3 Keys for Getting Acquired - According to the CEO of a Brand Holding Company

This guy is CEO of one of a handful of public companies who acquire brands. When he tells you the 3 things he looks for in brands to acquire, we should listen. After having successfully gone through an acquisition ourselves, I’m realizing our journey would have been much simpler if we simply focused on these 3 things and ignored everything else. Spoiler alert: revenue growth or ROAS aren’t on the list.

Here are the 3 things that matter most, our experience at Chubbies, and 3 actions you can take to make progress on those 3 things today.

Including the video because Dave Powers, the CEO of Deckers Brands (HOKA and UGG owner), lays it out for us in his own words.

Click the gif below to watch the full video clip.

1) Revenue Resilience.

Powers says, “The DTC model is hard to keep sustained because you're spending so much on marketing. 25%, 30% of your revenue you're putting back into marketing to fuel the sales. The minute you pull that marketing away to make profit, your sales lines drops like a rock.”

Chubbies experience: Building revenue resilience was the biggest transition we made in our company. We transitioned from a direct-response company to a brand who found ways to confidently invest in brand building, enabling 70% of customer acquisition to happen organically

Action you can take: If you know revenue drops like a rock if ads/discounts turn off, prioritize nothing higher than figuring out ways to mitigate that.

2) Wholesale Distribution.

From Powers, “If you don't have wholesale, if you don't have other sources of revenue, your ecom site quickly goes from high growth, decent profit - low single digits if you're lucky - to just dropping like a rock from both top line and bottom line."

Chubbies experience: We transitioned from "DTC 'till I die" to "we need to be where our customer is"

Action you can take: If you're reticent to expand sales channels, take a hard look at why. The best brands are broadly available.


3) Margins.

“Unless you just have a brand that also is in wholesale, has the margin structure to be successful at wholesale, and is important enough on its own to sustain the growth versus just digital marketing spend.”

Chubbies experience: As the brand building investments started to manifest, we saw reduced price sensitivity as we came out with new products at higher price points, enabling margin expansion.

Action you can take: Experiment with a price increase. Or, analyze social commentary + CX tickets mentioning price and see if/how trends have changed.

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All he cared about was revenue resilience, distribution and margin.

Not revenue growth, ROAS or marketing efficiency ratios.

Powers closes with the fundamental driver all 3 things: BRAND

"A great brand, meaningful to consumers will outlast the marketing spend”

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Is your brand meaningful to your audience?

If so, why?

If you don't know exactly why, find out asap.

Then, prioritize, above all else, telling that story with everything you do.
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Thanks for reading. If this post was helpful, here are 4 things you can do right now to 

• Get more strategic + tactical nuggets on brand building, 

• Tactics on connecting brand building to financial impact, 

• And specific things you can do to build strong emotional connections with your audience: 

1) Subscribe to the Brand Builders podcast on YouTube or Spotify, and Apple Podcasts. 
2) Apply to join our brand builders slack community (suuuuper small group exclusively for brand founders and operators), 
3) Follow Tom and Preston on Linkedin for regular posts on this stuff
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