SpiritHoods
NO DEAL
EPISODE SUMMARY
🕓 Air Date: December 6, 2013
Asking For:
$450,000 for 15%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
SpiritHoods offers animal-themed hoods with unique features like built-in speakers and hidden pockets, appealing to adults, kids, and sports enthusiasts.
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Background Story
SpiritHoods, based in Los Angeles, California, was founded by Alexander Mendeluk and Marley Marotta, who shared a passion for wildlife and self-expression. Mendeluk and Marotta’s journey began in 2010 when they conceived the idea for SpiritHoods, aiming to infuse the adventurous spirit of the wild into everyday life while also contributing to the conservation of endangered animals. Both founders brought unique experiences and expertise to the table. Alexander Mendeluk, with a background in fashion and entrepreneurship, provided the creative vision and business acumen necessary to launch the brand.
Marley Marotta, on the other hand, brought her keen sense of marketing and a deep commitment to wildlife conservation to the venture. The inspiration for SpiritHoods came from Mendeluk and Marotta’s desire to create a product that not only reflected their love for animals but also served as a platform for self-expression and community building. They envisioned SpiritHoods as more than just a fashion accessory – it was a lifestyle brand that celebrated individuality, adventure, and the interconnectedness of all living beings.
Drawing from their own experiences and observations of the market, Mendeluk and Marotta developed the concept of animal-themed hoods with innovative features like built-in speakers and hidden pockets, catering to adults, kids, and sports enthusiasts alike. Their goal was to create products that not only looked stylish but also offered practicality and functionality for everyday use. Through dedication, perseverance, and a deep understanding of their target audience, Mendeluk and Marotta successfully launched SpiritHoods, quickly gaining traction at trade shows and attracting celebrity endorsements.
The Product
SpiritHoods offers a range of animal-themed hoods designed to bring the adventurous spirit of the wild into everyday life. These hoods are not just fashion accessories but also serve practical purposes with innovative features.
Each SpiritHood is crafted with attention to detail, incorporating elements such as paw-like sleeves, scarf functionality, and hidden pockets. The hoods are made from high-quality faux fur, providing warmth and comfort during colder months.
One standout feature of SpiritHoods is the built-in speakers integrated into some designs. This allows wearers to listen to music on the go by connecting their phone to the hood’s speakers via a hidden cord. Additionally, some hoods come with a hidden zipper pocket inside for convenient storage of small items like keys or money.
SpiritHoods cater to a diverse audience, including adults, kids, and sports enthusiasts. They can be purchased online through the company’s website or through select retailers like Zappos and Nordstrom. Prices for SpiritHoods typically range around $99, offering a balance between affordability and quality craftsmanship.
How It Went
The company’s position before Shark Tank
SpiritHoods has demonstrated strong performance and a solid position in the market since its inception. With sales totaling $9.3 million to date, the company has established itself as a leader in the niche market of animal-themed apparel, catering primarily to adults seeking unique and stylish products. The company has forged partnerships with reputable retailers, including Zappos, Nordstrom’s online, and Harrods, showcasing the brand’s appeal to a diverse customer base both domestically and internationally.
Additionally, SpiritHoods has been featured in prominent stores like Fred Segal, further solidifying its presence in the retail landscape. SpiritHoods’ customers are predominantly fashion-conscious individuals who value self-expression and the brand’s commitment to wildlife conservation. With a loyal following of fans, including celebrities like Bruno Mars and Snoop Dogg, the company has cultivated a strong brand identity and a sense of community among its supporters. In terms of funding, SpiritHoods has primarily relied on revenue generated from sales to finance its operations and growth initiatives.
While the company has experienced profitable years, such as a $914,000 profit on $4.5 million sales in its best year, it has also faced challenges, including a $500,000 loss in a subsequent year due to overexpansion into different markets and products. Despite these setbacks, SpiritHoods remains focused on its core product and brand identity, with a streamlined structure aimed at maximizing efficiency and profitability. The company continues to explore opportunities for growth while maintaining a strong online presence and fostering relationships with both customers and retail partners.
The Negotiations:
During the negotiations on Shark Tank, SpiritHoods founders Alexander Mendeluk and Marley Marotta presented their pitch seeking $450,000 for a 15% stake in their company. Despite showcasing impressive sales figures and celebrity endorsements, the Sharks expressed concerns about the company’s declining sales and overexpansion into different markets. Daymond John made the only offer, proposing $450,000 for a significant 50% stake to license the product and expand into new categories.
However, Mendeluk and Marotta deemed the offer too steep and were unwilling to part with such a large portion of their company. After declining John’s offer, the founders attempted to renegotiate their valuation, proposing a $2 million valuation for a 22.5% stake, with additional percentages tied to licensing deals. However, the Sharks were not convinced, and Mark Cuban expressed buyer’s remorse, ultimately leading to no deal being made.
Despite not securing a deal in the Tank, Mendeluk and Marotta remained optimistic about the future of SpiritHoods. They were pleased that they did not compromise their company’s valuation and still retained control over their brand. This negotiation highlighted the challenges and risks associated with scaling a business, but the founders remained committed to their vision and focused on building SpiritHoods into a successful and sustainable company.
