RuffleButts and RuggedButts
DEAL
EPISODE SUMMARY
🕓 Air Date: October 18, 2013
Asking For:
$600,000 for 7%
Investor:
Lori Greiner
Deal:
$600,000 for 9%
PRODUCT SUMMARY
RuffleButts offers a charming range of children's apparel, including ruffled bloomers and a full clothing line for girls up to age 6, with a commitment to quality and affordability.
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Background Story
RuffleButts, founded by the Schaub family, emerged from a heartfelt quest for a unique baby gift. Amber and Mark Schaub, alongside their children Aubrey and Jonas, launched the company out of their desire to revive a nostalgic item from Amber’s childhood – the beloved ruffled bloomers she fondly remembered as “RuffleButts.” Faced with the frustration of being unable to find these charming bloomers in stores, they embarked on a mission to bring them back into fashion.
Based in Flower Mound, Texas, the Schaub family began their entrepreneurial journey with a simple yet innovative idea: to adorn infants’ bottoms with adorable ruffles, thus introducing a touch of whimsy and nostalgia into modern baby apparel. Amber’s background in real estate, combined with Mark’s support, provided the foundation for their venture into the world of children’s fashion. The company’s evolution wasn’t limited to ruffled bloomers alone. It expanded into designing and manufacturing a full clothing line for girls up to the age of 6, responding to customer demand and market trends.
Furthermore, acknowledging the need for diversity, they introduced a boys’ line named RuggedButts, ensuring that their brand catered to a broader audience. Fuelled by their passion for creativity, commitment to quality, and inspired by their own family experiences, the Schaub family has transformed RuffleButts into a thriving business. Their journey epitomizes the entrepreneurial spirit, demonstrating how a simple idea born out of personal nostalgia can blossom into a successful enterprise, resonating with parents worldwide who appreciate both the charm and practicality of their designs.
The Product
RuffleButts offers a delightful range of children’s apparel designed to infuse charm and playfulness into every wardrobe. The signature product, ruffled bloomers, serves as the cornerstone of the brand, adding a whimsical touch to infants’ bottoms. Crafted from high-quality materials, these bloomers boast softness and durability, ensuring comfort for little ones while retaining their shape and vibrant colors wash after wash.
In addition to bloomers, RuffleButts offers a comprehensive clothing line for girls up to the age of 6, featuring dresses, tops, bottoms, swimwear, and accessories adorned with playful ruffles and delightful patterns. The introduction of RuggedButts expands their offerings to include a boys’ line, featuring rugged yet charming apparel suitable for active little gentlemen.
RuffleButts’ products are not only stylish but also functional, catering to the practical needs of parents who seek both adorable aesthetics and reliable quality for their children’s clothing. Whether for everyday wear, special occasions, or beach outings, RuffleButts’ versatile designs provide the perfect balance of fashion and functionality.
Customers can purchase RuffleButts products through their online store, offering convenient access to their entire collection. With prices typically ranging around $25 per piece, RuffleButts offers affordable luxury, allowing parents to indulge in adorable fashion for their little ones without breaking the bank.
How It Went
The company’s position before Shark Tank
RuffleButts has established itself as a formidable player in the children’s apparel market, boasting robust financial health and a strong market position. With annual sales reaching $3.7 million in the previous year and projected to surpass $4.5 to $5 million in the current year, the company has demonstrated consistent growth since its inception. Moreover, their profitability from year one underscores their sound business model and efficient operations. The company’s success can be attributed not only to its innovative product offerings but also to strategic partnerships and a loyal customer base.
RuffleButts likely collaborates with retail outlets, online platforms, and distribution networks to reach a wider audience. Their customers comprise parents and caregivers seeking charming, high-quality clothing for their children, drawn to RuffleButts’ unique designs and affordable pricing. In terms of funding, RuffleButts has achieved impressive growth without resorting to external debt, a testament to their prudent financial management and sustainable growth strategy.
With Amber owning 51% of the company and Mark holding 49%, the company remains largely family-owned, allowing for nimble decision-making and alignment with their vision and values. The company’s current structure likely includes key departments such as design, manufacturing, sales, marketing, and operations, with a dedicated team driving growth and innovation. With profits reinvested into the business and available capital bolstering their expansion efforts, RuffleButts is well-positioned to capitalize on market opportunities and further solidify its presence in the children’s apparel industry.
The Negotiations:
In the negotiation phase on Shark Tank, RuffleButts, led by the Schaub family, navigated through a series of compelling offers from the Sharks, ultimately securing a deal that aligned with their strategic vision. Barbara Corcoran and Lori Greiner emerged as the final contenders, both recognizing the potential of RuffleButts’ brand and product line. Barbara initially proposed $600,000 for a 12% equity stake, with a unique twist – $300,000 would be structured as a loan, reflecting her confidence in the company’s ability to repay.
Meanwhile, Lori offered the same $600,000 investment for a 10% equity stake, with a repayment condition of 24 months. After careful consideration, the Schaub family countered with a compromise, proposing an 8% equity stake for the same $600,000 investment. Despite Barbara’s efforts to sway their decision with her extensive experience, the Schaub family ultimately chose to partner with Lori Greiner, citing her willingness to negotiate down to a 9% equity stake as a crucial factor.
The negotiation process highlighted the importance of strategic alignment and mutual understanding between entrepreneurs and investors. By securing a partnership with Lori Greiner, RuffleButts gained not only financial support but also access to Lori’s expertise and network, positioning the company for continued growth and success in the competitive children’s apparel market.
