“Diversify. In stocks and bonds, as in much else, there is safety in numbers.”- Sir John Templeton
Diversifying investment portfolios has long been taught as a way to mitigate risk and protect against volatility. What is often overlooked is that diversification within a company can be just as important, and is a notable consideration when deciding what may constitute a “safer” investment.
When a company has a diverse range of revenue streams, it not only has the ability to protect cash flow during tough times, but can create opportunities to enter new markets or expand market share.
- Amazon (AMZN) – Started in 1995 strictly selling books and generating only $511,000 in revenue. We are now living in a “Prime” world as net revenue reached $136 billion in 2016 through sales in retail, web services, hardware, memberships, and IP.1
- kathy ireland® Worldwide or kiWW® – According to Forbes, Ireland launched her line of socks in 1993 and has since lent her name, taste, and marketing prowess to over 17,000 products producing over $2.5 billion in revenue in 2015.2
One emerging company following a similar growth strategy is Level Brands, an innovative licensing and branding company, for which Kathy Ireland serves as Chairman Emeritus and Chief Brand Strategist. The company successfully raised $12 million and listed on the NYSE under ticker symbol ‘LEVB’ on the NYSE this past Friday.
The company is working to grow a portfolio of multi-dimensional, IP-protected lifestyle brands. The company currently operates four distinct businesses which sell a wide array of licensed consumer products in art, beauty, fashion, marketing, entertainment, and health & wellness.
Current operating companies making headway:
- I’M1 – Millennial lifestyle brand for men. Co-founded by Kathy Ireland and Tommy Meharey – a marine, model, millennial, and father.
- Beauty & Pin-Ups- Professional hair care company which began sales exclusively in the salon category. Celebrated by Cosmopolitan® magazine for impacting the beauty industry with supermodel Katie Meade – the first woman with Down Syndrome to redefine the meaning of beauty, in the fashion and beauty industries.
- EE1 – Brand management services company that produces and markets recording, film, live events, etc. Co-founded by Kathy Ireland and Nic Mendoza – Vice President of kathy ireland® Worldwide.
- kathy ireland® Health & Wellness – Targets both baby boomers and millennials. Believe that licensed products and services under this brand can benefit from a wide distribution path of grocery, drug, wholesale, direct response, and online sales.
The company has only been in business for 2 years and is already attracting high gross margins across its target market sectors. Net loss is down and in 6 months, two of the company’s divisions— Ireland Men One (I’M1) and Encore Endeavor One (EE1) — generated $2.5 million (cash and non-cash). In addition to their four businesses, the company has licensing fees from 2 brand partnerships, advisory fees from 7 brand partnerships, and 8 brand partnerships with royalties from generated sales. Level Brands can also benefit from its equity position in successful deals while maintaining a safety net from its wide variety of licensed products.
Level Brands’ quick expansion is supported by a seasoned management team. Their success will depend on their ability to establish strategic licensing deals and execute successful brand acquisitions, but it’s off to a promising start. As with all investment opportunities, it’s important to exercise due diligence.
For more information about Level Brands, please visit https://levelbrands.com/
Value Walk is compensated by Crowdfund on behalf of Level Brands for publicizing the offering of Level Brand’s securities. The total fees to be paid to Value Walk for its services are undisclosed amount of dollars, payable in cash.
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