Peekaboo Beans (TSXV:BEAN,CSE:BEAN) U.S. Expansion Will Drive Its Bottom Line

    Peekaboo Beans Inc. (TSXV:BEAN,CSE:BEAN) recorded the biggest jump in stylist recruitment in the Company’s history in January along with a 108% year-over-year surge in sales

    Vasudha Sharma | March 29, 2018 | SmallCapPower: 2018 is proving to be a good year for Peekaboo Beans Inc. (TSXV:BEAN)(CSE:BEAN), a Canadian children’s apparel brand that sells active play-wear through a direct-sales network of independent sales representatives, called “Stylists.”

    This month, the Company raised $2.2 million in a brokered private placement of over 2.9 million shares at $0.75 apiece. Co-led by Canaccord Genuity Corp. and Gravitas Securities Inc., Peekaboo Beans went to the market with a target to raise $1.5 million but the offering went on to be oversubscribed.

    “We are excited about utilizing these funds towards our U.S. expansion efforts,” remarks Traci Costa, the President and CEO of Peekaboo Beans. “From a pure investor standpoint, the Company is built on solid fundamentals and it has the right share structure, which is very appealing to our investor base. With our last closing, we have brought in strategic Private Equity investors who are in it for the growth,” she adds.

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    U.S. Stylist Recruitment Outpaces Canadian Growth

    In January 2018, Peekaboo Beans reported the largest jump in stylist recruitment in the Company’s history, with an increase of 1600% in the first half of the month. A Peekaboo Beans Play Stylist is a sales representative who hosts at-home, pop-up shops, children’s play dates, or online events to help parents shop at their convenience.

    Peekaboo Beans also recorded a 108% year-over-year surge in January sales month to date. The Company entered the U.S market last September and has since expanded across 34 states, with an infrastructure to recruit and sell. Consequently, the U.S. market accounted for 24% of the reported sales uptick in January.

    We are in a favourable position to organically grow within the next three to four years into a $50 million company. The direct sales industry is a $36 billion industry. That means $36 billion worth of products are sold through this distribution model every year. And there’s only one other company in the United States that sells children’s apparel through this type of distribution. The children’s apparel space is a $10 billion market space. So, we believe that even if we own 1% of that market space that shows massive potential.”

    Even as it ramps up its presence in the U.S., Peekaboo Beans continues to add new representatives in Canada as well. Ms. Costa states, “There’s still a lot more room in Canada to grow. It is a really exciting time for us.”

    Peekaboo Beans, a Global Brand?

    For the next 12 to 18 months, Ms. Costa says Peekaboo Beans is focused on improving its growth margins and increasing the number of Stylists to grow their revenues. And expects the U.S. market to help drive up their bottom line.

    “We launched a ‘Petite Boutique in a Box’, which is a $49 kit, in January as an accessible entry-point in the U.S. We had 250 people join Peekaboo Beans through that initiative. That amount was the most we ever recruited. In fact, it was more than what we recruited the entire year last year,” shares Ms. Costa. “It was just proof that there is a vast opportunity for this type of business. In fact, one in seven households have a direct sales business in the U.S.”

    Ms. Costa sees the potential in Peekaboo Beans to go global. I want to be an international brand,” she says. “We’re currently looking at Japan, but we’ll look at Australia and Europe. And continue to grow. There are a lot of international markets that we would like to tap into. And play transcends children, culture, race, ethnicities, politics, and religion. So, play is the language that we want to spread across the world,” she says.

    Hiring Top Talent to Steer U.S. Expansion

    Towards the close of 2017, Peekaboo Beans hired top industry experts with experience in the U.S. market to guide the Company’s trajectory in this next phase of growth. To grow the Stylists network across North America, a Director of Sales and Field Development was brought in from Matilda Jane Clothing, another direct sales company for children in the U.S. And a former Amway executive was convinced to lead the operational team.

    The ethos of the Peekaboo Beans brand is promoting play in children’s lives. From reversible versatile designs, easy-on-easy-off pieces, long-lasting quality fabrics to matching sets, Peekaboo Beans positions itself as a child-centric company. “Paramount to everything that we do is comfort. The sensory processing industry is a $500 million industry in the United States. There are a number of children who have sensory processing challenges, meaning there are seams that irritate them, itchy fabrics, buttons, various different things that will impede their ability to think clearly because they are so uncomfortable in their clothing. So, the Peekaboo Beans value that is paramount to who we are is comfort and functionality,” shares Ms. Costa.

    But even with a unique product line like that, can Peekaboo Beans survive the headwinds in the retail sector? According to Ms. Costa, the direct selling model is here to stay.

    The direct selling model, if you think about it, is similar to a bricks-and-mortar experience. Meaning that a person can touch and feel the product and have a customer service experience that’s very personalized, except that it is in somebody’s home. And for a mother or a parent, they are craving socialization. However, they are not necessarily wanting to shop in a mall because it’s not conducive to what would be relaxing with children. What we have is what I would call a hybrid model of traditional bricks and mortar and online. However, we have the benefit that we don’t have the bricks and mortar cost structure. So, it allows the Company to grow and scale quickly,” she says.

    For retail investors, the BEAN shares currently have an attractive risk/reward profile. But its real potential will be unlocked based on how the Company’s expansion in the U.S. performs over the course of 2018.

    To find out more about Peekaboo Beans Inc. (TSXV:BEAN,CSE:BEAN), please visit the company’s Investor Hub.

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