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UCG is Building a Brand Portfolio for How Consumers ‘Choose to Live’

Navigating today’s apparel retail environment is not easy, but one recently created firm is looking to not only take on the challenges brought on by the Covid-19 pandemic, but spur long-term growth and profitability in an industry that sorely needs it. Unified Commerce Group (UCG), a retail acquisition and advisory group founded earlier this year, is seeking to accomplish this by scaling locally strong, purpose-driven brands out in front of a global audience.

UCG first announced in October that it acquired apparel retailer Frank And Oak for an undisclosed sum, and it could be the first of many investments in a portfolio of fashion, beauty and lifestyle brands. Through access to its multi-disciplinary retail experts and data from shoppers across global markets, UCG wants to leverage its resources to nurture the brand’s strong following within Canada, fuel its expansion into the U.S. and aid its growth into new markets, including Asia.

Dustin Jones, CEO and co-founder of UCG, saw an opportunity to start the business upon noticing the tremendous shift in what consumers wanted out of an apparel retail experience. While there was a major focus on famous brands such Levi’s or Lacoste, for example, or top designer brands such as Ralph Lauren, Michael Kors and Tommy Hilfiger throughout Jones’ apparel career, he says today’s consumers have simply wanted to attach themselves to a larger purpose upon shopping.

“People are more conscious in what and how they consume and where they consume it, where they’re voting for their beliefs through the dollars that they spend and the value they’re attaching to the products they consume has to do with the level of depth that that product has in association to their life,” Jones said. “For us, we saw this shift to purpose-driven, which is not just sustainability, or let’s say cause, it’s about what they do with their lives and how they choose to live them.”

Jones and co-founder Greg Freihofner wanted to build a portfolio of purpose-driven brands that sought to connect with consumers on a global scale, but didn’t necessarily have the structures and resources to do so. Freihofner says target companies typically take in between $50 million and $250 million in annual revenue, usually have a small store presence and have likely reached a “tipping point” in their home market, yet haven’t been able to scale globally.

“To have this international understanding, that’s really the way that a brand is going to grow, right?” Freihofner said. “You’re going to grow by doing increased products, increased breadth of products, and you’re going to grow through reaching new consumers, so you’re going to increase your breadth of geography.”

Jones, Freihofner and chief brand officer Elisabeth de Gramont all have significant experience in China and the overall APAC region. Jones comes from Hong Kong-based Fung Retailing Group, where he led the company’s newest expansion into China by developing Asia Retail Company (ARC). Freihofner advised and completed multiple cross-border transactions for Chinese companies and took public the first Chinese company to be listed on the NYSE Amex. And as the former managing director for APAC at customer collaboration agency C Space, de Gramont assisted major fashion brands such as VF Corp., Burberry and L’Oreal on innovating and adapting their brand strategies to China.

“There just aren’t that many people and organizations that are able to communicate to Western audiences and understand Western brands and consumers, and then do the same thing in Asia, specifically China as well,” de Gramont told Sourcing Journal.

Frank And Oak shares UCG’s purpose, scaling goals

Montreal-based Frank And Oak is UCG’s first strategic investment and sets the stage for future global brand investments and acquisitions.

“Imagine if they had launched in the U.S. as a digitally native company, or in China as a digitally native company, likely they would have achieved the size of Reformation or Everlane, but they launched in a smaller market,” Jones said. “As a function of that, even though they had terrific revenues, they’re somewhat handicapped and they need to expand internationally in order to achieve the end goal of the brand that they’ve built that has deserved the success of a much larger scale.”

The eco-friendly apparel retailer, which filed for bankruptcy in June, aligns heavily with the purpose-driven narrative UCG is setting. To start 2020, the retailer outlined five new sustainable materials goals for 2022, including cutting all virgin plastic from its supply chain and using only recycled polyester fiber to make its shell fabrics, labels and trims.

As a certified B Corporation, Frank And Oak makes a commitment to upholding high standards of social and environmental performance to “balance profit with purpose,” according to B Lab, the nonprofit that administers the certification.

Data is the key to brand expansion, new markets

UCG also lists handbag and accessories retailer Radley London, Singapore-based designer fashion company Lisa Von Tang and luxury children’s fashion brand Velveteen as partners on its website. But beyond the international potential that many of these brands have, UCG also is collecting and acting on a deluge of customer data at its fingertips that would, ideally, enable each company to complement the other within a full portfolio.

Frank And Oak’s direct-to-consumer background was enticing for UCG since the retailer had immediate insight into which consumers were buying from them, giving a relevant target at the jump.

“When we go into other markets, first we merge the market data that’s available with what we know as proprietary data from our brands to be able to project who will be our target consumer in these new markets,” de Gramont said. “We’d also find out who out potential consumers are from a demographic standpoint, from a shopper behavioral standpoint and from a psychographic standpoint. Therefore, we can market to them in a much more targeted and high-ROI way.”

Jones highlighted that Frank And Oak had 40 different attributes for every customer who buys from the ethical fashion firm’s subscription service.

“Having those attributes allows them to be able to use machine learning to predict more accurately what types of products they can design and prepare and what consumer wants will be,” Jones said. “It also allows them to better target new consumers.”

Alibaba’s business model served as inspiration for the way UCG plans to analyze this data, with the Chinese e-commerce giant having “hundreds” of attributes for every consumer, according to Jones. As soon as it acquires a new consumer, all of these data points are immediately collected in the company’s data platform, enabling it to use predictive analytics to personalize the shopping experience across all channels.

More investments in the pipeline?

For now, UCG appears to be focused on the fashion, beauty and lifestyle sectors within retail. Upon identifying Frank And Oak as its first acquisition, the UCG team looked at more than 70 companies that could potentially fit in the overall brand portfolio.

“There were doors that were left open,” Jones said, indicating that the firm plans on making other announcements about investments “in the next couple of months” that would complement Frank And Oak.

Frank and Oak’s then-$19 million debt was restructured and eliminated as part of the acquisition. UCG will keep all of Frank And Oak’s employees, and CEO Jeremy Brown will remain in place. All of the company’s 19 Canadian stores will stay open.

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