Acorns Deck AE2_Final

AC RNS

WE MAKE THE ADORABLE AFFORDABLE

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AC RNSWE MAKE THE ADORABLE AFFORDABLE

ACORNSACORNS sells pre-loved clothing, furniture and accessories for infants, sells pre-loved clothing, furniture and accessories for infants, toddlers and moms to betoddlers and moms to be WITH A TWIST

Specialized childrens' resale & thrift stores avoid selling used cribs due to CPSC safety regulations, limiting those business' appeal to a broader range of first time and returning customers

Childrens' resale shops lose sales due to small store sizes and hard to find product jammed on racks. Maternity clothing lacks display space & fitting rooms. Small footprints limit ability to offer larger pieces like playpens and rockers,

Traditional thrift stores have little, if any, merchandise suitable for Traditional thrift stores have little, if any, merchandise suitable for children or moms to bechildren or moms to be

ACORNS BREAKS THE MOLD; SPACIOUS DESIGN ALLOWS A WIDER SELECTION OF PRE-LOVED MERCHANDISE FOR TODDLERS AND MOMS

PLUS SPACE FOR LARGER ITEMS AND NEW CRIBS

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BUSINESS DESCRIPTION

ACORNS provides one stop shopping for mothers to be, infants and toddlers, with a large selection of pre-loved clothing, accessories and furniture. The buying process and is simplified and more convenient for shoppers

ACORNS appeals to new parents using the hook of selling stylish, moderately priced, North American manufactured cribs enabling Acorns to convert these shoppers into repeat customers as their children grow

ACORNS will be the premier value one-stop shopping destination for infants, toddlers and maternity clothing & accesories in the San Gabriel Valley

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MARKET DESCRIPTION

The Durable Baby Goods industry is a highly fragmented $1.1 billion market made up of mostly independent owners and void of any dominant competitors

No retailer, new or second hand, offers a 'one-stop shopping' experience for infants, toddlers and moms to be

First time parents prefer newer merchandise, second time parents shop for value

Existing thrift stores (Goodwill), low price retailers (Old Navy, Costco) and premium outlet malls demonstrate the appeal of Acorns' warehouse retail business model; Warehouse Stores = Value

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LOCAL MARKET DESCRIPTION

South Pasadena is an affluent community of 26,000. Average household income is $61,000. The community attracts many young families and is highly supportive of locally owned businesses

Within a 5 mile radius, the population expands to 675,500, 80,000 (11.8%) being toddlers in the 0 – 4, 5 - 9 age groups. 250,00 (36.8%) of adults are between ages 20 – 44, the primary family forming ages. Income & demographics are ideal for this type of business

ACORNS has no direct competitors within 3 miles and only two similar businesses (consignment or resale, no new cribs) within 10 miles

The western San Gabriel Valley is a virtual shopping desert for new cribs and juvenile furniture, creating significant upside potential

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1, 3, & 5 mile Primary Target Market Areas

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1101 Mission Street, South Pasadena

ACORNS' vision is to re-purpose and transform a vacant 5,500 sq. ft distribution warehouse into a retail marketplace

Shoppers associate warehouse stores with value. Existing warehouse format retailers (Old Navy, Costco), thrift stores (Goodwill) and premium outlet malls have proven the success of this business model

1101 Mission is an ideal location for ACORNS, offering synergies with nearby businesses, including an indoor toddler play center, several family restaurants, a gymnastics facility and proximity to the weekly Farmer's Market attracting many young families

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1101 Mission Street - BEFORE

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1101 Mission Street - AFTER

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MANAGEMENT TEAMAlan Ehrlich, MBA – 20 years in retail and franchising. Experience includes senior & C-level positions in multi-unit businesses, Skills include management, operations, training, pricing, sales analysis, technology and finance

Diana Narzelli – 30 years multi-unit retail experience in the resale industry, including store level and district management. Skills include merchandising, marketing, promotion, store operations, training & administration

Tillie Levin – 15 years experience in store design and construction management

Michael Miller – Asst Professor of Management and Small Business Development at Loyola Marymount University

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STRATEGIC OBJECTIVES

15% compounded annual growth rate through the first five years

Exceed $1,000,000 revenue within three years

Extend the ACORNS brand as the premier pre-loved maternity and juvenile 'go to' place from the initial 5 mile radius to 10 by the 3rd year

Grow two or more new locations by the 5th year, adding units every 18 months thereafter, expanding brand recognition as the premier pre-loved destination across the San Gabriel and Santa Clarita Valleys

Build the franchise model for future growth

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Financial Projections, Single Location(000)

Year 1 Year 2 Year 3

SALES 774.1 913.5 1,077.9

COGS 276.5 35.7% 319.7 35.0% 361.1 33.5%

Gross Margin 497.7 64.3% 593.8 65.0% 716.8 66.5%

Variable Exp 235.7 30.4% 271.4 29.7% 307.8 28.6%

Fixed Exp 183.9 23.8% 210.0 23.0% 240.2 22.3%

EBITDA 78.0 10.1% 112.3 12.3% 168.8 15.7%

Documents

Acorns Deck AE2_Final