Leggings aren't Just for Yoga Anymore
- Inventory, operating capital
Custom Lending Package:
- $75,000 inventory credit line
- Increase inventory purchases
- Ability to take on larger customers
- Normalize cash flow
Ft. Lauderdale, FL
Year in Business:
Florida native Nikki Aliseo graduated from the Art Institute of Ft. Lauderdale in 2010 with a degree in graphic design. She spent time in the corporate world, first in product development for children’s sports equipment and then working on iPhone accessories and packaging design for iHome in New York. But the call of home was strong so she packed her belongings and returned to Florida.
All the while, Nikki began practicing yoga and fell in love with the ancient art. Soon after her move back to Ft. Lauderdale, Nikki became a certified instructor and taught a number of classes each week. This coincided with the beginning of the yoga pants-as-everyday-wear trend and though she adored the comfy and fashionable brand name pants she saw in the yoga studio and around town, they were too pricey for Nikki to have one of each style. Being a problem-solver at heart, Nikki decided to craft her own versions. Soon she and her sister, Remi, were scouring fabric stores in their area, collecting fun colors and prints, and Nikki started to sew. And sew. At their kitchen table, a new line of workout leggings came together and Jiva Active was born.
Nikki made dozens upon dozens of pants in a variety of colors and patterns over the next two weeks, creating a bit of a stockpile. During this time, she and Remi started an Instagram account, growing their follower base and starting with teasers about their upcoming website launch. After creating their own do-it-yourself website, they announced their go live date to their Instagram audience. The first day they had 1,800 visitors and the sales started climbing. Within days, the cute leggings were noticed by a few wholesale buyers, who began placing orders. In very short order, Jiva Active’s order outstripped their kitchen table production capabilities. Nikki quickly found a local clothing manufacturer who liked what he saw and decided to take a chance on the unproven apparel company and agreed to take on an initial production run with the caveat that the order needed to be paid in full. Upfront.
The first handmade leggings were bootstrapped with funds Nikki was bringing in with freelance graphic design work she was doing in her spare time, what little there was. But there was nowhere near enough cash to move forward with the professionally produced run. Family to the rescue! Nikki’s grandparents lent the new company $15,000, enabling the manufacturer to begin production.
Social media buzz was very high for the new Made in the USA leggings and the wholesalers who bought the first run had high praise. The word spread quickly and the company presold 75% of its first manufactured run prior to delivery. This allowed Nikki to reinvest the profits and order a second run.
Then something big happened. Jiva Active’s leggings caught the eye, and order book, of a buyer from Soul Cycle, a national chain of spin cycle gyms with its own active wear boutiques. “Soul Cycle made the decision to white label our leggings and sell them at locations across the country. We were thrilled but then Remi and I looked at each other and wondered ‘where will we get the money to pay for a run that size?’,” Nikki recalls. Bank loans were out since the company was too new and too small to qualify. So she turned to the internet and was fortunate to find online lender Dealstruck. Dealstruck specializes in providing affordable and appropriate small business loans to growing companies that don’t yet qualify for loans from traditional banks.
“Reinvestment was our whole philosophy until we turned to Dealstruck. We realized that we hadn’t earned enough to keep expanding production. We needed additional capital in order to meet our orders and have more to sell through other channels like our website,” she says.
Since it takes 8-10 weeks from when an order is placed to when Jiva Active receives it and makes it ready for shipment or sale, the downtime can cause a big cash crunch. The outlay for the order takes up cash on hand and there’s not much left over for operating expenses. In addition, if the company relies solely on available funds, they would never be able to afford to buy bigger runs to fill the other orders that roll in or to have inventory to sell on their website. Dealstruck has an innovative product perfectly suited to Jiva Active’s needs–the inventory based credit line. A truly revolving product, the line gives Nikki access to working capital when she needs it, and increases the amount available for borrowing as payments are made. This made a huge different to Jiva Active, according to Nikki, “We really needed the credit line to keep the ball rolling and make payroll. We wouldn’t be able to take on new, bigger orders without Dealstruck. Knowing we have money available allows us to give a solid yes when taking on new clients.”
Jiva Active isn’t slowing down. With sales of their American made yoga pants growing exponentially, and the inventory credit line available to allow for expansion, the future is looking bright. The financing has given the company the ability to plan big for the holiday season and beyond. Nikki plans to launch a swimwear line and a men’s line in 2017. “None of this would have been possible without our Dealstruck credit line,” she says.
Dealstruck is thrilled to be a part of Jiva Active’s amazing growth and proud to be their partner for the long haul.