Okay, we'll go ahead and get started. Good afternoon, everyone. Welcome back to Sidoti's August MicroCap Conference. This afternoon, we're gonna hear from a.k.a. Brands, ticker AKA. The company's Interim CEO and CFO, Ciaran Long, is here to speak with us. As usual, we're gonna give him about 20 minutes to go through the presentation, after which time I'll open it up to a Q&A for the last 10 minutes. If you do have any questions at any time during the presentation, please feel free to type it into the Q&A box, and I'll get to as many as we can, time permitting. Please join me in welcoming a.k.a. Brands and Ciaran, with that, I'll hand it over to you. Thanks, Daniel, and thanks for the opportunity to share more about a.k.a. with you all today. So at a.k.a., we view ourselves as the leader of fashion for the next generation of consumers, and we're doing that across a portfolio of innovative retail brands. Today, we go to market with four main brands. On the men's side, we have Culture Kings, which is a streetwear brand, a streetwear retailer, and, you know, really different, a mix of direct-to-consumer and stores and really focus on that, what we would call experiential retail, rather than just the kind of traditional retailer. We also go to market with a brand called mnml. That's a little bit more fashion-forward, and that's a key differentiator for them, really focus on, you know, a fashion-forward product quality and also just very accessible from a price point perspective. On the women's side, our largest brand is Princess Polly. You know, does a little over kind of $250 million from a revenue perspective, really focused on on-trend fashion, accessible price point, and doing it in a sustainable way, and those kind of three aspects, just very, very core for Polly. And then Petal & Pup, a little bit... Excuse me, a little bit older, consumer there, you know, onto the next stage of life, and, you know, we focus on those different moments in life for that consumer, and that brand's seeing a lot of success recently. So how we do it is quite different from what you would see in traditional retail, right? I think, you know, as well as, you know, a direct consumer portfolio of brands, what really sets us apart is some of the aspects of our data-driven approach to merchandising, the level of exclusive products that we have. So at Petal & Pup, at Princess Polly, and at mnml, pretty much 100% of the product that we sell is exclusive to us. You know, designed by us, not available anywhere else. At Culture Kings, a little bit different because they're in the streetwear space, about half their product is the third-party brands, the New Eras, the Nikes, the adidas, you know, product that's really important for that consumer, and then about 50% of it is just different first-party brands that we've developed in Culture Kings. Yeah, we also have a very different approach to social media and to our marketing in general, that allows us to be very different from others out there in the market. And then from a technology perspective, you know, we sit on and leverage the Shopify technology stack and the ecosystem that they've built. Allows us to be really efficient from a capital perspective. You know, you're not spending into our technology platform, you know, really leveraging the scale and the money that Shopify put behind theirs. And we also take the same approach to our fulfillment centers, right? So we, you know, use a third-party vendor there, really close relationship with. We have people in their building, so, you know, really ensuring they are extremely efficient, and also allow us to deliver on the service level we need for our customers. And then as we think of go-to-market, you know, really leaning into, you know, the opportunities that we have in direct-to-consumer, but also now opening stores for our brands and, you know, continuing to expand the total addressable market that we have for the brands as we kind of put our product on more marketplaces and lean into more wholesale opportunities. So I'll go a little bit deeper on a couple of these, you know, key pillars for us, and particularly on that data-driven approach to merchandising. I think, you know, it's really core to how we run our business. It differentiates us from other people in the market, and I would say probably not fully appreciated the impact that it has on our business. So as I mentioned, at three of our brands, you know, Polly, Petal, mnml, all of their product is 100% exclusive to us, they are all on what we call a test and repeat approach to merchandising. So for each of them, they will launch new product each week, you know, small number of SKUs, small depth in those SKUs, and they see how those perform. If they do well, they buy back into and replenish into that product. If it doesn't do well, they just let it run out and sell over a period of time. You know, for that, it allows us to be, you know, much higher gross margins. You get a lower return rate because you're kind of you're only putting product that's really winning in front of customers. You know they're gonna respond positively to it. You also get much better return on your ad spend from a marketing perspective, and it really just allows your operations across the business to be much, much more efficient. From a marketing perspective, as I mentioned, you know, we, we lean into influencers, you know, across the brands, and I would say Princess Polly, in particular, you know, has done a really good job of having a very differentiated program when it comes to influencers. So, you know, we, we don't have any mega-influencers across the brands. Much, you know, the influencers influencers we work with have a much smaller following, much more authentic for their, you know, customer set that they're talking to, their, their audience, and for us, much more on brand, right? We'll supply those, influencers with some product that they can talk about. We'll give them a discount code that they share with their audience for the site, and then we're able to measure the effectiveness of each one of those and decide if we're gonna continue with the relationship or, if we're not seeing the ROI that we want, you know, bring in new influencers. And, you know, you're kind of constantly refreshing that group of influencers that you have, making sure they're on point for the consumers that we're going after, and making sure that we don't age out these brands, which is obviously somewhat of a risk in fashion brands. So that allows us to be very efficient from a marketing perspective, and really go after the opportunity we have across all of these brands. You know, we've done a lot as well over the last kind of 12 or 18 months of kind of expanding these brands beyond just purely direct-to-consumer, meeting our customers wherever they are, be it direct-to-consumer, on other marketplaces, and now leaning into wholesale opportunities as well, and just a huge opportunity to grow these brands in those markets. So I'll talk a little bit about our 2024 initiatives. We'll talk about some recent performance and then 2025. You know, as we think about 2024, we've really been focused in three areas, right? Attracting, retaining customers, and doing that really with leaning into our test and repeat, leaning into the great differentiated product we have across the brands, but also looking to push into new categories of product with the brand. So Princess Polly, in particular, has done a really nice job this year of, you know, leaning into loungewear, sleepwear, testing a little bit in athleisure, and have done a big push recently into basics to kind of, you know, take advantage of that back-to-school time period. So it's a nice way that they are continuing to, you know, expand that addressable market by, you know, you know, getting more share of wallet as they build into new categories. Also, just doing more as well from different marketing aspects. You know, we've done a lot, like I talked about, with influencers. We're also doing more in performance, but also doing more from a brand perspective as well of just as we kind of continue to evolve these brands, talking to our customers in different ways. And then, you know, a key pillar of our growth opportunity is just scaling the brands from an omni-channel perspective. We've opened one store, the first store ever for Princess Polly, in September last year in the Century City Mall in Beverly Hills, in L.A. Seeing great success there, right? It's, you know, 30% of the customers that we get in the store are new to the brand. We're also seeing a nice halo effect regionally in that area as we open stores. And, you know, it's a great store. It's ahead of sales plan, you know, meeting all. It's full while profitable, meeting our profit expectations, giving us a lot of confidence to scale into new stores. So, you know, expecting to open 5 to, you know, 4- 5 new stores for Princess Polly throughout the back half of this year, and we'll continue to expand that footprint as well. Also, doing a lot from a marketplace and a wholesale perspective. You know, we've talked quite a bit of the tests that the Petal & Pup brand has run on Nordstrom, Macy's, and Target, and seeing really, really great success there. You know, 90% of the customers that we bring on in using those marketplaces are new to the brand, which is so a great way for us to, you know, elevate the brand, introduce new customers, bring on more revenue, and bring on more profitable revenue as we continue to look to execute our strategies. Look, for us, as you know, retail, fashion retail, direct-to-consumer, right? Your operations are just and having extremely efficient operations where you're not wasting any money anywhere is just kind of core to how we run the business. You know, every day we're looking for opportunities to, you know, be more efficient, be sharper, and continue to leverage that platform that we have. So done a lot this year, moving the Culture Kings brand onto test and repeat, more opportunities there as we go through the back half, but also just continue to drive leverage across the P&L. So I think, you know, Q2 is a good view, the performance of kind of the continued improvements we make. You know, it was really great to see, you know, four quarters in a row now of growth, and U.S. growth in particular. You know, up 9% overall, I think 19% up in the U.S., which obviously, look, it's our biggest market. It's the biggest opportunity for us. We are bringing these brands into the U.S. and looking for them to continue to scale. I think as well, really nice to see, you know, outsized growth on profitability, right? 9% growth on sales, up 44% on EBITDA, and you know, that coming from. You can see kind of, you know, gross margins up 86 bps year-over-year, more efficiency in the marketing line, leverage on the G&A line. Just a really good view of how we look to manage the business really operationally efficient. Yeah, I think, you know, 2, 2 and 3 kind of, you know, inventory management, just core to, I would say, general sales generation, gross margin, but also kind of overall profitability. Nice to see, you know, flat on sales even though we had, you know, great growth from a revenue perspective and expanding EBITDA and expanding gross margin. And looking for that kind of gross margin expansion to continue in the back half of the year. You know, in 2023, we paid down $50 million of debt, you know, continued to strengthen the balance sheet. We will look to pay off more debt in the back half of this year. And again, for us, just continuing constant improvement, you know, looking to strengthen the balance sheet, reduce our leverage, and really take that EBITDA generation back to organic growth of the brands, supporting a store rollout, and deleveraging. You know, we upped our guidance again in Q3 after our Q2 results, you know, just based on the strength of the performance we see and feel comfortable where we are for the back half. So I'll just touch a little bit here on kind of long-term opportunity, which, look, I think is it. We have huge opportunity across these brands. They are, you know, brands that really know how to talk to their customer. They do it in innovative ways with differentiated product, differentiated marketing, and are now kind of leaning into the huge opportunity in the different omni-channels that are out there for the brands. Obviously, I would say after that, international continues to be an opportunity. You know, we've done some interesting little tests. We do see people buying from us internationally. The brands do resonate internationally. To date, we ship from L.A. for our international orders, so, you know, you're not giving people a great experience. And even though we're still getting nice repeat rates there, I think it speaks to the opportunities that's there. I think we'll do more tests on international back half of this year or early next year and see kind of that big growth opportunity there, I think in kind of 2026 and beyond. And obviously, look, you know, I think, we do plan to get back to acquisitions. We, we have bought the four brands that we have today, you know, we're, we're continuing to improve their operations, helping them scale in the U.S., helping them go after the, the long-term opportunity that's there. And we feel there, there are other acquisition opportunities out there. Obviously, pretty focused right now for 2024 in the growth opportunities we have in these brands, but more to come as we, as we think about acquisitions. So Daniel, just jump in if I'm kind of running out of time. I was just gonna touch on the four brands and, like, just some of the key points about them. So Princess Polly is, you know, as I said, kind of focuses on that on-trend fashion, accessible price point, and doing it in a sustainable way. About 35% of their new products are made with low-impact materials, so sustainability is core to what Polly does. You know, focused on that, you know, teen college-age consumer, and really differentiating themselves in how they bring their product to life and talk to that consumer. Petal & Pup, slightly older consumer, slightly more accessible from a product perspective, earlier in their journey as we scale them in the U.S. They've done a lot of tests on marketplace and wholesale over the last 12 or 18 months, and I, you know, I would say kind of huge opportunity for this brand. Certainly, yeah, I think across the U.S., just a huge opportunity. Culture Kings, you know, the slides don't really bring to life, and it's hard to bring to life how different Culture Kings is. So this is a retailer, you know, focused on kind of streetwear and really bringing together, you know, music, sports, fashion for that kind of 18 to 35-year-old male consumer. You know, we opened... They've got 10 stores, they started- the brand started in Australia. We opened the Las Vegas store for them November 2023. And it's a store like no other, right? There's a half basketball court in the store. The total store is about 13,000 sq ft. There's a music studio in the store. There is a fully licensed bar in the store, which I can tell you, getting a bar in a retail store in Vegas is a hard one to pull off. There's also a secret room that you need to get, you know, special access to. And the brand, look, its store is performing ahead of sales expectation. It's four-wall profitable, but it's also just a fantastic location for us to amplify what the brand does, right? We use it in that kind of retail-tainment, as we call it, not just to sell product, not just to introduce Culture Kings to new customers, but also use it for a marketing event location to amplify that brand online. You know, we've had a UFC Octagon in the store, where we've had kind of UFC fighters working out, engaging with our customers. For the Formula 1 Grand Prix last year, we had a McLaren full-scale car in the store. We did a collaboration with McLaren and Mitchell & Ness. Lando Norris, their lead driver, came into the store, spent time with the customers. And that's just some of the examples of really what we can do at Culture Kings. It's kind of core to the brand and allowing it to kind of stand out in that retail space. And then, mnml, as I talked about, a little bit, you know, more fashion-forward. You know, it's one of the top-performing brands on the Culture Kings website, in the Culture Kings store. Super quality product, great price point. You'll see Jayson Tatum up there. It's amazing, this brand has had a huge number of NBA, NFL players buying the product, wearing it as they walk into games and out of games in these tunnel fits and, you know, putting it up on their Instagram profiles, talking about the brand. And what's fantastic is pretty much all of those players have bought the product themselves, right? To see them actually, you know, buying the product, but happy to talk about a product that's at a, you know, 60, 80, $100 price point, really speaks to how different the brand is, the quality of the product, and I would say, just long-term, the opportunity we have across all these brands. So that's kind of it for me in the presentation. Okay. Ciaran, thank you so much. I wanna go see that store in Vegas now. But, I guess to kick things off, we have a few questions in the queue, but I had a couple of my own. You said that you've had a lot of success with the Beverly Hills store for Princess Polly, and that you're gonna open 3-4 more, you know, hopefully in the back half of this year. Where geographically are those stores gonna be located? And then, then as the company thinks about opening a new store, what does that look like from, like, a CapEx investment, and how do you think about a payback period for that? Sure. Yeah, great question. Yeah, I think, you know, so Princess Polly has been 100% direct-to-consumer until we opened that store last September. And it's just been, it's been amazing, look, for me and for their. To sit outside the store and just look at groups of, you know, women walk up to the store and, you know, nudging each other, pointing at it, and going, "Oh, look, there it is. There it is," and just the excitement they have of touching that product in real life has been amazing. I think, look, we're very fortunate with, you know, we've got, we've got 10 years of customer data as we think about: Where should we open new stores, right? So we really use that to help us from a geographic perspective, where should we put stores? And then for us, it's. Look, let's pick the right mall, and then the right location in the mall. Is the right location available? Yeah. I think for us, you need all three, right? You know, we're very mindful of where we put the stores. We know the importance of location, the importance of size, you know, and we're learning a lot, even how we kind of approach that. So, that store in L.A. is about 3,500 sq ft. You know, we pretty quickly have to double the number of changing rooms in the store because of the wait, the line out the door. The new Polly stores are more in the kind of 4,500 sq ft-5,000 sq ft size. For us, kind of, look, we're looking for a payback of 18 months or less, you know- Yeah Particularly the early ones. I think, probably an opportunity to make it shorter as we get a little bit of scale and can kind of get economies of scale from a CapEx spend. And then, well, like Princess Polly historically being direct-to-consumer, and now with a brick-and-mortar store, what is the difference in the margin profile across all four brands in terms of the DTC versus brick-and-mortar for you? Yeah, it's really interesting, and I think from an... If you look at it kind of from an EBITDA perspective and kind of look at the G&A as the overall group G&A, you get pretty similar profitability across the different platforms, right? No, I think, look, we're very fortunate in this group that all of the brands make money. They all generate cash. They've all got profitability, and a huge part of that, back to that test-and-repeat model of, like, keeping your inventory good and your merchandising good. You've got great—if you've got great gross margin, a lot of the rest of it works. So we do see that, you know, pretty similar profitability. Obviously, the profile's a little bit different, right? Mm-hmm. In stores, we will have... You have a little bit higher gross margin. Your selling expenses are a little bit different. You don't really have marketing. As we look to wholesale, I would say gross margin's a little bit lower, but obviously you don't have selling expenses or marketing. Yeah. So, you know, I think it's given us confidence to, like, that we can lean into all of the channels. The model is there. The profitability is there. We just kind of need to continue to increase the time for these brands. That's great, and then going back to the last two, the Culture Kings and the mnml, obviously, getting the exposure in the NBA, you know, walk-in is a big deal these days, but who do you see as your main competitors in those two brands? 'Cause obviously, they're catering to different geographies and different sets, but it seems like there would be quite a bit of competition out there for price points between, like, $60-$100. Yeah, I think, look, there are certainly... I I think, look, there's certainly competition out there. It's broad competition. I think how Culture Kings brings to life what they're doing... We haven't seen anybody else out there, right? And I think that, you know, that combination of music, sports, fashion, you know, is really, really different, and that you can have NBA players, NFL, musicians, talking about your brand- Yeah ... talking about your product, you know, is very different from what we see out there. Tattoo culture, too. Yeah, yeah, and I think it's interesting that even the name, you got a lot of flexibility there and scope on what we can do, right? And, you know, we're talking to various artists of, you know, that are all looking to do stuff with Culture Kings. So, I think it's, you know, look, we've had great fun introducing this brand to the U.S. I think there's a lot of differentiation here. Vegas is going really well. We will open more stores for them starting next year, but like, like we do everywhere, we're pretty mindful of finding the right spot for those stores. And then last one from me, and I'm trying to hit on some of the ones that have come in as well, but, moving forward, you've talked about the expansion internationally or just the opportunity internationally. Where do you see the biggest opportunity? And then along the same lines, how exposed is the company to sourcing from China? Sure. Yeah, I think, look, So it's interesting, three of the brands started in Australia, and we're, we've kind of we've bought them, brought them to the U.S., and are, and are helping them scale in the U.S., and that's... Look, it, there's obviously a massive market in the U.S., that's the, the, kind of, key focus for us. You know, we are selling internationally today, I think, you know, Canada, Canada, the U.K., Germany, even Japan, for Culture Kings, is very strong. mnml does well in South Korea, and, and, and some other countries. So I think there's a lot of opportunity out there. I think for us, it'll probably be more into kind of, I suppose U.K., Europe would be—we kind of feel some, some of the opportunity. But look, it's interesting. We're kind of, we have probably more and more people kind of finding out about these brands and kind of reaching nearly into us to talk about opportunities to do something, you know. Yeah ... in a different country with our brand. So I think, look, it's the opportunity is there. We are mindful to go after it, you know, at this period. But I would say US at the moment. And then the last question, 'cause we're running up on time, but going back to kind of marketing, how much of your overall marketing spend, or I guess, is the majority of your marketing spend going into social media? And then how do you view a successful, a successful campaign after you've made that investment? Sure. Yeah, I think, look, we're very fortunate with the strength of our marketing engines and the teams we have. You know, we keep marketing at about 12%-13% of sales, you know, and have been able to do that and kind of would expect to do that going forward. You know, I would say, a good share of our spend goes into influencer marketing, right? Mm-hmm. We are very fortunate that you can measure that, you know, on a... For every dollar you spend, you get unbelievable clarity on, is it returning what I want? Is it returning what I want on that first purchase? Am I getting the repeat rate that I want, and am I getting the repeat frequency that I want? So for us, we can measure that across all of those influencers. We are starting to do a little bit more from a branding perspective as well, as we just kind of look to go after the opportunity we feel we have there. It's a new muscle for the brands, and they're super cautious about doing it because they can't measure it as easily- Yeah A s they can some of the others. So I think, look, it's, there's a lot of opportunity for us with these brands. Great. Well, Ciaran, on behalf of Sidoti and everybody that attended the presentation, thank you so much for your time and sharing your story and your strategy moving forward, and also your willingness to answer questions. To those of you who did attend, thank you so much, and again, thank you to a.k.a. Brands for being here. Thanks, Daniel. Appreciate all of your time. Yeah, of course. Talk to you later. Bye.