California Apparel News

DSTLD, the direct-to-consumer contemporary brand for men and women, is preparing to open up its second round of crowdfunding.

“After the success of our first round, we are embracing this as the core strategy for financing growth for the business rather than bring in private equity or venture capital,” said Corey Epstein, DSTLD co–chief executive officer and creative director. “We’re really focused on building that customer/investor/ambassador list.”

Epstein and co-CEO Mark Lynn founded DSTLD in 2014 in Los Angeles as a premium-denim and T-shirt resource. The brand has since expanded to include a full range of tops and bottoms as well as accessories and outerwear with a focus on sustainable fabrics, sweatshop-free sourcing and “ethical” pricing. Denim is priced below $100. Leather jackets range from $350 to $400. Wool coats are priced between $180 and $250.

Epstein said DSTLD has seen its business grow by nearly 200 percent in the last year.

“To keep that up, you need to keep putting fuel on the fire,” he said. “That’s been our strategy with the brand. There’s a large segment of people that will benefit from our apparel ethos and quality and pricing. We decided that the most efficient and the most democratizing way to do that is through this Regulation A Plus mechanism, which enables us to bring in our best advocates to share in future potential gains.”

Epstein said the majority of DSTLD investors are customers—the company calls them “brand advocates”—but there are also some who learn about DSTLD through business-investment channels.

“As we grow as a brand and expand our customer base, we want to continue to provide the opportunity for customers to invest in the brand and own a piece of the company,” he said.

DSTLD is able to raise money from small-scale investors through provisions in the JOBS (Jumpstart Our Business Startups) Act of 2012, which expanded funding opportunities for small U.S. businesses. There are some perks available for early investors, including discounts on DSTLD apparel. Investors have access to a personal dashboard that allows them to track DSTLD’s business.

“It’s really true transparency into the progress of the brand,” Epstein said.

DSTLD is also looking to expand investors’ level of engagement in the brand through digital surveying and rating tools, which would let investors weigh in on future product development.

As it is, DSTLD’s 1,700 investors are able to communicate directly with the brand.

“We also have a VIP channel of communications,” Epstein said. “Whenever investors email us, both myself and my co-CEO receive those emails directly and are involved in responding to and listening to the feedback.”

In the current round of funding, DSTLD is looking to raise $2 million, which will be used for continuing to build the DSTLD customer base. The minimum investment is $1,000.

“We think there’s a great opportunity to capture market share as apparel sales move online,” Epstein said. “Acquiring a customer is very valuable and has forward-looking value. You want to invest in that while you can while customers are moving online. When you’re a direct digital brand, once you’ve acquired that customer they’re in your funnel. You can communicate with them. If they aren’t buying, you can ask what kind of things they’d like to see from us. There’s that direct line of feedback. So there’s a lot of value in moving quickly to grow that customer base.”

This fall, DSTLD will open a pop-up shop at Platform in Culver City, Calif., with plans to open additional pop-ups across the country, most likely beginning with a New York pop-up later this year.

The pop-up shops will allow current and potential customers to have a “full immersive experience” with the brand, see the quality and try on product all in an environment “that has that white-glove service to help guide you into the right pair of jeans,” Epstein said.

The company is also looking to host meet-and-greet events for potential investors as well, Epstein said.

Information about the brand can be found at www.dstld.com. Information about investing in DSTLD can be found at www.seedinvest.com/dstld/series.a.2. Details about the pop-up shop at Platform can be found at www.dstld.com/pop-up.