Soletron targets $60 billion streetwear market
Soletron, a start-up backed by former Adobe Systems Inc Chief Executive Bruce Chizen, is building an online marketplace for streetwear and sneakers, a market that is worth almost $60 billion by one estimate.
Soletron, run by Shane Robinson and Allen Steigman, raised $265,000 from John Friedman of venture capital firm Easton Capital and New York angel investors in early 2011 and launched its market in November.
Urban wear is a huge niche that no one really pays attention to, said Chizen, who is on Soletron's advisory board with Superbowl MVP Santonio Holmes. To become the Etsy of the streetwear market -- that's the whole idea.
Etsy, an online marketplace for handmade and vintage products launched in 2005, has over 12 million members and saw sales of almost $500 million this year, through November.
Soletron is raising more money in a series A round of venture capital financing early next year and Chizen plans to invest in the business then.
Other advisers include Tom Austin, co-founder of basketball apparel and shoe company AND1, and Bob Rice of investment firm Tangent Capital.
Soletron has about 50 streetwear and sneaker designers selling more than 1,200 products so far. Brands include Dunkelvolk, Nooka and Kanvas Kings.
The company collects transaction fees from linking designers and buyers and generates other revenue from advertising and member subscriptions.
Robinson and Steigman have big plans because their target market is potentially huge. There is little official data on this part of the apparel market, but accounting firm Grant Thorton pegged urban apparel sales at $58 billion in 2006.
U.S. teenagers aged 15 to 19 spend $22 billion a year on fashion products, according to estimates by Piper Jaffray. Action sports brands, Wall Street's term for streetwear brands like Volcom, Quiksilver and Hurley, have been the most popular among wealthier teens since late 2008, according surveys conducted by the investment bank.
Volcom was acquired by French luxury giant PPR this year, and Nike owns Hurley.
This industry is the proverbial sleeping giant of the retail and e-commerce worlds, Robinson said.
Soletron is competing against Karmaloop, an online streetwear retailer that is on course to generate about $130 million in revenue this year. The company, run by Greg Selkoe, has an online marketplace called Kazba, which accounts for about 10 percent of sales.
There's room for more people doing it, Selkoe said.
18 to 24 year-olds have spending power of $90 billion in the U.S. and a good 20 percent of that money goes into buying into this type of clothing and sneakers, he added. Extrapolate globally and that's a massive market.
(Reporting by Alistair Barr in San Francisco; Editing by Steve Orlofsky and Richard Chang)
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