Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
The apparel customization retailer has boosted U.S. revenue around 90% so far this year.
Spreadshirt.com’s customized apparel is striking a chord with U.S. shoppers, as the German-based retailer has boosted sales in U.S. by 90% so far this year, says Philip Rooke, CEO of parent company Spreadshirt Manufacturing Deutschland GmbH.
“Our U.S. business has been fairly recession-proof,” he says. “It is absolutely booming.”
Spreadshirt.com brought in approximately $9.5 million in sales in the U.S. last year, or around 23% of its global sales of $42.1 million, and the U.S. is now the company’s largest growth market.
Spreadshirt.com sells customized T-shirts and other apparel on its own e-commerce site, and much of the retailer’s success this year comes from its custom-built apparel personalization engine, which it farms out to outside advertisers, celebrities and brands to use on their own sites.
Consumers who visit the shopping portion of Newcastle Brown Ale’s web site, for example, have an option to add their own text to T-shirts, sweatshirts, hats or messenger bags with the Newcastle logo. These orders go through Spreadshirt’s shopping cart. Spreadshirt handles the production, shipping and customer service for Newcastle, Rooke says. Spreadshirt does not charge other web site operators for adding the Spreadshirt customization feature to their sites.
Spreadshirt’s customers, most of whom don’t ordinarily sell apparel, like Newcastle, have found this option beneficial not only for its revenue-generating potential, but more importantly, the free advertising that comes from consumers wearing apparel that display their logos.
“Many more large companies are learning to use this as a brand mechanism or an advertising vehicle,” Rooke says. “They are essentially creating walking billboards.”
Spreadshirt.com has about 35,000 pop-up shops that use its customization engine, including news agency CNN, sunglass brand Foster Grant and such celebrities as television personality Chuck Norris and boxer Floyd “Money” Mayweather, Jr. Sales from outside companies that use its customization platform represent around 60% of Spreadshirt’s business in the U.S., and Rooke expects this to grow to 70% to 80% within the next few years.
The retailer aims to keep its customization platform simple, because even though shoppers like the idea of creating their own apparel, Rooke says, they generally do not enjoy the actual customization process.
“There is a real art to customization and personalization,” he adds. “For most consumers, personalization means they have to do work. They love the idea but hate the process. So if we do our job right our customers don’t know they’ve been in customization, they just think there are a lot of choices.”
Spreadshirt is currently finalizing a technology that will allow other retailers to use its customization engine within their own e-commerce platforms, he says. That way, shoppers on a site like Gap.com, for example, will not have to check out on a separate Spreadshirt shopping cart when they buy customized purchases.