2024 Inventory and Investing to Grow

This post is a about a couple of Hero's Journeys. Yours in our clothes. Ours building an apparel company from nothing. And the one some customers have joined us on, together.

As we kick off a capital round to climb the next mountain, I realize we are not the same heroes we were before.

We’re stronger. A good bit wiser. And we just vanquished the most persistent problem that vexed Bluffworks for the past two years.

Our customers have been our lifeblood. And wow, in our recent survey did you send a clear message about our past, our present, and where you want us to go.

Lets start with what we've created so far.

A Great Foundation

There is a second side to Bluffworks that customers don't often see, which is the business aspect of running a small company.

We're proud of our metrics. Like the repeat purchase rate, customer lifetime value, and cost of new customer acquisition that are critical for any online business.

However, there's no doubt our greatest asset is our customers -- who find us for travel but then use us back home. Fully 80% of our customers wear our clothes for "many things, such as work, travel, leisure, etc."

Yet in our survey, you shared something more special than numbers, which is your experience with our products and brand:

"Wearing the same pair of Bluffs to a Broadway show in London, a hike in the Swiss alps, and running down the sand dunes in Jordan over a period of six months around the world."
"The night before a wedding a pen had leaked inside my Bluffworks blazer... washed it in a hotel sink, then hung it to dry in the shower... in the morning it looked perfect."
I have been wearing Bluffworks clothes almost everyday for the past 5 years.

This is inspiring feedback, and shows how acutely we have developed our market position and customer base. But it's only of value when you have something to sell.

We Had a Problem With Inventory

I bet you noticed that over the past two years, we've had an issue with inventory.

Here are some not-so-fun facts:

Since early 2022, we suffered from a lack of inventory to the degree that we missed a whopping 30% of additional sales (counting only actual customer requests).
40% of those lost sales were to people new to Bluffworks.
And despite the efforts of our Customer Service, 80% of those potential new customers never returned. The window had closed.

What happened? In short, once the pandemic was over it was not a supply problem, it was a resource problem. Our ability to run on fumes during the pandemic meant there was no cash for when travel returned.

This year is different. We'll have 85% more inventory than last year, so core sellers (like Ascender, Gramercy, Threshold, etc.) will all be sufficiently stocked.

It won't be perfect, as after selling 30% of our Departure denim's launch inventory in the first two weeks, you can expect stock will run low. But, our supplier is ready to replenish them fast.

We can deliver great new products and keep them in stock pending one more ingredient. And that's capital.

Bluffworks Is Raising Capital

With the timing of inventory under control, the last piece of the puzzle is financial resources, and it's why we're here.

Bluffworks is raising capital to land inventory and ensure our out of stock situation doesn't happen again.

Our lender and vendor are already onboard, supporting our larger inventory purchases. Now, we are conducting a modest capital raise to complete the round by growing our pool of investors through the same cohort that has shown so much passion for the brand: our customers.

Do you remember how you felt when you found Bluffworks? Specifically how it changed your wardrobe and what you pack? We want to bring this feeling to more men and women, alike. But we need resources to do it.

We are in pursuit of three objectives:

Deliver the products our customers need.
Fully express the brand message.
Provide a return to our investors.

There is a list of people and special resources without whom there would be no Bluffworks: It goes from Kickstarter to the SBA during the pandemic. It includes our supportive business partners and my incredible team. Definitely, my family. Plus one specific advisor and a critical group of investors, almost 60% of which were customers first.

Without any of these partners, Bluffworks would not be outfitting you today.

Our Plan

In the short term, new capital will help us:

Fulfill demand. Everyone knows our top priority is to maintain the inventory required to meet existing demand.
Expand the product line. In the survey, expanding our product line was your #1 suggestion for how to improve Bluffworks.

"Wore your pants for international travel, went touring and out to a nice dinner without changing pants, shirts were another story, three different ones."

About new product, your #1 request was for more shirts. We believe the limited size of our product line is inversely proportional to our potential.
Improve our communications. When asked how to make shopping at Bluffworks easier, you told us that providing product fit videos, more detailed product information and guidance on styling were your priorities; in that order.

Projects like these can deliver an excellent return because they improve the conversion rate of all of our traffic.
Better outfit women. You know, I used to ride the subway in a dress to test our women's fabrics. It was a special time. But circling the wagons during the pandemic made us unable to continue what we started.

While we currently stock our knit Threshold collection for women, it is far from the end-all wardrobe she needs. Based on her feedback, response to our survey (30% of replies on the last one) and all the orders we've shipped tells us she is eager for the same superpower wardrobe we offer guys. And she deserves it.
Accelerate our marketing. There is more we can do to spread the word. In fact, I know someone who projects the trajectory of a brand based on one metric alone and that's advertising spend. Currently, our return on advertising is high, such that we should be spending more. More budget would mean more new customers; loyal, profitable, passionate people to join the tribe.

When investors consider an opportunity, they are looking for well-defined levers to pull to apply their capital. From our view, stocking inventory to capture sales, building products to meet existing demand and investing in the acquisition of loyal customers seems like as clear of levers as one could ask for.

Closing

A venture capitalist once remarked that we were "incredibly efficient with capital," to which my mentor-CFO replied "that's because we don't have any!" Every time we raise capital, it is a humbling effort. But boy, do we use it well.

By now all of this is baked into our DNA. Capital efficiency, perseverance, long term value. Like Joseph Campbell's hero who's been changed by the journeys he's been on, we continuously learn.

This very well may be the last investment round open to customers, so whether you are most excited by new product ideas, the nuts and bolts of eCommerce, or the prospect of Senior Preferred shares, I’d love to hear from you.

To learn more - or just cheer us on - please message us at team@bluffworks.com so we can speak. I will respond to your email personally.

Look at this:

"10 days of PIT EWR LHR LCY FRA FRA DEL PNQ PNQ DEL ORD PIT plus 9 trains and 4 hotels; Bluffworks all the way."

Now there's a hero. It's why we're here.

Thank you,

Stefan Loble

(Consistent with SEC guidelines, no offer of investment is being made.)