Dustin Jones sees the future of direct-to-consumer and it’s unified.
At least, that’s the hope behind Unified Commerce Group, which Jones — an expat of Fung Retailing Group and Macy’s — founded with Greg Freihofner in 2019.
Unified set out to create a group of brands that could find strength in numbers. And now that the DTC crowd is trying to figure out what comes next after a tough year, that just might happen — witness Spiritual Gangster.
Unified inked a deal to buy a majority stake of the Los Angeles-based athleisure brand, with existing management participating in the acquisition. Lambros Piscopos, who had been chief financial officer and chief operating officer of Spiritual Gangster, will take over the reins as chief executive officer.
The deal will park the brand alongside Frank and Oak, which Unified acquired in 2020 and transitioned to a multichannel retail approach from a subscription-based model.
More acquisitions are on the way.
Jones, who leads Unified as CEO, told WWD that the company looked at 160 brands over 2021 and 2022 — a time frame that saw valuations at DTC brands spike alongside pandemic-fueled e-commerce.
Now that valuations have fallen across both the public and private markets, there’s more potential for buyers and sellers to connect.
Unified is zeroing in on brands that — like Spiritual Gangster — focus on a core purpose and a consumer’s way of life, but could use the benefits of a little more scale.
“What we identified was this opportunity to take advantage of the falling valuations of direct-to-consumer brands by creating a company that was prepared to buy them when their cap table needed that overhaul,” Jones said in an interview with WWD.
“We think 2024 will be a great consolidation opportunity for us,” Jones said. “The pipeline for us right now is very full….We expect that we’re going to get to five to seven brands in the next couple of years. For us, it’s all about the economics of the deal, the right profile of the brand and founder that allow us to move with speed. We have very, very patient shareholders, so we’re not anxious about how many brands we get at any specific time.
“We’re a second chance for a lot of these brands to realize the value expectations that they had originally seen for themselves and for the company,” he said. “The way we structure our deals, the way we come in and empower it, we’re like a second breath of fresh air for the people that stay on and the founders that continue to own equity in this company.”
Spiritual Gangster ticked all the boxes for Unified.
“The company has proven that it can make money,” Jones said. “It’s made money in the past and has a history of making money, though it had a very difficult 2023 for different reasons, which allowed us to come in.
“But the brand is in the perfect space,” he said. “What we are obsessed with at this brand is its very high margins” as well as the connections it built with consumers.
“Spiritual Gangster started as a yoga brand,” Jones said. “It started as a brand that was really centered on wellness and spiritualism. It started as a brand that championed cause and championed human growth.”
Now Unified is looking to help it continue in that mission, with a little extra support.
Ian Lopatin, founder, said: “My wife Vanessa and I built Spiritual Gangster over more than a decade to be a leading voice in the world of yoga and wellness. It has always been important to us that the future stewards of the brand share our vision and values. I’ve known Dustin, Greg and Lambros for a number of years, and have strong confidence that they will bring new opportunities to bring the brand to its full potential.”
