Today Santa Monica, CA-based Wittlebee, a monthly subscription service that sends parents boxes of kids basics, announced that it has acquired Cottonseed Clothing Company, an apparel brand that makes t-shirts and other cotton clothing for kids, and the terms of the deal weren’t disclosed. The acquisition means that now Cottonseed items will only be offered exclusively through Wittlebee boxes, which provide clothing for kids up to age five. The company was the first startup incubated by Science, a technology incubator founded by former myspace CEO Mike Jones, who is also on the Wittlebee board.
This is the first acquisition for Wittlebee, which launched in February 2012. Cottonseed was the company’s first vendor, and founder and former myspace VP Sean Percival said Cottonseed founder Erin Gutierrez will be helping out as an advisor and consultant going forward. Percival said the acquisition made sense since they were already ordering much of the company’s inventory.
“One day a few months ago I just called up and said ‘send me everything you have,'” Percival said in an interview. “We started talking with her about expanding the relationship, and she was looking to kind of wind down the business because she didn’t have the time to run it, and it was still generating sales, there was still a lot of interest in it, and so we really just came to a deal with her,” Percival said. The deal also gives Wittlebee manufacturing capabilities, which they didn’t have in-house prior to the deal (Percival said he filled his first orders by buying clearance merchandise from Gap).
Parents pay $39.99 for a Wittlebee subscription, which gets them a monthly delivery of $100 worth of children’s clothing. The boxes contain six items, including onesies, t-shirts, and pants, and are targeted at newborns to five-year-olds. The items in the boxes are chosen by a team of “mom stylists,” and parents can update an online style profile to tailor the items they receive, or change the sizes they want to receive. Parents can exchange clothes they aren’t happy with, though they’re responsible for paying for postage.
Right now the company is working with about 20 different brands, from multinational companies like Gap to boutique shops. In terms of competitors, he said it’s “any store you can find in a mall,” but also said he views kids’ apparel sites like FabKids and thredUP as direct competitors. And while Citrus Lane, another subscription box for parents, could be significant competition down the line if they add more children’s clothing to their mix of offerings.
Percival said the company will look at acquisitions in the future, both to build out their manufacturing capabilities, and to absorb any competitors in the space. “I like owning the whole value chain, so I think there will probably be additional [acquisitions],” he said. “I also feel that there are so many of these subscription commerce companies out there, and there are only room for so many of them, and some of them are already closing up shop. As they close up shop, I’m interested in doing a roll up and bringing their assets into our properties as well.”
While right now the company only delivers to customers in the U.S., he said international expansion is on the list. The first international launch will likely be in Canada, where Percival said they’ve had the most interest, and then likely the UK. And though right now Wittlebee’s products are only targeted at kids up to age five, he eventually wants to expand the product line to fit kids up to age 12, as well as add more accessories. “I want to go all the way up to 12,” he said. “We’re buying and developing products to support that. I want to graduate them, once they go beyond five, they go beyond kindergarten.”
Though he declined to share exact numbers, Percival said the company has “thousands of subscribers,” and is getting most of their customers through Facebook, Pinterest, and referrals from existing customers. While subscription businesses are exploding, and Percival himself noted that not all of them will thrive going forward, the company seems to be steadily growing its base of parents. As the subscribers get older, the product line will need to evolve to match, and if the company can also add manufacturing into the mix, they should be well-positioned to evolve both the products and the subscriber base.
