RYU (Respect Your Universe) is a tailored urban athletic
apparel brand that engages in the development, marketing, and
distribution of apparel, bags and accessories. Our products are
engineered for the fitness, training and performance of the
multi-discipline athlete. Our products are designed, developed and
tested at our corporate headquarters in Vancouver, BC, Canada, and our
Beta 37.5 design lab in Squamish, BC, Canada. Production takes place in
factories located in North America and Asia.
The RYU brand was created by a team of industry experts in 2015 that
found a gap in the apparel market whereby the male athlete was
underserved, the female athletic market was awash by a sea of sameness,
and nobody was designing carry systems for active people to build their
lives around. This team transformed the RYU brand and created a new
category: Urban Athletics. RYU is the new standard of tailored
innovation for the urban athlete.
RYU Apparel Reports Third Quarter 2017 Results
VANCOUVER, Nov. 17, 2017 /PRNewswire/ - RYU Apparel Inc. (TSX VENTURE:
RYU & Frankfurt Stock Exchange: RYA) (the "Company"), creator of
urban athletic apparel, is pleased to report its financial results for
the nine months ended September 30, 2017.
Revenue in the third quarter of 2017 was $745,226 125% higher than
revenue of $331,700 during the same period in 2016. Now into its second
year of operations, the RYU team is encouraged with its sales record to
date and a 45% gross profit for the quarter.
Three months ended Nine months ended September 30, September 30, (unaudited) (unaudited)
In Canadian dollars 2017 2016 2017 2016
Revenue $745,226 $331,700 $1,853,460 $892,199
Gross profit $338,789 $139,352 $852,821 $413,530
Gross profit % 45% 42% 46% 46%
Third quarter 2017 results included additional revenue from the
Company's new retail store locations in Downtown Vancouver, Park Royal
South in West Vancouver and Queen St. West in Toronto, whereas third
quarter revenue in 2016 was comprised primarily of sales from the
Flagship retail store and e-commerce sales. The Queen St. West location
in Toronto was only open for twelve days within the quarter.
During the nine months ended September 30, 2017, the Company achieved the following milestones:
RYU partnered with netamorphosis, an award winning digital and creative
agency from New York City, to facilitate and maximize RYU's digital and
ecommerce business across the United States and globally. Work has
begun to further accelerate and expand e-commerce revenue and
performance. High priority tasks will start to deploy in the fourth
quarter of 2017 and will continue into the first half of 2018.
RYU continues to show a balanced ratio of apparel sales between men and
women at 51% and 49% respectively. By identifying an underserved gap in
the industry for men, and developing the Beautiful Tough™ brand
positioning that's resonating with women, RYU has achieved an enviable
gender balance that is rare in the industry.
As an omni-channel retailer, RYU currently has 17% of revenue from e-commerce.
RYU's retail store expansion plan is on target to have five stores open
by the end of 2017. The Company currently has four stores in operation
and one under construction. In addition to the opening of Park Royal
South on March 28, 2017 and Queen St. West in Toronto on September 19,
2017, management anticipates that the fourth quarter 2017 will see the
opening of its first enclosed mall location at Metrotown in Vancouver.
RYU secured its first USA retail store location in Williamsburg, in the
New York City borough of Brooklyn. The 2,800 square foot store in the
newly renovated heritage building on 76, North 4th St. will perfectly
connect RYU's urban aesthetic and appeal with Williamsburg's style and
community. The store is scheduled to open during Q2 2018.
Subsequent to quarter end, the Leone Family continued to support the
RYU brand by advancing $1,385,000 in unsecured, non-interest bearing
promissory notes. This is continued confidence by the Leone Family for
the vision of the brand.
Third quarter summary:
Third quarter revenue of $745,226 compared with $331,700 in the same
period in fiscal 2016. Revenue increased by 125% as it included sales
from three versus one retail store and growth in e-commerce sales from
its improved website that had higher visitor traffic than in early
2016. Our fourth retail store location at Queen St. West location in
Toronto was only open for twelve days within the quarter.
Third quarter gross profit of $338,789 compared with $139,352 in the
same period in fiscal 2016, an increase of 143%. Gross profit
percentage of 45% was achieved in the third quarter of 2017.
Third quarter expenses of $2,705,913 compared with $1,791,632 in the
same period in fiscal 2016. The increase of 51% is primarily due to the
expansion of our retail operations from one to four stores.
Third quarter comprehensive loss was $2,367,124 compared with
$1,420,175 in the same period in fiscal 2016. The loss was 67% higher
due to the 2016 recovery of the warrant derivative of $232,105, a
non-cash item. Without these outliers, comprehensive loss in the third
quarter of 2017 and 2016 would have been $2,367,124 and $1,652,280
respectively. The $714,844 (43%) increase is due to variances in gross
profit net of higher occupancy costs and depreciation from running four
retail stores versus one.
The Company closed a short form prospectus offering, raising gross proceeds of $3,737,500 on July 25, 2017.
Nine month revenue of $1,853,460 compared with $892,199 in the same
period in fiscal 2016. Revenue increased by 108% as it included sales
from three stores versus one retail store and growth in e-commerce
sales from its improved website that had higher visitor traffic than in
early 2016. The Park Royal location opened March 2017 and the Queen St.
West location in Toronto opened September 19, 2017.
Nine month revenue in 2017 was adversely affected following a
challenging period of approximately six months during which we
experienced shortages in styles and sizes and sold out of bags due to
popular demand. In 2017, we have dedicated significant resources to
produce innovative new product, place inventory deposits to fill gaps,
and restock our core items. Deliveries of our 2017 buy plan began at
the end of the second quarter of 2017 and are scheduled to continue
into the first quarter of 2018.
Nine month gross profit of $852,821 compared with $413,530 in the same
period in fiscal 2016, an increase of 106%. Gross profit percentage of
46% in the nine months ended September 30, 2017 was in line with the
comparative period in 2016.
Nine month expenses of $7,508,185 compared with $5,968,224 in the same
period in fiscal 2016. The increase of 26% is due to the increase in
retail operations from one to four stores and the development of our
2017 marketing strategy.
Nine month comprehensive loss was $6,647,661 compared with $3,840,465
in the same period in fiscal 2016. The loss was 73% higher due to the
2016 recovery of the warrant derivative of $1,499,609, a non-cash item,
and the $214,620 gain on settlement of debt for two transactions that
took place in 2016. Without these outliers, comprehensive loss during
the nine months ended September 30, 2017 and 2016 would have been
$6,655,364 and $5,554,694 respectively. The $1,100,670 (20%) increase
is mostly due to the higher occupancy costs attached to running four
versus one retail stores, net of the additional gross profit generated.
The Company closed a short form prospectus offering, raising gross
proceeds of $3,734,441 on February 2, 2017, a non-brokered private
placement, raising gross proceeds of $2,252,841 on June 22, 2017, and a
short form prospectus offering, raising gross proceeds of $3,737,500 on
July 25, 2017.
For convenience, copies of the Company's unaudited condensed
consolidated interim statements of financial position, comprehensive
loss and cash flows for the periods discussed herein are attached to
this news release. Readers are encouraged to review such
statements in their entirety, including the notes thereto, on
SEDAR. Full details of the Company's financial performance can be
obtained by viewing the unaudited condensed consolidated interim
financial statements and corresponding MD&A available on SEDAR.
For regular updates on RYU Apparel visit: http://ryu.com
On Behalf of the Board
RYU APPAREL INC.
Marcello Leone, CEO, President and Chairman of the Board
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information that involve
various risks and uncertainties regarding future events. Such
forward-looking information can include without limitation statements
based on current expectations involving a number of risks and
uncertainties and are not guarantees of future performance of the
Company, such as statements that: (i) the expansion plan is to have
five stores open by the end of 2017, and the intention to open the
Company's first enclosed mall location in Metrotown within the fourth
quarter of 2017; (ii) the intention to open its New York City location
during the second quarter of 2018; (iii) that high priority tasks with
netamorphosis will start to deploy in the fourth quarter of 2017 to
accelerate and expand e-commerce revenue and performance and will
continue into the first half of 2018; and (iv) that deliveries of
inventory are expected to continue into the first quarter of 2018.
There are numerous risks and uncertainties that could cause actual
results and the Company's plans and objectives to differ materially
from those expressed in the forward-looking information, including the
ability of the company to finance operations, the ability of the
management team to execute on its business plan, risks in the apparel
industry in general, and delays and risks associated with renovating
and opening new store locations. Actual results and future events could
differ materially from those anticipated in such information. These and
all subsequent written and oral forward-looking information are based
on estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice. Except as
required by law, the Company does not intend to update these