Slumberkins
NO DEAL
EPISODE SUMMARY
🕓 Air Date: November 12, 2017
Asking For:
$175,000 for 5%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Slumberkins is a line of cuddly creatures, or "loveys," designed to provide comfort to children, accompanied by a book focusing on essential life skills.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Callie Christensen and Kelly Oriard, both mothers and educators, founded Slumberkins with a vision to create comforting and educational toys for children. Drawing from their experience as school counselors and teachers, respectively, they observed the profound attachment children have to comforting items and designed a unique hybrid of stuffed animals and blankets, known as “loveys.” The idea stemmed from their own childhood experiences with special stuffed animals or blankets that provided a sense of security.
The founders initially invested $200 each into fabric and began hand-making Slumberkins in their homes. The demand grew through social media, prompting them to hire local seamstresses and establish their manufacturing base in Vancouver, Washington. In their first 18 months, they generated $200,000 in sales. Their commitment to promoting positive skills in children led to the inclusion of a book with each Slumberkin, focusing on essential life skills taught in schools.
The Product
Slumberkins are more than plush toys; they are intentionally designed with a fabric uncommon in the toy industry, sourced from the fashion industry. The founders carefully chose unique textures and appearances for each creature, such as a Yeti for mindfulness, a Fox for coping with change, a Shark for conflict resolution, and a Sloth for relaxation.
The loveys are priced between $44 and $52, with a production cost of $15. The company experienced rapid growth, reaching $200,000 in sales in the first year and projecting over half a million for the current year. However, their production capacity in the United States has become a limiting factor, prompting the founders to seek $175,000 for strategic expansion.
They expressed interest in moving into retail, particularly through platforms like Amazon, to reach a broader audience. Despite the potential for increased profits, the founders are considering lowering prices to make the product more accessible, aligning with their background as educators and their mission to positively impact more children.
How It Went
The company’s position before Shark Tank
Slumberkins’ sales have been primarily driven by a highly engaged Instagram following and word of mouth. In their first year, they achieved $200,000 in revenue, and the current year is projected to exceed half a million. The founders acknowledged that their valuation might be high but attributed it to their production constraints and the anticipation of increased sales.
While their costs are currently $15 per unit, they have identified a production partner that could reduce costs by two-thirds. The founders expressed a desire to expand into retail, aiming to leverage the expertise of the Sharks to strategically enter the market. However, they emphasized their commitment to maintaining an accessible product.
The Negotiations:
The negotiation took an unexpected turn as the Sharks questioned the founders’ decision to enter the retail market, given the success of their online sales. The discussion focused on the potential challenges and risks associated with scaling the business, with Mark Cuban and Kevin O’Leary opting to bow out due to concerns about the competitive plush toy market. Daymond John expressed his reluctance to re-enter the plush toy industry, citing his previous challenging experience.
Lori Greiner and Robert Herjavec also decided not to invest, with Greiner expressing concerns about the competitiveness of the market. Cuban commended the founders for their accomplishments but explained that a 5% stake in the company did not align with the level of work required to address various business aspects. He ultimately decided not to invest, leaving the founders without a deal.
Despite not securing a deal, the founders remained committed to their mission, expressing gratitude for the Sharks’ time and feedback. They left determined to continue their journey of providing comfort and positive skills to children through Slumberkins.
