A Letter to Shareholders From The Desk Of The CEO Of Respect Your Universe
VANCOUVER, British Columbia, Oct. 30, 2014 /PRNewswire/ -- Respect Your Universe, Inc. (OTCQB:RYUN) (TSX Venture: RYU.V) ("RYU") Five months ago, I was appointed President of RYU and tasked with creating a new regime. At that time RYU had 160,000 units of inventory stagnating on shelves, a high burn rate, inefficient logistics, a long supply chain, a lease in Portland, Oregon that was ill suited for our needs, an under-performing retail store, less than $1 million in annual sales and no positive cash flow.
Today, I'm pleased to announce that your new leadership team has executed a textbook turn-around. We've raised cash, cut costs, improved logistics and supply chain management, reduced inventory, increased gross margins and created a viable plan for growth and expansion.
RYU has reduced overhead from as high as $400k per month to $130k per month and sold over 73,000 units of existing inventory, increasing revenue and gross margins by working with major on-line retailers. Moving the old inventory is critical to the future profitability of RYU as we move to 'Just in Time' inventory with 8 cycles per year.
But that was just the beginning. We've negotiated out of the Portland lease, moved our operational headquarters to Vancouver, Canada, renegotiated better terms and costs with suppliers and manufacturers and increased gross margins. In May, we raised an equity financing of $3.5 million and recruited top fashion industry talent to bring our vision of game changing product to fruition.
Most importantly, we've firmly established the DNA for the brand, a dynamic culture for our organization and a strategic long-term vision for the business that provides a solid foundation for the brand to grow. We have filed a number of game-changing intellectual property patents that we believe will allow us to differentiate from our competitors.
From the day we took over, our new operation is sales motivated. It's all about building a brand and selling, and even while we are in transition mode, we're developing relationships behind the scenes that we believe will elevate our sales capacity to a level RYU has never experienced before.
With new cash and an experienced leadership team in place, RYU is now positioned to launch a new website projected to represent 30-40% of revenues by Spring 2015, is expanding through international brand license agreements, and anticipate launching new stores in the Fall of 2015 that will showcase a dynamic new apparel line and game changing product mix. Over the next five years, we have set our sights on continuing to develop retail outlet relationships built on the strength of our products and an established brand identity.
Key Personnel Changes
Alex Briglio, VP of Sales and Marketing: Alex's company Redlime Designworks and Marketing Ltd. has helped make Swany Canada, the #1 selling performance winter sport glove brand in North America for specialty sports stores. Led by Alex and his sales agent team, Swany Canada ascended from start up to its leading position. Alex has over 25 years of sales management, brand development and marketing experience in the sports industry and has worked with brands locally and internationally such as Helly Hansen, Scarpa, Deuter, and arranged programs for dealers such as Costco, MEC, Sport Chek, Sport Experts, REI, Blackcomb, Hudson Bay among hundreds of others.
Juliet Korver, Product Design Director: Ms. Korver's experience includes lululemon, O'Neill and Filmar where she developed private label products for top brands in the outdoor and performance sports markets including North Face, Vans, Marmot, Spider and Swix.
Damien Kelly, Head of Research and Design: As President of Bad Monkey Design, Mr. Kelly's clients include Thule, lululemon, Atomic, Simms Fishing, Race Face, Sitka, Blurr and Marmot.
Jameel Vaghela, CFO: A Chartered Accountant that has an extensive background in finance, accountancy, corporate taxation and financial markets. Previous roles include Big 4 assurance and advisory experiences at KPMG and PwC where he gained an understanding of the retail apparel sector. Most recently he was responsible for all financial activities related to G4S's aviation screening contract with the Canadian Air Transport Security Authority.
George Crookshank, Director of Strategic brand Development: George is an experienced, top-performing Vice President/Managing Director with over 20 years of business development, sales and marketing experience throughout North America on a wide range of local, national and international brands. An active listener with acute problem solving abilities that brings fresh thinking and innovative strategies to complex business challenges. Excellent decision making skills combined with strong leadership and motivational ability that emphasizes optimum staff performance and personal empowerment.
Past clients range from McDonald's Restaurants (USA), Toyota (Western Canada), General Motors (Western Canada), Ethical Funds, Rogers Communications, Vancouver Spine Surgery Institute, rare-earth, Project Marketing, Mission Hill Winery, Vancouver Canucks, Granville Island Brewing, Vancouver Grizzlies, Romer's Burger Bar, Ambleside Consulting, Sebastien & Co Fine Foods, Playground / Intrawest, General Motors Place, Kicking Horse Mtn Resort Perimeter Ltd, Vancouver Whitecaps, Westworks Construction Swiss Water Decaf.
We also announce the resignation of Manfred Vollmer as our Chief Operations Officer. We thank Mr. Vollmer for his contributions to RYU during this transition phase.
Key Advisors and Brand Strategy partners
Treya Klassen, VP Brand and Product Development: President of Performance Textiles, Ms. Klassen was formerly Director and President of AnK, a leading technical apparel manufacturer in Canada and Asia. AnK's clients included Polo RLX, lululemon, Eddie Bauer, Cabelas, Sitka, Gander Mountain, Department of National Defense, MEC and Arcteryx.
Key Performance Metrics
On our annual report on Form 10-K for the year ended December 31, 2013 and our interim report on Form 10-Q for the period ended June 30, 2014, we reported the following:
| As of June 30, 2014 |
As of December 31, 2013 |
|
| Cash |
$2,248,304 |
$252,153 |
| Net Inventory |
$1,550,065(1) |
$1,797,154(2) |
| Accounts payable and accrued liabilities |
$968,311 |
$1,603,852 |
| Total current liabilities |
$1,478,766 |
$1,744,771 |
| Total other liabilities |
$73,392 |
$581,680 |
| (1) |
Consists of current net inventory. |
| (2) |
Consists of $845,188 of current net inventory and $951,666 of non-current net inventory. |
About the Sports Apparel Sector
The sports apparel sector has been growing at a pace of $6 billion per year. RYU is focused on addressing the needs of the underserved multi-discipline athlete who values training, exercise, play and looking good. Multi-discipline athletes tend to participate in a wide variety of individual fitness activities including cross-fit, biking, walking/hiking, dance, aerobics, racquet sports, martial arts and weight training.
About RYU
Respect Your Universe Inc. is a global training and fitness apparel brand with origins in the movements and philosophy of martial artistry. Created specifically for the unique demands of the multi-discipline athlete, we exist to facilitate the best in human performance by delivering uncompromising style, comfort, durability and function for our athletes.
On Behalf of the Board
RESPECT YOUR UNIVERSE, INC.
Marcello Leone, CEO, President and Chairman of the Board
Forward-Looking Statements
Statements regarding we are now positioned to launch a new website projected to represent 30-40% of revenues by Spring 2015, we are expanding through international brand license agreements, our game-changing patent applications, and anticipate launching new stores in the Fall of 2015 are "forward-looking statements", which are subject to risks and uncertainties, which may cause the actual results, performance or achievements of RYU to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, among others, that RYU's business plan is dependent on additional financing, which it may be unable to obtain on terms acceptable to RYU, RYU may be unable to open any new stores, changes in general economic or market conditions that could impact consumer demand for RYU's products, and RYU's ability to execute on its business plan. Except as required by law, RYU undertakes no responsibility to update any of the forward-looking statements contained in this news release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Respect Your Universe, Inc.
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