UNMATCHED DAZZLE HATWEAR ANNUAL REPORT 2014
CONTENTS Foreward
1
Company Summary
3
Locations
5
Letter to our Stockholders
7
Financial Report
9
Corporate Information
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foreward
A WORD FROM:
OUR CHIEF FINANCIAL OFFICER It is with great pride and excitement that we release our annual report for Dazzle Hatwear for 2014 fiscal year. Dazzle Hatwear has become a forerunner in its industry. With the perfect combination of innovation, creativity, and a substantial market, Dazzle has eliminated the majority of its competition, providing for endless opportunities in the near future. We have the highest hopes and the best intentions to please our consumers and create the best product. With that being said, it is my pleasure to present to you Dazzle’s Annual Report, a compilation of our financial performance for 2014. I confidently look forward to our future, and plan on many successful years ahead.
Elizabeth O’Hanlon Elizabeth O’Hanlon President and Chief Executive Officer
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foreward
“ Dazzle has eliminated the majority of its competition, providing for endless opportunities in the near future. ” — ELIZABETH O’HANLON Chief Financial Officer
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COMPANY SUMMARY 2014 proved to be one of the most successful years in Dazzle’s brief history. With the introduction of new designs and products, our company has grown and expanded dramatically in the past twelve months. With a dynamic team of fashion and product designers, Dazzle has produced a substantial assortment of unique and funky patterns that appeal to a wide range of individuals. Our ideas and designs have so far proven to be unmatched by other competitors in our industry, helping us cease an opportunity to continue to grow and remain original. The lack of competition combined with a highly talented and creative staff has tremendously contributed to Dazzle’s growth and success in 2014.
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First Quarter Our first quarter proved to be one of the most challenging times for our company. The majority of our time and energy was spent promoting our product and building a solid team.
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A small amount of progress was made during our second quarter. While we had developed a much more cohesive team, a lot of groundwork still needed to be covered to market our product.
Second Quarter
3
Third Quarter The majority of our net sales were made during our third quarter. We were finally able to connect with our target markets and fully understand their interests and desires.
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By this point, the majority of our competition was wiped away as Dazzle continue to crank out new designs at unbeatable prices.
Fourth Quarter
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LOCATIONS
Seattle, WA West Hampton, NY San Diego, CA
Manhattan, NY
Los Angeles, CA San Antonio, TX
Miami, FL Ft. Lauderdale, FL
Honolulu, HA
PLEASE NOTE: Only major cities are labeled. Other Dazzle stores are located throughout the midwest region of the U.S as well as in Southeast Asia and Eastern Europe. 8| 5
St. Petersburg, Russia
Moscow, Russia Beijing, China Toyko, Japan Shanghai, China
Manila, Philippines Bangkok, Thailand
Sydney, Australia
Melbourne, Australia
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LETTER TO OUR STOCKHOLDERS The Three C’s
Expansion Across the World
We believe that success does not come naturally; we attribute our success on our special attention to creativity, communication, and care.
Our very first hats were sold on a street corner in a tiny kiosk at Syracuse University. After selling 25 hats, we realized we may be onto something....
We realize that consumer are constantly craving something new, and something different. For that reason our design team at Dazzle is constantly brainstorming new ideas, new materials and new products to keep our consumers interested.
From there, Dazzle began to make deals with boutiques to sell a small selection of items for a tiny profit. It was originally our goal to see our products in department stores, such as Macy’s and Nordstrom.
Communication has become the sole means by which we learn what works and what does not. We are constantly asking for feedback so we know what to change, what to improve on, what to keep and what to get rid of.
However, our ideas have shifted and Dazzle has decided to establish its own stores, in order to avoid sharing profits with other companies.
Most importantly, we understand the importance of caring about our market. Dazzle has become more than creating a small empire; Dazzle is dedicated to pleasing our customers and producing fun, unique and quality products.
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As of now, we have a total of 43 locations worldwide; 19 Dazzle boutiques sprinkled across the United States, as well as 12 locations in Asia, 8 in Europe and 4 in Australia. We plan to expand to Canada and South America within the next year.
Extensive Growth
Looking Forward
We believe our creativity and our ability to simultaneously to cater to our market is a big deal, and this past year offers evidence that the strategy is working.
It is with pride and excitment that we present these financial numbers. We are hoping that these numbers only increase in the coming years.
While delivering a record number of units to customers, we also delivered our best-ever experience. Our customer satisfaction skyrocketed to 92 percent, up over 25 percent from 2013. Inside existing product categories, we’ve worked hard to increase selection. Selection is up over 20% in the U.S. alone over the prior year, and we now offer 3 times the selection of the average boutique line. Net sales this year increased 26% to a record $3.9 million, and unit sales grew at an even faster 31%. A total of 875,092 Dazzle hats were sold for the 2014 fiscal year.
Plans for the upcoming months include a product line for babies and children as well as a new waterproof material for rainy days. We are hoping to create 6 new patterns for the summer and autumn months. With our 2014 sales, we are looking at establishing more Dazzle locations worldwide. We plan to reach all 7 continents by the year 2020. In doing so, we predict that our new sales with increase and our target market will expand within the next year. We are very excited to see what the future holds for our company..
— Molly Nelson Chief Financial Officer
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IT’S IN THE
NUMBERS
2014 Quarterly Profits by the Millions
The Basics
BOUTIQUES
4
= Projected Sales for 2015
built this year
designs &
31patter ns 568 815,092 JEWELS PER PIECE
PRODUCTS
SOLD THIS YEAR
PROFITS PER QUARTER
33
2014 2
.5 Q1
9 12| |
Q2
Q3
Q4
2014 Customer Growth by the Thousands
Social Media Impact In 2014
34% Twitter
16% Other
800 100
42% Facebook
= Sales for 2013 = Projected Sales for 2015
500
18% Pinterest
GROWTH PER QUARTER
Our marketing strategy for 2014 was to target young groups of individuals via social media sites. Twitter and Facebook proved to be the most effective in gaining our customers attention.
8,921
likes on FACEBOOK
Q1
Q2
3,409
Q3
Q4
new followers
THIS YEAR
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Corporate Information Board of Directors Elizabeth O’Hanlon President - Chief Executive Officer
Heidi Simmons Chief Brand Officer
Gavin Ross Senior Interactive Designer
Molly Nelson Chief Financial Officer
Jeff Van Winkleburg Chief Communications Officer
Gabriella Montag Marketing Coordinator
Lauren Strand Financial Advisor
Nell Fitzgerald Senior Designer
Shaun Belottie Research Strategist
Steve Collins Director of Sales Operations
Taylor Jordan Senior Fashion Designer
Maddie Kennedy Colorist
Headquarters
Trademarks
Stock Listing
Dazzle Hatwear 5128 Pearl Street Boulder, Colorado 80030 - 9342 email: dazzlewear.com t. 720.937.9414
All trademarks in this annual report are owned and licensed by Dazzle Hatwear Inc. Please refer to our Standards Manual to learn more.
Dazzle Hatwear common stalk is traded on the New York Stock Exchange. The Dazzle Hatwear trading symbol is “DAZZ.”
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“Most importantly, we understand the importance of caring about our customers. Dazzle is dedicated to pleasing our market and producing fun, unique and quality products.” — Molly Nelson Chief Financial Officer
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