Basic Outfitters – Clothing Essentials By Mail
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 6, 2017
Asking For:
$125,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Basic/Outfitters is an online destination offering customizable packs of men's basics, including socks, underwear, undershirts, and jogger sweat pants, with up to 17 items for $60.
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Background Story
Laura and Michael Dweck, the founders of Basic/Outfitters, hail from the vibrant city of New York. Their entrepreneurial journey began with a relatable and practical problem: Michael’s penchant for holding on to undergarments for an astonishing seven years. This amusing revelation served as the catalyst for a creative solution that would eventually become Basic/Outfitters.
Upon their marriage, Laura couldn’t ignore the sorry state of Michael’s socks, underwear, and undershirts – faded and worn. Determined to find an efficient and economical solution to refresh his wardrobe, Laura embarked on a quest that led to the inception of Basic/Outfitters. The couple recognized the inconvenience of the traditional shopping experience, where socks were in one section, underwear in another, and prices varied widely. Faced with this challenge, they envisioned a streamlined, online platform offering customizable packs of men’s basics at an affordable price.
The idea for Basic/Outfitters emerged from the practical need to replenish Michael’s wardrobe quickly and without breaking the bank. Their frustration with the scattered and overpriced offerings in traditional stores led them to create a solution that would revolutionize the way men shopped for basics. The duo undertook market research to determine an optimal price point, landing on the attractive proposition of $60 for up to 17 items. Working with a dedicated buying agency, they located factories to produce high-quality basics, ensuring both affordability and customization.
The Product
Basic/Outfitters offers a game-changing approach to men’s basics, providing a streamlined and customizable shopping experience. The core product is a personalized basics pack, allowing customers to replenish their wardrobe with high-quality essentials in a hassle-free manner. The process is simple: customers visit the online platform, where they can curate their pack by choosing from a selection of items.
The customization options include up to 10 pairs of socks, three pairs of underwear, three undershirts, and a pair of jogger sweatpants, all bundled together for an enticing flat rate of $60. This unique model not only simplifies the shopping process but also offers significant cost savings compared to traditional retail.
Basic/Outfitters emphasizes the quality of its products, with a focus on comfort and durability. The founders worked diligently with a buying agency to identify suitable factories, ensuring that the basics meet high standards while remaining affordable. The socks, underwear, and undershirts are designed to provide a comfortable fit and are available in various styles and sizes to cater to individual preferences.
The purchasing process occurs entirely online, providing customers with the convenience of selecting and ordering their personalized basics pack from the comfort of their homes. The straightforward pricing of $60 for up to 17 items eliminates the need for complex subscriptions or navigating disparate retail sections, offering a one-stop solution for men looking to refresh their essentials wardrobe with high-quality, affordable basics.
How It Went
The company’s position before Shark Tank
Basic/Outfitters, launched just 10 months ago, has shown impressive early signs of growth and success. The company’s health and position in the market are reflected in its swift sales performance, accumulating $351,000 in revenue within this short timeframe. The founders, Laura and Michael Dweck, have strategically positioned the brand as an online destination for men seeking a hassle-free and affordable way to replenish their basics.
In terms of partnerships, Basic/Outfitters has collaborated with a buying agency to identify suitable factories, ensuring the production of high-quality basics at an affordable cost. The company’s commitment to quality is evident in its product lineup, which includes socks, underwear, undershirts, and jogger sweatpants, all designed for comfort and durability. Basic/Outfitters caters directly to consumers through its online platform, eliminating the need for wholesalers. The direct-to-consumer model allows the company to maintain control over the customer experience and pricing strategy.
The customer base of Basic/Outfitters consists of individuals looking for a convenient and cost-effective solution to refresh their wardrobe with high-quality basics. The founders have successfully tapped into a market segment seeking customization, affordability, and simplicity in their shopping experience. In terms of funding, Basic/Outfitters secured $750,000 in capital, which includes a significant investment of $250,000 from the founders’ own life savings. The company’s valuation reached a million dollars based on the concept alone, showcasing investor confidence in the brand’s potential.
The Negotiations:
The negotiations for Basic/Outfitters on Shark Tank were dynamic and marked by a surprising revelation that significantly influenced the outcome. Laura and Michael Dweck entered the tank seeking $125,000 in exchange for a 10% equity stake in their company. The Sharks were immediately intrigued by the unique offering of customizable men’s basics at an affordable price point. The pitch garnered positive responses, with Sharks expressing admiration for the quality and pricing of Basic/Outfitters’ products. However, the negotiation took an unexpected turn when it was disclosed that the founders had already given away a substantial 75% of their equity to outside investors. This revelation cast a shadow over the otherwise promising pitch, prompting concerns from the Sharks about the company’s long-term viability with such limited ownership.
Despite the impressive sales figures and positive customer feedback, the Sharks, particularly Kevin O’Leary and Lori Greiner, voiced skepticism about the founders’ decision to part with a significant portion of their company’s equity before proving its success. O’Leary, known for his emphasis on equity and ownership stakes, ultimately bowed out of the deal, expressing concern over the company’s capital management. Lori Greiner and Robert Herjavec made offers, with Greiner proposing a deal for 20% equity and Herjavec suggesting a unique arrangement where the 25% equity would come out of the founders’ shares. However, these offers were ultimately rejected by the founders, who remained steadfast in their vision of building a substantial empire in the men’s basics market.
The negotiation concluded with Basic/Outfitters leaving the tank without a deal, as the founders were unwilling to compromise on their existing equity structure. The Sharks, particularly O’Leary, emphasized the challenges associated with succeeding with a limited ownership stake, and despite positive sentiments toward the product, the equity distribution became a major stumbling block in securing a partnership. The episode highlighted the importance of strategic equity management in the eyes of the Sharks, with the founders opting to pursue their ambitious goals with their current ownership structure.
