The shopping spree continues at A.k.a. Brands.
Earlier this month, the fashion holding company acquired Los Angeles-based direct-to-consumer men’s streetwear brand Mnml for $48.6 million. The deal, a combination of cash and equity, is the latest acquisition in A.k.a.’s growing list of digital brands, one that already includes Princess Polly, Petal + Pup, Culture Kings and Rebdolls.
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“Everything about this brand was just a perfect fit with our portfolio,” Jill Ramsey, chief executive officer of San Francisco-based A.k.a. Brands, told WWD in an exclusive interview. “These guys are growing faster than the market; they’re very profitable, have double-digit EBITA margins, a strong loyal following, a really strong founder team and a lot of continued head room for growth. And they use a data-driven approach to merchandising, which helps them have their finger on the pulse of what’s hot and what’s cool in streetwear fashion. So it kind of checked all the boxes of things we look for in potential brand targets.”
Mnml, pronounced “minimal,” generated net revenues of nearly $20 million in fiscal year 2020 and is operating profitably — two of A.k.a.’s other requirements. On top of that, year-to-date, Mnml has had double-digit net revenue growth. Still, only about 20 percent of those sales came from outside the U.S.
Matthew Fields, who founded Mnml in 2016 and serves as CEO, said the acquisition is a fitting way to continue scaling the business, both at home and abroad.
“We are confident that our customers and our brand will benefit from A.k.a. Brands’ highly skilled leadership team and their extensive experience scaling successful e-commerce businesses while preserving brand authenticity,” said Fields, who will continue to lead the brand under A.k.a. “We are excited to join the other great brands in the A.k.a. portfolio and work closely with Culture Kings to create value and opportunities for both of our businesses.”
Ramsey said the acquisition of Mnml helps balance out the assortment of Australian streetwear brand Culture Kings, which A.k.a. acquired in March.
“Mnml is very good at denim and bottoms, which we see as a perfect complement to our Culture Kings brand. And Culture Kings is a global leader in streetwear hats and hoodies and T-shirts and sneakers. There’s a really nice synergy there,” she explained. “The Mnml brand will really resonate with our existing streetwear customers in Australia. And similarly, Mnml will help introduce Culture Kings into the U.S. market. So there’s a ton of cross-marketing and cross-merchandising value for us in this acquisition.”
Mnml will be sold through Culture Kings’ stores and website in the U.S. and Australia, in addition to Mnml.la and Mnml’s mobile platforms.
Meanwhile, A.k.a. Brands, which is backed by private equity firm Summit Partners, recently went public as it continues to add new brands to the portfolio.
“We would like to add one to two really select strategic acquisitions annually,” Ramsey said. “M&A is really a balance of having a strategic, prioritized framework, as well as being opportunistic, as great opportunities present themselves. Because you never want to miss an interesting opportunity. And sometimes the interesting thing about acquiring brands is that there’s a timing component to it as well. Just because we’re interested and ready to buy a brand doesn’t mean that a founder is ready to give up control of their company. So M&A is very much a timing game as well.
“And we are really focused on those social-media lead, next generation brands that are just really good at content and building loyal followings on social media,” the CEO continued. “But sometimes these younger brands can struggle to scale, which is really where A.k.a. comes in and helps them. We support them with the business of fashion, so they can stay focused on the art of fashion. We provide extra corporate oversight with things like finance, tech and supply chain, so the brands can double down on front-end customer-facing things, like merchandising and marketing and social media.”
Ramsey, an e-commerce veteran whose 20-year career in retail includes leadership positions at Walmart, eBay and Macy’s, took over the helm of A.k.a in May 2020, changing the name from Excelerate Brands to A.k.a. Brands along the way.
“I chose to rebrand us as A.k.a., with the intentional meaning that we’re known as our brands. Customers know and love our brands, not A.k.a.,” she said. “And as a group of brands we’re better together. We can reach broader audiences, achieve more scale and enhance profitability as a group. Our model is to grow our existing group of brands. But we are also constantly shopping for the world’s best brands to keep adding to the portfolio. Each one of these brands is really targeting a different audience of Gen Z and Millennial customers, whether they complement our group by expanding us into a new category, a new target demo or new geography.
“Today, you see some major landscape shifts happening in e-commerce,” Ramsey continued. “The first 20 years of e-commerce, if you wanted to be in e-commerce, you had to build your own technology. There were no third-party solutions. That’s not really true anymore. With fantastic third-party technology options, like Shopify and the large ecosystem of digital e-commerce technology partners, today, young brands can start on third-party technology and really focus on the front-end customer experience. And what it is giving rise to is a whole generation of smaller brands that are going to be able to be very tailored to a customer audience and really lean into knowing and loving their unique customer segment. That is completely changing the game in e-commerce.”