halfway mark of 2021 RYU has achieved a great
deal in building the foundation for long-term growth.
2020 was a humbling year to say the least, the economic
down-turn forced brands to cut costs, re-evaluate priorities and
accelerate digital channels. RYU significantly reduced retail costs
and made one significant investment in an attempt to grow brand
awareness, but softened its focus on product and demand creation in
a time of rapidly changing consumer behaviors. The losses incurred
in 2020 were significantly lower than in prior years, thanks to
lower head office costs and lease terminations. With 2020 in the
rear-view mirror, our impetus now shifts towards targeted
investment in product and demand creation.
We are in the midst of building an organization of industry
veterans, exceptional creative minds and external agency partners
that will bring the focus back to crafting world-class products
and creating demand for these products. Since February this
year, the team has developed four strategic pillars to set RYU on a
sustained growth trajectory. These plans will begin to take root in
the second half of this year. Over the next three years, RYU will
not only differentiate itself in this large, saturated performance
apparel industry, but will become an iconic brand leader that
resonates across generations. We will deliver shareholder value by
maintaining a lean, yet highly effective organization and investing
capital raised directly into demand and product creation. We have
set gross margin targets of >70% and a five-year CAGR of
>80%.
1) LEAN ORGANIZATION: Our goal is to achieve
an operating ratio of <50% over the next 36 months, without
losing site of the need to build an organization that will drive
brand desire. Led by exceptional creative we will craft powerful
brand stories that will become the inception of our demand creation
process. A newly appointed Brand Executive Creative Director
will assume brand creative lead and will work in concert with
creative powerhouse Mother LA (pending final engagement
agreement) to build an authentic voice and consumer
acquisition strategy.
As interim Product Creative Director, I will oversee the
aesthetic transformation of RYU into a highly curated assortment of
re-invented classic sports silhouettes, that will remain timeless
and spark joy in hearts of our core audience. We have re-imagined
our product creation engine, streamlined the supply chain,
implemented a new Product Line Management (PLM) system and
"category killer" line product line architecture that will
drive style productivity and profitability. A new
Go-to-Market process will allow RYU to increase speed and frequency
of product newness to consumers.
Our eCommerce division is undergoing an in-depth audit
and restructure of key performance indicators on traffic,
conversion rates, search engine optimization (SEO) and search
engine marketing (SEM).
A new retail model will take flight in 2023 with a small
footprint experiential model of retail that allows for a seamless
omni-channel "click and collect" model. This model is being built
as a hybrid of large format experiential retail and small
dispensary type formats. The model will allow for geographic
customization in design from the consumer data collected from
eCommerce. This model will also increase productivity, targeting
$1,500-$2,500 sales per sq ft with lower comparative
overhead.
2) BRAND: "Movement Matters" is our governing
mantra, leading to the establishment of brand positioning, target
audience and creative voice for all visual assets. Corporate
governance for how we talk, how we behave and how we look. This not
only filters through consumer facing assets, but also how we
recruit, who we recruit and how we act internally. As well as
developing and implementing overarching brand guidelines, we have
established a creative briefing and internal/external review and
production process. This will allow our team to maintain creative
integrity, production quality and brand consistency across all
marketing and branding campaigns and asset production.
3) PRODUCT: We have re-imagined the product
creation strategy centered on our consumer. This highly productive
line architecture will be made up of curated and considered core
styles. The product strategy will move RYU from a traditional,
seasonal and transactional business model to a design led
organization hyper-focused on creating desire in product that sells
in volume. We still maintain the need for newness with specific
emotional color and art injections, while creating long-lasting and
ethical products that perform in multiple activities. This
"category killer" business will build into our CULTURE OF MOVEMENT.
The newly implemented go-to-market strategy will increase speed to
market from 18 months to 9-12 months. The increased frequency
of new product introductions will support an enhanced consumer
experience in store and online channels. This also allows us
to grow our profitability, through a streamlined vendor base and
economies of scale on fabric, trims, and labor.
Foundational product architecture building blocks include
Outerwear, Mid-layers, First layer Performance Tops, Shorts,
Pants/Tights, Sports Bras, Headwear and Bags.
We have also partnered with key technology providers such as
Noble Biomaterials, 37.5 performance enhancing materials, Polartec,
Nylstar and Schoeller textiles driven by our consumer and our own
strict environmental standards.
We will also develop a highly transparent supply chain and
corporate social responsibility strategy based on our desire to not
only deliver shareholder return but also ensure that our
environmental impact is minimized as much as
possible.
4) DIGITAL: Create an online experience that
provides consumers with a seamless and consistent brand message
across all touchpoints within the RYU ecosystem. We have brought on
board seasoned eCommerce industry leadership with a proven track
record of sustainable double digital growth with Athletic, Outdoor
and Lifestyle brands. The new team will provide advanced analytics,
monitor acquisition channels, sales funnels and consumer behavior
to meet and exceed brand and sales metrics. Decisive action has
already been taken to grow into the areas of paid advertising, SEO
and SEM, as well as integrated campaign and eCommerce leadership.
These actions have already driven gains of +77% increases in weekly
online sales.
Supporting our digital strategy, we will also be implementing an
in-depth quarterly catalogue program to help drive brand awareness
and sales. We will bring the RYU brand into the homes of our target
audience with meaningful stories, thought provoking ideas and
relevant information. Industry data has shown that high-quality,
content-rich catalogues are a major contributor to growing consumer
base and increasing eCommerce conversion rates.
Entering 2022, all four of these pillars will be in full flight,
with the product development being the final cornerstone in the
foundation for sustainable growth.
During the second half of 2021 we will accelerate revenue growth
through FW21 key item reorders and new color drops. We have also
added a Central America knit
manufacturer to our supply chain to deliver high margin (duty
free), high-energy quick strike tee and fleece programs.
Additionally, we will soft launch our new brand position and
identify through the "Give a Little Respect" campaign starting in
July to drive traffic and increase conversion
rates.
Our financial plans are being finalized through a 5-phase
approach culminating in 2025 with a $50M net revenue target. As we grow the top line
and create more efficiencies within our operating expenses, we
intend to achieve an operating ratio <35% and $15M+ in
EBITDA.
The future is bright, and we are putting the pieces in place for
a once in a decade brand emergence. As we expand our eCommerce
model, reinvigorate our retail, and unlock our women's category the
RYU brand is poised to be the next great global brand story to come
out of Vancouver.
The true potential of the RYU brand is the exceptional group of
people driving it forward. We have built a common vision for the
future and relish the opportunity to overcome the challenges that
we will undoubtably face as we achieve our growth objectives.
I conclude by expressing my deep gratitude to our customers who
have stood by us through the pandemic, our shareholders, and the
board for the continued support and council.
Sincerely,
Rob Blair
COO
About RYU Apparel
RYU Apparel (TSXV: RYU, OTCQB: RYPPF), or Respect Your Universe,
is an award winning urban athletic apparel and accessories
brand engineered for active lifestyles. Designed without compromise
for fit, comfort, and durability, RYU exists to facilitate optimal
human performance. For more information, please visit the RYU
website at: http://ryu.com
Forward Looking Statements Disclaimer
Neither the TSX Venture Exchange Inc. nor its Regulation
Service Provider (as that term is defined in the policies of the
TSX Venture Exchange Inc.) accepts responsibility for the adequacy
or accuracy of this press release.
This news release contains forward-looking information that
involves various risks and uncertainties regarding future events.
Such forward-looking information can include without limitation
statements based on current expectations involving a number of
risks and uncertainties and are not guarantees of future
performance of Mother LA, revenue projections, margin or EBITA
targets. In addition, there is not guarantee of the future
performance of Ecommerce or Brick and Mortar retail revenue,
new collections, production launches, sustainability targets,
strategy implementation or current or future collaborations. Such
statements as regarding the development and implementation of
product placement in the series, celebrity product seeding,
viewership or the increase of RYU's visibility to investor, viewers
or customers. There are numerous risks and uncertainties that could
cause actual results and RYU's plans and objectives to differ
materially from those expressed in the forward-looking information,
including those arising from the COVID-19 pandemic or otherwise,
and which may result in the inability to develop and/or implement a
comprehensive investor relations strategy and/or enhancement of RYU
awareness with the investment community, including any capital
market strategy, the investor relations providers failing to deploy
their best-in-class platforms or to otherwise communicate any
compelling value proposition of RYU, the failure of the campaign to
highlight renewal of the RYU brand and subsequent successes under
the its CEO, the possibility that RYU does not achieve positive
cash flow operations. Except as required by law, RYU does not
intend to update these forward-looking statements.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/ryu-apparel-inc-provides-growth-strategy-update-from-coo-rob-blair-301312616.html
SOURCE RYU Apparel Inc.
