Read how Peekaboo Beans Inc.’s (CSE:BEAN) considerable volume of inventory, recent financing and transition to an omni-channel model places the Company in an advantageous position
SmallCapPower | June 20, 2019: Peekaboo Beans Inc. (CSE:BEAN) (OTC Pink: PBBSF) offers an ethically sourced and environmentally-responsible clothing line that is designed for comfort, and to last, with operations in both Canada and the United States. In Canada, the children’s clothing market has a retail value of $3.7 Million and has grown at a compounded five-year annual growth rate (CAGR) of 2.9%. In comparison, the retail value of the children’s clothing market in the United States is US$33.9 Billion and has grown at CAGR of 2.4%. For reference, in the United States menswear retail value is growing at a CAGR of 3.4% and womenswear is growing at a CAGR of 1.9% (Passport, 2019).
On May 8, 2019, the Company announced a $400,000 financing at $0.10 per unit. The funds will be used for corporate development and general working capital purposes. This was increased on June 4, 2019 to 10,000,000 units for gross proceeds of $1,000,000. On the same date, the Company announced it closed the first tranche of the Private Placement, following to which it has issued an aggregate of 4,500,000 units for gross proceeds of $450,000.
Peekaboo Beans Inc’s Q2/19 financial results showed it had $217,438 in cash, $83,521 in receivables and $2.0 Million in inventories. The Company also has a current ratio of 1.49x, which is in line with the retail average of 1.47x (Wells Fargo Works, 2019). On May 30, 2019, the Company announced it raised net proceeds of about $723,000 in funding through financing and $275,000 through convertible notes.
Following Peekaboo Beans’ success to-date with “Stylists” and eCommerce, it has opened a permanent location in Tsawwassen Mills, British Columbia, on April 14, 2019. Additionally, the Company’s launch of its online Amazon store in March 2019, allows Peekaboo Beans to benefit from Amazon’s apparel platform, which is estimated to be worth $45 Billion to $85 Billion by 2020.
Peekaboo Beans Inc’s expansion to an omni-channel approach allows the Company to effectively reach more customers. Omni channel is a sales approach that allows customers to shop seamlessly through multiple channels, such as online, brick-and-mortar and over the phone. Kriti, a web marketing agency that is a part of WSI Network, reports that omni-channel retailers allow companies to see a 10% increase in revenue and an 8% decrease in cost per contact. Additionally, omni-channel retailers typically maintain 91% of its customers. The Company reported on January 30, 2019, that its switch to an omni-channel business model is expected to decrease operational costs by about $450,000 per year by lowering payroll and software expenses, among others.
In May 2019, Peekaboo Beans CEO Traci Costa, in an interview with SmallCapPower, said that due to the Company’s new business plan, Peekaboo has been able to retain a 52% returning customer rate compared to typical rates that are in range of 20-40%. Management believes this retention rate is driven by a progression of how Millennials like to shop using various channels.
Peekaboo Beans has also started to increase its recurring revenue with new online initiatives. The Company has already released its Bean Club membership for $49 per year, which currently has more than 2,000 members. With this membership, customers are given 15% off their purchase and free shipping. A report from V12 Data referenced in the Company’s press release on January 30, 2019, has indicated that 78% of Millennials are predicted to be more likely to choose a brand that has a reward or loyalty program.
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