Fresh Produce prepared to sell equity to ratchet up growth, co-founder says
10 September 2019
Fresh Produce, a closely held women’s clothing company, is prepared to sell a minority or majority stake to help reach its goal of doubling sales within the next five years, co-founder Mary Ellen Vernon said.
Vernon, who founded the Boulder, Colorado-based company with her husband in 1984, said it would be receptive to selling to a buyer with financial means and operational knowhow that could help it expand rapidly. Failing that, she said the company would seek a funding round of around USD 10m or more to kick start growth.
The Vernons, who are still majority owners of the business, have taken a steady approach to grow the brand throughout its history, she said, but the company has realized that to fulfill its vision, outside capital is necessary. To date, Fresh Produce has been self-funded, aside from a minority deal with its fabric supplier a few years ago.
Fresh Produce began when Vernon and her husband, Thom, sold jewelry and colorful t-shirts outside a venue during the 1984 Summer Olympics in Los Angeles.
Its products are primarily made in the US, and include casual cotton t-shirts, dresses and shorts, and feature many vibrant colors. Though it makes clothing for all ages, its largest segment is ages 40-plus in extended sizes of 14 or larger, Vernon said.
An infusion of capital would help accelerate the growth of its e-commerce platform, marketing on social media and with influencers, and expanding other forms of marketing to increase its visibility among its core demographic. Vernon said she also hopes the company can secure more retail partners.
Fresh Produce now has about 200 employees and around USD 30m in annual revenue, she said. Its products are found at more than 500 independent retailers and larger stores like Macy’s, Nordstrom and Dillard’s. There are also five independently-owned Fresh Produce stores and 16 company-owned stores.
If the company is sold, Vernon said she could stay on in a creative role, but also would like time to devote to other methods of empowering women. She plans to finish writing a book and would look into doing a speaking tour or possibly starting another business. She noted that her two children, ages 23 and 25, have no interest in taking over the business as they plan to go their own way.
Fresh Produce at one point had about 30 company-owned stores, but Vernon said it had to downsize during the financial crisis. In a rapidly changing retail environment, she said she aims to keep the company dynamic by growing its e-commerce platform – she said e-commerce grew between 15% and 20% last year – and is in the midst of doing its first retail pop-up shop.
Currently, it has a popup store in East Hampton, New York, that will close on 15 September. Vernon said the company plans to do popups regularly, which will probably last a few months at a time.
The company does not expect to expand its permanent retail presence, but will keep its current footprint. It has stores in Arizona, California, Colorado, Florida, South Carolina and the US Virgin Islands, as well as the popup in East Hampton.
If Fresh Produce is sold, Vernon said it would like the buyer to uphold its themes of inclusivity and positivity. Companies comparable to Fresh Produce include Lilly Pulitzer, Chico’s, Anthropologie and Tommy Hilfiger’s women’s line, Vernon said. She noted that companies like Chico’s or Eileen Fisher could be logical buyers. Fresh Produce could also complement a number of apparel, footwear or other consumer companies, she said, such as an interior products supplier.
Fresh Produce’s external auditor is Denver-based EKS&H LLP and Boulder-based Hensley & Kennedy provides the company with legal counsel.
