Duck, Duck, Acquisition: Wittlebee Taps Kids Clothing Company Cottonseed

By Michael Carney , written on August 28, 2012

From The News Desk

If there’s two things LA’s known for it’s fast fashion and subscription ecommerce. It was little surprise then when Science Inc. technology studio startup Wittlebee launched earlier this year to deliver kids basics on monthly repeat. Five months after closing its $2.5 million Series A financing, the startup founded by former MySpacer Sean Percival is expanding its direct manufacturing capability through its first ever acquisition.

Today Wittlebee announced its acquisition of Chicago-based Cottonseed Clothing Company under undisclosed terms. Cottonseed was one of Wittlebee’s first merchants, supplying the company’s members with cotton t-shirts, onesies, leggings, and other basic apparel in 24 solid colors.

The products were so popular that the subscribers managed to buy out all of Cottonseed's inventory on multiple occasions. Whittlebees needs were actually outpacing all of its existing wholesale and direct to consumer business, so the acquisition made sense for both companies, according to Percival. Now the brand will be available exclusively to Wittlebee subscribers.

Wittlebee has already started manufacturing its own label in-house to deliver more complex garments like dresses, but will continue to deliver products under the Cottonseed brand, as well as offer third-party brands like Tea Collection and Carters.

“Parents have very strong brand affinities with kids clothes so we want to continue to serve those preferences,” Percival told me in an email. “They also like to discover new brands, so we're still including those in every box.”

For $39.99 per month, parents get monthly boxes of high-quality clothing customized to their own personal tastes and the size and gender of their child (newborn to five years old). The company uses stay-at-home parent customers as customer service reps.

The CEO went on to predict additional acquisitions for Whittlebee in the future. He explained that following the recent explosion in subscription commerce, many brands and manufacturers have begun to run out of steam. Under these conditions, there's value in looking to roll-up these assets where strategic value can be added, including optimizing costs and bringing aboard additional customers.

In the case of Cottonseed, Percival says the primary impact of the acquisition will be on “profitability and expanding our direct manufacturing ability.” Cottonseed’s manufacturing is done in India and the company’s CEO and founder Erin Gutierrez, along with a small staff, will stay on board as consultants to manage the process for the foreseeable future. Wittlebee manages its own fulfillment out of it Culver City, California warehouse headquarters.

Percival and Science founder Mike Jones both seem happy with Wittlebee’s early growth, although they’ve remained tight lipped with exact metrics. Of all the product categories to offer on a subscription, kids clothing might make the most sense of all and is one I’m inclined to believe could have real staying power.

Kids grow out of clothing in a matter of weeks, and the last thing overworked parents have to do is go shopping for basics. It reasons, then, that a replenishable Baby Gap like product would be a hit. Now with even more control over its supply chain, the already popular service looks to be getting better and more profitable.