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Parker Clay Launches Community Fundraising Campaign

Santa Barbara-based leather goods label Parker Clay is going public—but not in the traditional sense.

The eight-year-old B Corp, known for its handbags, totes, backpacks and belt bags made by female artisans in Ethiopia, is giving consumers the opportunity to own a piece of its business through a community fundraising round.

After adopting their daughter from Ethiopia, founders Ian and Brittany Bentley launched Parker Clay, building a factory and sourcing infrastructure in the country to create economic opportunity for women. Now, they’re looking to expand their African operations to meet growing demand for their products in the U.S.—and they’re asking customers to help.

The Bentleys said Obama-era legislation encouraged them to turn to alternative investors for a helping hand. Under Regulation A of the 2012 Jumpstart Our Business Startups Act, or JOBS Act, Parker Clay can raise up to $75 million from the general public and institutional investors during a 12-month period.

“We figured out this could be a perfect vehicle to be able to engage our community beyond just buying a bag—by literally sharing in the company,” CEO Ian Bentley told Sourcing Journal. “A lot of companies at our scale would be looking at a Series A round, but this is so much more in alignment with today’s conscious consumer.”

Parker Clay sells its handbags, totes, backpacks and more through its e-commerce site and at four recently-opened stores.
Parker Clay

Parker Clay was built on an ethos of community development and participation—foundational principles the CEO hopes to preserve even as the company scales. “We want to invite people to the table who perhaps wouldn’t be invited before,” he said, noting that Regulation A “democratizes investment, versus limiting it to an exclusive handful of people who can afford to do it.”

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The law, and its provisions, are in their relative infancy and the campaign represents new territory for the DTC brand and the fashion industry at large. “It’s a new offering and invitation [to consumers], so I feel like we’re kind of pioneering this space,” he said.

Because stock is being offered to non-accredited public investors, the company has had to spend several years jumping through bureaucratic hoops—compiling financial disclosures, going through SEC audits, and creating comprehensive documentation of business practices to be shared with prospective shareholders. Parker Clay has partnered with Canadian web platform DealMaker, which has helped develop an e-commerce experience for buyers that is nearly as easy as purchasing one of the company’s bags online, Bentley said. Through an investment microsite, Parker Clay is offering Class B stock at 50 cents per share with a minimum investment of $500.

The brand's factory employs 200 workers, most of whom are women.
Parker Clay

Bentley said Parker Clay plans to invest the capital it raises into hiring, machinery and a brick-and-mortar strategy. With demand outpacing supply in recent seasons, the company isn’t in a place where it can forge wholesale partnerships. Generating $20 million in revenue last year, Parker Clay has seen 76 percent year-over-year growth. It wants to build its factory workforce and create new workstations, which include sewing machines and other leatherworking tools. “We’re at about 200 employees in total at our factory, and the capacity is between 400 to 500,” the CEO said. “So we’ve got room to more than double what we’ve currently got, and the efficiencies also increase…so we really think this could triple or quadruple in terms of what our capacity is at our factory.”

Since opening its Addis Ababa, Ethiopia factory in 2018, Parker Clay has streamlined its product development process and is ready to scale. “This year, we’ve innovated new products and we can go from idea to market sometimes in a matter of weeks,” he said, noting that owning its manufacturing has helped to shorten design-to-production timelines and increase speed to market.

CCO Brittany Bentley said the brand will expand upon its range of leather goods.
Parker Clay

Expansion is also key to supporting the company’s ESG mission to create more economic opportunity in the region, Brittany Bentley said. Parker Clay has been soliciting input from government and non-profit sources to assess and address the needs of the community through the pandemic and the civil war that ended last month. The directive from those parties has been “to just create more employment, especially for vulnerable women, and do that by creating jobs that are sustainable for them,” the chief creative officer said. Many women are providing for families, and are eager to learn skills that will be broadly marketable “even after Parker Clay.” Ian Bentley added that the company’s presence in Ethiopia has an impact on upstream suppliers such as farmers as well as the logistics workforce that enables the DTC to process shipments to the U.S., and growing the manufacturing base will increase those opportunities.

Brittany Bentley, who leads product design, said Parker Clay plans to “stick with leather goods and really continue to excel in that category,” making use of the artisan labor force it has cultivated. “There’s still a lot of designs we’re looking forward to strengthening, as far as fashion trends or colorways and different styles for how things are changing in the world,” she said, pointing to the recent trend toward smaller handbags.

The DTC player is also expanding its retail footprint, opening its first four stores in the California cities of Santa Barbara, San Luis Obispo and Los Angeles as well as Denver during 2021 and 2022. “There’s been a lot of growth in that this past year, and we’re looking at other opportunities in some of our target cities this coming next year as well,” she said. The fundraising campaign will dictate future openings.

The brand hopes to expand capacity through investments in hiring and machinery.
Courtesy

Physical retail has turned out to be an important proving ground for consumers increasingly seeking to experience, not just transact, the CEO said. Storytelling is easier in person, and the brand’s social impact is on display each time a shopper purchases a bag. “When someone buys a product, we remove the tag and write on the back how many hours of empowerment that bag created,” he said. Those tags are displayed on store walls.

“It’s about bringing the community into an experience and into the stores as well,” he said. “We think there’s a lot more opportunity out there like that.”