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Nextstore presentation

仍亠从亠亶 亠弍亠亟
仍亠从亠亶 亠弍亠亟

Next Store is a Russian online and offline retailer of youth clothing that is seeking investment. It currently has a 150,000 monthly online reach and one offline store. With investment, it aims to reach 1 million monthly online, open 13 stores, and establish own manufacturing. Its unique model converts online traffic to offline sales through tailored clothing services. It has grown revenue from $500 to $45,000 since 2010 while lowering costs through its manufacturing facility.

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NEXT STO RE A N E W L O O K AT YOUTH CLOTHING December 2013 Con鍖dential
EXECUTIVE SUMMARY NEXT STORE CURRENT BUSINESS STATE 150 000 monthly reach online store, which provides quality service to our customers. O鍖ine store in RIO mall, Moscow, Russia. Own brand SKVAMA. 100% models designed, engineered by our employees and crafted in Moscow region. OUR OBJECTIVES Service of tailored clothes. 1 000 000 monthly reach e-store, with a high level of conversion visitors into buyers and an extensive client base. 13 o鍖ine stores placed in the biggest Russian cities. Own manufacturing facilities and local delivery. INVESTMENTS NEEDED 2014: 63 M rub! 2015: 32 M rub! Total: 95 M rub! Share: 30% Investor IRR: 47,7% ! December 2013 Con鍖dential
NEXTSTORE MISSION Tailored clothes for for Young, Brave, Stylish
MAIN IDEA NEXT STORE Problem of well-鍖tting We know how di鍖cult to 鍖nd really well 鍖tted clothes in the store. The problem is double if you have a "non-standard" 鍖gure. Those people are our potential customers. The question is how to make a product for mass market with a reasonable price? The product which will 鍖ts well for a person with any 鍖gure? Well fitted for everyone: 1800 RUB price of shirt, for example OUR DECISION IS CHEAP INDIVIDUAL TAILORING December 2013 Con鍖dential
BUSINESS STRUCTURE NEXT STORE The Product OWN BRAND SKVAMA We produce and sell clothes under own trade mark SKVAMA. Currently we are focused on selling basic types of clothes which are in high demand. SKVAMA products contribute up to 70% of our turnover. Most important categories are hoodies (30% of sales), coats (25% of sales), jackets (20% of sales). Distribution Channels E-COMMERCE Online store NEXTSTORE.ru is the main distribution channel. Almost 70% of the revenue comes from the online store. E-shop was launched in June 2010 and already gained a signi鍖cant base of loyal customers. During the last 3 years we learned how to: 1. get new visitors 2. convert visitors to customers. 3 keep customers loyalty. 150 000 unique visitors per month. Revenue 30 000 USD. RETAIL STORES Retail stores are still the main place for purchasing clothes in Russia. We found out that online customers can be successfully converted into o鍖ine buyers: 40% of our o鍖ine shoppers 鍖rst visited our online store. First shop was opened in May 2011 in a street-format. Now we focused at placing new stores in shopping centers and malls across Russia. 1200 visitors per month. Revenue 15 000 USD. November 2013 Con鍖dential
OUR VIEW OF IDEAL E-COMMERCE What customers need? NEXT STORE How we complete the 鍖aws WE ALREADY DONE: Regional logistics hub 1 Lower price; Regional logistics hub 2 Free delivery; Free returns; See and try on many models live, before buying only one; Central Warehouse and Manufacture Secure website and payment methods; WE WILL DO: Regional logistics hub 3 ≒ Own manufacturing facility in Moscow region; Well 鍖tted clothes; ≒ Clothes tailored to customer needs; Quick form for repeat order; ≒ Fast delivery due to regional logistic hubs; ≒ O鍖ine stores serve as 鍖tting rooms. Fast delivery; Opportunity to see the product in the showroom. November 2013 Con鍖dential
UNIQUE BUSINESS MODEL Our main source of new customers is the online-store. Tra鍖c from: search engines, direct marketing, context adverts, etc. ONLINE STORE Customers SERVICE OF TAILORED CLOTHES RETAIL STORES ! NEXT STORE Our business model is unique because we eliminate the 鍖aws of classic o鍖ine and online retailers 1 2 3 We o鍖er showrooms for hesitant e-shop visitors. Those who cannot 鍖nd the right size in store can order the tailored made clothes Measurements taken in store will be linked to customer`s online account. Next purchase of tailored clothes can be made in one click. Our experience shows: ≒ 40% of purchases in retail store are made by online-store visitors; ≒ 30% of potential buyers* do not purchase offline, because standard S-M-L-XL sizes do not fit them. *potential buyers customers who liked particular models. COMPETITIVE ADVANTAGES 1) Online tra鍖c is being converted into o鍖ine visitors generating revenue higher than of a classical retail store. 2) High conversion level of o鍖ine visitors into buyers due to service of tailored clothes. 3) Rapid growth of loyal customer base, high level of direct tra鍖c to the website. November 2013 Con鍖dential
HIGH QUALITY SERVICE NEXT STORE Our Basic Principles: OWN MANUFACTURING FACILITY IN RUSSIA ≒ ≒ ≒ ≒ ≒ Quality control; Low costs; Flexible batch size; No customs clearance; Low working capital. FAST AND FURIOUS LOGISTICS ≒ Quality control; ≒ Low costs; ≒ High speed of delivery. CLIENT ORIENTED ONLINE SERVICE ≒ Well known online shop; ≒ Online service of tailored cloth; ≒ Possibility to order tailored clothes in one click. November 2013 CHAIN OF RETAIL STORES ≒ Points of measurements; ≒ Show rooms; ≒ Selling points. Con鍖dential
TAILORED CLOTHES ECONOMICS NEXT STORE Individual tailoring is a luxury service, because cost of producing unique model pattern is very high. Main problem: ! ? How to decrease cost of individual tailoring? TAILORED CLOTH COSTS Amount produced Item cost* 1 (cost includes new pattern) 6800 RUB 100 850 RUB 1000 650 RUB * calculation was made for classic shirts Our decision:! 1. Develop a base model; 2. Develop 10 patterns of the same base model for di鍖erent body types. Each pattern has 4 sizes; 3. Take measurements from customer; NEXTSTORE ECONOMICS: 4. Individual tailoring is a selection of the most appropriate pattern and size from 10x4 matrix; Base model Tailored model Selling price 1500 RUB 1800 RUB 5. Produce individual clothes with selected pattern and size; Item cost* 650 RUB 1250 RUB 6. Delivery of tailored cloth to a customer. Pro鍖t 850 RUB 550 RUB *1000+ items November 2013 Con鍖dential
HISTORY AND KEY METRICS First version of NEXTSTORE.ru First shop in Moscow, Novoslobodskaya st. NEXT STORE SKVAMA manufacturing Store at RIO Mall, Moscow Monthly reach*: 1,5K Monthly reach: 45K Monthly reach: 125K Monthly reach: 130K Employees: 3 Employees: 5 Employees: 8 Employees: 12 ARPU: 1,1 rub ARPU: 2,0 rub ARPU: 2,5 rub ARPU: 3,75 rub COGS: 70% COGS: 60% COGS: 55% COGS: 52% Revenue: 500$ Revenue: 20 000$ Revenue: 35 000$ Revenue: 45 000$ *SEO traffic 2th quarter 2010 2th quarter 2011 2th quarter 2013 3th quarter 2013 Launch of NEXTSTORE.ru Opening of the 鍖rst o鍖ine store (street retail) Start of manufacturing SKVAMA Opening of the store at RIO Mall November 2013 Con鍖dential
THE TEAM NEXT STORE KEY EMPLOYEES ALEXEY LEBED ROMAN KIRKIN CEO, Co-founder COO Education: MEPhI! Experience: Tinkoff Digital, BrandHall! Education: MSU (Ph.D. in Physics)! Experience: BrandHall! SAMIR AL-GALAINI SVETLANA TEMNIKOVA Marketing, CRM Manufacturing Engineer Education: HSE Education: Kosygin MSTU 30 years experience in cloth developing and manufacturing CONSULTANTS ALEXEY NECHAEV PAVEL ERSHOV Starategy advisory Co-founder Co-founder Education: HSE, NES! Exp.: Bank of America Merrill Lynch! November 2013 SERGEY BARKALOV Education: MIPT, NES! Exp.: Displair, Tinkoff Digital! Education: MIPT, NES! Exp.: TCS Bank, Tinkoff Digital! Con鍖dential
BUSINESS STRATEGY Q1 14 Q2 14 NEXT STORE Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 EXPANSION STRATEGY Moscow stores 0 2 3 4 4 4 4 4 S.-Petersburg stores 0 0 2 2 2 2 2 2 Regional stores 0 0 0 1 2 3 4 5 Manufacturing facility 1 1 1 1 1 1 1 1 KPIs ARPU (e-store), rub Monthly reach Total revenue, rub EBITDA margin November 2013 5,6 8,4 10,9 13,5 16,1 18,8 20,1 20,4 240 K 290K 360K 460K 590K 750K 920K 1,1M 12M 22M 40 M 52 M 65 M 82 M 101 M 124 M 12% 13% 15% 19% 20% 21% 21% 22% Con鍖dential
CONTACTS NEXT STORE Alexey Lebed, CEO Alexey Nechaev, Strategy Advisory Phone Phone +7 926 472 39 23 +7 926 263 66 88 E-mail alex@nextstore.ru E-mail nechaev.av@gmail.com Address 14, Serebryakova proezd, Moscow, 129343, Russia November 2013 Con鍖dential

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Nextstore presentation

  • 1. NEXT STO RE A N E W L O O K AT YOUTH CLOTHING December 2013 Con鍖dential
  • 2. EXECUTIVE SUMMARY NEXT STORE CURRENT BUSINESS STATE 150 000 monthly reach online store, which provides quality service to our customers. O鍖ine store in RIO mall, Moscow, Russia. Own brand SKVAMA. 100% models designed, engineered by our employees and crafted in Moscow region. OUR OBJECTIVES Service of tailored clothes. 1 000 000 monthly reach e-store, with a high level of conversion visitors into buyers and an extensive client base. 13 o鍖ine stores placed in the biggest Russian cities. Own manufacturing facilities and local delivery. INVESTMENTS NEEDED 2014: 63 M rub! 2015: 32 M rub! Total: 95 M rub! Share: 30% Investor IRR: 47,7% ! December 2013 Con鍖dential
  • 3. NEXTSTORE MISSION Tailored clothes for for Young, Brave, Stylish
  • 4. MAIN IDEA NEXT STORE Problem of well-鍖tting We know how di鍖cult to 鍖nd really well 鍖tted clothes in the store. The problem is double if you have a "non-standard" 鍖gure. Those people are our potential customers. The question is how to make a product for mass market with a reasonable price? The product which will 鍖ts well for a person with any 鍖gure? Well fitted for everyone: 1800 RUB price of shirt, for example OUR DECISION IS CHEAP INDIVIDUAL TAILORING December 2013 Con鍖dential
  • 5. BUSINESS STRUCTURE NEXT STORE The Product OWN BRAND SKVAMA We produce and sell clothes under own trade mark SKVAMA. Currently we are focused on selling basic types of clothes which are in high demand. SKVAMA products contribute up to 70% of our turnover. Most important categories are hoodies (30% of sales), coats (25% of sales), jackets (20% of sales). Distribution Channels E-COMMERCE Online store NEXTSTORE.ru is the main distribution channel. Almost 70% of the revenue comes from the online store. E-shop was launched in June 2010 and already gained a signi鍖cant base of loyal customers. During the last 3 years we learned how to: 1. get new visitors 2. convert visitors to customers. 3 keep customers loyalty. 150 000 unique visitors per month. Revenue 30 000 USD. RETAIL STORES Retail stores are still the main place for purchasing clothes in Russia. We found out that online customers can be successfully converted into o鍖ine buyers: 40% of our o鍖ine shoppers 鍖rst visited our online store. First shop was opened in May 2011 in a street-format. Now we focused at placing new stores in shopping centers and malls across Russia. 1200 visitors per month. Revenue 15 000 USD. November 2013 Con鍖dential
  • 6. OUR VIEW OF IDEAL E-COMMERCE What customers need? NEXT STORE How we complete the 鍖aws WE ALREADY DONE: Regional logistics hub 1 Lower price; Regional logistics hub 2 Free delivery; Free returns; See and try on many models live, before buying only one; Central Warehouse and Manufacture Secure website and payment methods; WE WILL DO: Regional logistics hub 3 ≒ Own manufacturing facility in Moscow region; Well 鍖tted clothes; ≒ Clothes tailored to customer needs; Quick form for repeat order; ≒ Fast delivery due to regional logistic hubs; ≒ O鍖ine stores serve as 鍖tting rooms. Fast delivery; Opportunity to see the product in the showroom. November 2013 Con鍖dential
  • 7. UNIQUE BUSINESS MODEL Our main source of new customers is the online-store. Tra鍖c from: search engines, direct marketing, context adverts, etc. ONLINE STORE Customers SERVICE OF TAILORED CLOTHES RETAIL STORES ! NEXT STORE Our business model is unique because we eliminate the 鍖aws of classic o鍖ine and online retailers 1 2 3 We o鍖er showrooms for hesitant e-shop visitors. Those who cannot 鍖nd the right size in store can order the tailored made clothes Measurements taken in store will be linked to customer`s online account. Next purchase of tailored clothes can be made in one click. Our experience shows: ≒ 40% of purchases in retail store are made by online-store visitors; ≒ 30% of potential buyers* do not purchase offline, because standard S-M-L-XL sizes do not fit them. *potential buyers customers who liked particular models. COMPETITIVE ADVANTAGES 1) Online tra鍖c is being converted into o鍖ine visitors generating revenue higher than of a classical retail store. 2) High conversion level of o鍖ine visitors into buyers due to service of tailored clothes. 3) Rapid growth of loyal customer base, high level of direct tra鍖c to the website. November 2013 Con鍖dential
  • 8. HIGH QUALITY SERVICE NEXT STORE Our Basic Principles: OWN MANUFACTURING FACILITY IN RUSSIA ≒ ≒ ≒ ≒ ≒ Quality control; Low costs; Flexible batch size; No customs clearance; Low working capital. FAST AND FURIOUS LOGISTICS ≒ Quality control; ≒ Low costs; ≒ High speed of delivery. CLIENT ORIENTED ONLINE SERVICE ≒ Well known online shop; ≒ Online service of tailored cloth; ≒ Possibility to order tailored clothes in one click. November 2013 CHAIN OF RETAIL STORES ≒ Points of measurements; ≒ Show rooms; ≒ Selling points. Con鍖dential
  • 9. TAILORED CLOTHES ECONOMICS NEXT STORE Individual tailoring is a luxury service, because cost of producing unique model pattern is very high. Main problem: ! ? How to decrease cost of individual tailoring? TAILORED CLOTH COSTS Amount produced Item cost* 1 (cost includes new pattern) 6800 RUB 100 850 RUB 1000 650 RUB * calculation was made for classic shirts Our decision:! 1. Develop a base model; 2. Develop 10 patterns of the same base model for di鍖erent body types. Each pattern has 4 sizes; 3. Take measurements from customer; NEXTSTORE ECONOMICS: 4. Individual tailoring is a selection of the most appropriate pattern and size from 10x4 matrix; Base model Tailored model Selling price 1500 RUB 1800 RUB 5. Produce individual clothes with selected pattern and size; Item cost* 650 RUB 1250 RUB 6. Delivery of tailored cloth to a customer. Pro鍖t 850 RUB 550 RUB *1000+ items November 2013 Con鍖dential
  • 10. HISTORY AND KEY METRICS First version of NEXTSTORE.ru First shop in Moscow, Novoslobodskaya st. NEXT STORE SKVAMA manufacturing Store at RIO Mall, Moscow Monthly reach*: 1,5K Monthly reach: 45K Monthly reach: 125K Monthly reach: 130K Employees: 3 Employees: 5 Employees: 8 Employees: 12 ARPU: 1,1 rub ARPU: 2,0 rub ARPU: 2,5 rub ARPU: 3,75 rub COGS: 70% COGS: 60% COGS: 55% COGS: 52% Revenue: 500$ Revenue: 20 000$ Revenue: 35 000$ Revenue: 45 000$ *SEO traffic 2th quarter 2010 2th quarter 2011 2th quarter 2013 3th quarter 2013 Launch of NEXTSTORE.ru Opening of the 鍖rst o鍖ine store (street retail) Start of manufacturing SKVAMA Opening of the store at RIO Mall November 2013 Con鍖dential
  • 11. THE TEAM NEXT STORE KEY EMPLOYEES ALEXEY LEBED ROMAN KIRKIN CEO, Co-founder COO Education: MEPhI! Experience: Tinkoff Digital, BrandHall! Education: MSU (Ph.D. in Physics)! Experience: BrandHall! SAMIR AL-GALAINI SVETLANA TEMNIKOVA Marketing, CRM Manufacturing Engineer Education: HSE Education: Kosygin MSTU 30 years experience in cloth developing and manufacturing CONSULTANTS ALEXEY NECHAEV PAVEL ERSHOV Starategy advisory Co-founder Co-founder Education: HSE, NES! Exp.: Bank of America Merrill Lynch! November 2013 SERGEY BARKALOV Education: MIPT, NES! Exp.: Displair, Tinkoff Digital! Education: MIPT, NES! Exp.: TCS Bank, Tinkoff Digital! Con鍖dential
  • 12. BUSINESS STRATEGY Q1 14 Q2 14 NEXT STORE Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 EXPANSION STRATEGY Moscow stores 0 2 3 4 4 4 4 4 S.-Petersburg stores 0 0 2 2 2 2 2 2 Regional stores 0 0 0 1 2 3 4 5 Manufacturing facility 1 1 1 1 1 1 1 1 KPIs ARPU (e-store), rub Monthly reach Total revenue, rub EBITDA margin November 2013 5,6 8,4 10,9 13,5 16,1 18,8 20,1 20,4 240 K 290K 360K 460K 590K 750K 920K 1,1M 12M 22M 40 M 52 M 65 M 82 M 101 M 124 M 12% 13% 15% 19% 20% 21% 21% 22% Con鍖dential
  • 13. CONTACTS NEXT STORE Alexey Lebed, CEO Alexey Nechaev, Strategy Advisory Phone Phone +7 926 472 39 23 +7 926 263 66 88 E-mail alex@nextstore.ru E-mail nechaev.av@gmail.com Address 14, Serebryakova proezd, Moscow, 129343, Russia November 2013 Con鍖dential