Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers |
Auditor Location | Melbourne, Australia |
Auditor Firm ID | 1379 |
Cover Page
Cover Page - shares | 12 Months Ended | |
Dec. 31, 2021 | Feb. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 001-40828 | |
Entity Registrant Name | a.k.a. Brands Holding Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-0970919 | |
Entity Address, Address Line One | 100 Montgomery Street | |
Entity Address, Address Line Two | Suite 1600 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94104 | |
City Area Code | 415 | |
Local Phone Number | 295-6085 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | AKA | |
Security Exchange Name | NYSE | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
ICFR Auditor Attestation Flag | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 128,647,836 | |
Documents Incorporated by Reference | Portions of the registrant's definitive proxy statement for its 2022 Annual Meeting of Stockholders (“Proxy Statement”), to be filed within 120 days of the registrant's fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K. | |
Entity Central Index Key | 0001865107 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 38,832 | $ 26,259 | |
Restricted cash | 2,186 | 840 | |
Accounts receivable | 2,663 | 1,183 | |
Inventory, net | 115,783 | 33,124 | |
Prepaid income taxes | 4,059 | 0 | |
Prepaid expenses and other current assets | 20,809 | 4,080 | |
Total current assets | 184,332 | 65,486 | |
Property and equipment, net | 14,657 | 2,121 | |
Operating lease right-of-use assets | 26,415 | 4,477 | |
Intangible assets, net | 98,287 | 29,102 | |
Goodwill | 363,305 | 88,253 | |
Other assets | 850 | 0 | |
Total assets | 687,846 | 189,439 | |
Current liabilities: | |||
Accounts payable | 25,088 | 4,689 | |
Accrued liabilities | 53,375 | 18,169 | |
Sales returns reserve | 6,887 | 3,517 | |
Deferred revenue | 11,344 | 4,165 | |
Income taxes payable | 0 | 3,118 | |
Operating lease liabilities, current | 5,721 | 1,234 | |
Current portion of long-term debt | 5,600 | 6,353 | |
Total current liabilities | 108,015 | 41,245 | |
Long-term debt | 103,182 | 0 | |
Operating lease liabilities | 21,370 | 3,262 | |
Other long-term liabilities | 1,333 | 144 | |
Deferred income taxes, net | 2,920 | 5,904 | |
Total liabilities | 236,820 | 50,555 | |
Commitments and contingencies (Note 15) | |||
Stockholders’ equity and partners’ capital: | |||
Preferred stock, $0.001 par value; 50,000,000 and zero shares authorized; zero shares issued or outstanding | 0 | ||
Common stock, $0.001 par value; 500,000,000 and zero shares authorized; 128,647,836 and zero shares issued and outstanding | 129 | ||
Partnership units | [1] | 108,197 | |
Additional paid-in capital | 453,807 | 727 | |
Accumulated other comprehensive income (loss) | (11,080) | 5,839 | |
Retained earnings | 8,170 | 14,138 | |
Noncontrolling interest | 0 | 9,983 | |
Total stockholders’ equity and partners’ capital | 451,026 | 138,884 | |
Total liabilities, stockholders’ equity and partners’ capital | $ 687,846 | $ 189,439 | |
[1] | Excelerate, L.P. was the predecessor entity to a.k.a. Brands Holding Corp. Refer to Note 1 for additional information |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2021$ / sharesshares |
Statement of Financial Position [Abstract] | |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 |
Preferred stock, shares outstanding (in shares) | 0 |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 |
Common stock, shares issued (in shares) | 128,647,836 |
Common stock, shares outstanding (in shares) | 128,647,836 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 562,191 | $ 215,916 | $ 102,440 |
Cost of sales | 254,527 | 89,515 | 46,575 |
Gross profit | 307,664 | 126,401 | 55,865 |
Operating expenses: | |||
Selling | 144,345 | 58,313 | 28,091 |
Marketing | 58,120 | 17,871 | 7,666 |
General and administrative | 88,816 | 28,077 | 17,515 |
Total operating expenses | 291,281 | 104,261 | 53,272 |
Income from operations | 16,383 | 22,140 | 2,593 |
Other expense, net: | |||
Interest expense | (9,485) | (329) | (272) |
Loss on extinguishment of debt | (10,924) | 0 | 0 |
Other expense | (1,213) | (156) | 133 |
Total other expense, net | (21,622) | (485) | (139) |
Income (loss) before income taxes | (5,239) | 21,655 | 2,454 |
Provision for income tax | (852) | (6,850) | (1,012) |
Net income (loss) | (6,091) | 14,805 | 1,442 |
Net loss (income) attributable to noncontrolling interests | 123 | (471) | (48) |
Net income (loss) attributable to a.k.a. Brands Holding Corp. | $ (5,968) | $ 14,334 | $ 1,394 |
Net income (loss) per share: | |||
Basic (in usd per share) | $ (0.06) | $ 0.21 | $ 0.02 |
Diluted (in usd per share) | $ (0.06) | $ 0.21 | $ 0.02 |
Weighted average shares outstanding: | |||
Basic (in shares) | 93,231,377 | 69,846,362 | 61,988,641 |
Diluted (in shares) | 93,231,377 | 69,846,362 | 61,988,641 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (6,091) | $ 14,805 | $ 1,442 |
Other comprehensive income (loss): | |||
Currency translation | (27,619) | 11,355 | 244 |
Total comprehensive income (loss) | (33,710) | 26,160 | 1,686 |
Comprehensive loss (income) attributable to noncontrolling interests | 10,824 | (1,256) | (413) |
Comprehensive income (loss) attributable to a.k.a. Brands Holding Corp. | $ (22,886) | $ 24,904 | $ 1,273 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, PARTNERS’ CAPITAL(1) AND REDEEMABLE NONCONTROLLING INTEREST - USD ($) $ in Thousands | Total | IPO | Culture Kings | Third Estate LLC (mnml) | Common Stock | Common StockIPO | Common StockCulture Kings | Common StockThird Estate LLC (mnml) | Partnership Units | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Additional Paid-In CapitalCulture Kings | Additional Paid-In CapitalThird Estate LLC (mnml) | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Non-controlling Interest | ||
Beginning Balance (in shares) at Dec. 31, 2018 | 0 | 93,362,500 | [1] | |||||||||||||||
Beginning Balance at Dec. 31, 2018 | $ 79,524 | $ 0 | $ 85,583 | [1] | $ 141 | $ (4,610) | $ (1,590) | $ 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of units (in shares) | 0 | 20,398,838 | [1] | |||||||||||||||
Issuance of units | 22,164 | $ 0 | $ 22,164 | [1] | ||||||||||||||
Equity-based compensation | 353 | 353 | ||||||||||||||||
Cumulative translation adjustment | 244 | (121) | 365 | |||||||||||||||
Noncontrolling interest from acquisition | 8,314 | 8,314 | ||||||||||||||||
Net income (loss) attributable to a.k.a. Brands Holding Corp. | 1,442 | 1,394 | 48 | |||||||||||||||
Ending Balance (in shares) at Dec. 31, 2019 | 0 | 113,761,338 | [1] | |||||||||||||||
Ending Balance at Dec. 31, 2019 | 112,041 | $ 0 | $ 107,747 | [1] | 494 | (4,731) | (196) | 8,727 | ||||||||||
Beginning balance at Dec. 31, 2018 | 0 | |||||||||||||||||
Ending balance at Dec. 31, 2019 | 0 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of units (in shares) | [1] | 406,504 | ||||||||||||||||
Issuance of units | 450 | $ 450 | [1] | |||||||||||||||
Equity-based compensation | 1,380 | 1,380 | ||||||||||||||||
Cumulative translation adjustment | 11,355 | 10,570 | 785 | |||||||||||||||
Net income (loss) attributable to a.k.a. Brands Holding Corp. | 14,805 | 14,334 | 471 | |||||||||||||||
Repurchase of incentive units | (1,147) | (1,147) | ||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2020 | 0 | 114,167,842 | [1] | |||||||||||||||
Ending Balance at Dec. 31, 2020 | 138,884 | $ 0 | $ 108,197 | [1] | 727 | 5,839 | 14,138 | 9,983 | ||||||||||
Ending balance at Dec. 31, 2020 | 0 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of units (in shares) | 10,000,000 | 25,746,282 | ||||||||||||||||
Issuance of units | 82,669 | $ 95,721 | $ 10 | $ 82,669 | $ 95,711 | |||||||||||||
Purchase of Petal & Pup noncontrolling interest | (20,198) | (10,599) | (9,599) | |||||||||||||||
Purchase of Culture Kings noncontrolling interest (in shares) | 21,809,804 | |||||||||||||||||
Purchase of Culture Kings noncontrolling interest | $ 132,278 | $ 22 | $ 132,256 | |||||||||||||||
Equity-based compensation | 8,043 | 8,043 | ||||||||||||||||
Cumulative translation adjustment | (17,925) | (16,919) | (1,006) | |||||||||||||||
Net income (loss) attributable to a.k.a. Brands Holding Corp. | (5,346) | (5,968) | 622 | |||||||||||||||
Reorganization transactions (in shares) | (94,780,338) | (139,914,124) | ||||||||||||||||
Reorganization transactions | $ 0 | $ 95 | $ (190,866) | 190,771 | ||||||||||||||
Issuance of common stock in the acquisition of mnml (in shares) | 2,057,695 | |||||||||||||||||
Issuance of common stock in the acquisition of mnml | $ 17,305 | $ 2 | $ 17,303 | |||||||||||||||
Change in tax bases of Culture Kings’ assets related to purchase of Culture Kings’ noncontrolling interest | $ 19,595 | $ 19,595 | ||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2021 | 128,647,836 | 128,647,837 | 0 | [1] | ||||||||||||||
Ending Balance at Dec. 31, 2021 | $ 451,026 | $ 129 | $ 0 | [1] | $ 453,807 | $ (11,080) | $ 8,170 | $ 0 | ||||||||||
Redeemable Noncontrolling Interest | ||||||||||||||||||
Noncontrolling interest from purchase of Culture Kings | 142,718 | |||||||||||||||||
Purchase of Culture Kings noncontrolling interest | (132,278) | |||||||||||||||||
Cumulative translation adjustment | (9,694) | |||||||||||||||||
Net income (loss) | (746) | |||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 0 | |||||||||||||||||
[1] | Excelerate, L.P. was the predecessor entity to a.k.a. Brands Holding Corp. Refer to Note 1 for additional information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (6,091) | $ 14,805 | $ 1,442 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation expense | 2,694 | 353 | 467 |
Amortization expense | 14,016 | 6,409 | 5,760 |
Amortization of inventory fair value adjustment | 15,908 | 0 | 0 |
Amortization of debt issuance costs | 596 | 0 | 0 |
Non-cash interest expense | 11 | 0 | 0 |
Loss on extinguishment of debt | 10,924 | 0 | 0 |
Lease incentives | 361 | 0 | 0 |
Non-cash operating lease expense | 6,246 | 0 | 0 |
Equity-based compensation | 8,043 | 1,380 | 353 |
Deferred income taxes, net | (11,951) | (2,908) | (1,705) |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | (858) | (833) | (47) |
Inventory | (32,131) | (9,375) | (15,059) |
Prepaid expenses and other current assets | (11,543) | 20 | (2,707) |
Accounts payable | 6,038 | (2,776) | 5,115 |
Income taxes payable | (9,329) | 3,688 | (1,567) |
Accrued liabilities | 26,678 | 8,648 | 6,542 |
Returns reserve | 3,091 | 863 | 945 |
Deferred revenue | 7,197 | 1,493 | 1,133 |
Lease liabilities | (5,932) | (55) | (161) |
Net cash provided by operating activities | 23,968 | 21,712 | 511 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (249,302) | (600) | (20,425) |
Purchase of noncontrolling interest | (20,198) | 0 | 0 |
Purchase of intangible assets | (841) | (451) | (372) |
Purchases of property and equipment | (7,734) | (1,328) | (1,031) |
Net cash used in investing activities | (278,075) | (2,379) | (21,828) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of issuance costs | 96,863 | 0 | 0 |
Proceeds from line of credit, net of issuance costs | 34,150 | 10,889 | 0 |
Repayment of line of credit | (42,204) | (10,099) | (1,581) |
Proceeds from issuance of debt, net of issuance costs | 254,134 | 0 | 0 |
Repayment of debt | (155,762) | 0 | 0 |
Proceeds from issuance of units | 82,669 | 450 | 22,164 |
Net cash provided by financing activities | 269,850 | 1,240 | 20,583 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,824) | 735 | 482 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 13,919 | 21,308 | (252) |
Cash, cash equivalents and restricted cash at beginning of period | 27,099 | 5,791 | 6,043 |
Cash, cash equivalents and restricted cash at end of period | 41,018 | 27,099 | 5,791 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 38,832 | 26,259 | 5,472 |
Restricted cash | 2,186 | 840 | 319 |
Total cash, cash equivalents and restricted cash | 41,018 | 27,099 | 5,791 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 7,901 | 278 | 334 |
Income taxes paid, net of refunds | 20,626 | 4,875 | 4,431 |
Supplemental disclosure of non-cash investing activities: | |||
Consideration payable in connection with a business acquisition | 4,901 | 0 | 728 |
Fair value of common stock issued in connection with the purchase of mnml | 17,305 | 0 | 0 |
Right-of-use asset additions under operating leases | 4,073 | 2,740 | 233 |
Offering costs not yet paid | 1,142 | 0 | 0 |
Debt issuance costs not yet paid | $ 121 | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business a.k.a. Brands Holding Corp. (together with our wholly owned subsidiaries, collectively, the “Company”), which operates under the name “a.k.a. Brands” or “a.k.a.,” is an online fashion retailer focused on acquiring and accelerating the growth of next-generation, digitally native fashion brands targeting Gen Z and Millennial customers. The Company is headquartered in San Francisco, California, with buying, studio, marketing, fulfillment and administrative functions primarily in Australia and the United States. Initial Public Offering In September 2021, the Company completed an initial public offering (the “IPO”), in which the Company issued and sold 10,000,000 shares of its newly authorized common stock for $11.00 per share for net proceeds of $95.7 million, after deducting underwriting discounts and commissions of $6.6 million, and offering costs of $7.7 million. Reorganization Transactions a.k.a. Brands Holding Corp. was formed as a Delaware corporation on May 20, 2021 to be the issuer of common stock in the IPO. Excelerate, L.P. (“Excelerate”), a Cayman limited partnership, and the predecessor entity to a.k.a. Brands Holding Corp., had historically been the holding company of the entities that owned and operated the a.k.a. businesses prior to the IPO. The equity interests of Excelerate, which included the Series A partner units and incentive units, were owned by affiliates of Summit Partners (“Summit”), certain other investors and certain of our executive officers and directors and other members of management. In connection with the IPO, a reorganization was undertaken to cause Excelerate to become a wholly-owned subsidiary of a.k.a. Brands Holding Corp. Immediately prior to the reorganization, Summit, management and certain other investors exchanged their limited partnership interests in Excelerate for limited partnership interests in New Excelerate, L.P. (“New Excelerate”), and New Excelerate became a limited partner of Excelerate. Immediately prior to the pricing of the IPO, New Excelerate and other Excelerate investors transferred their interests in Excelerate to a.k.a. Brands Holding Corp., in exchange for common stock in a.k.a. Brands Holding Corp (the “New Excelerate Reorganization”). As a result, Excelerate became a wholly-owned subsidiary of a.k.a. Brands Holding Corp. As a result of the Culture Kings acquisition in March 2021 (refer to Note 3 for additional information), Excelerate indirectly owned 55% of the equity interests in CK Holdings, LP (“CK Holdings”), which owned 100% of the Company’s Culture Kings business prior to the IPO. The remaining 45% of the equity interests in CK Holdings were held by certain minority investors. Immediately following the New Excelerate Reorganization, the Company completed a series of transactions in which the minority investors exchanged their remaining interests in CK Holdings for 21,809,804 newly issued shares of a.k.a. Brands Holding Corp. common stock. The number of shares issued in exchange for the minority interests was determined based on the relative valuations of CK Holdings and consolidated a.k.a. at the time of the IPO. Excelerate had historically owned 66.7% of the equity interests in P&P Holdings, LP (“P&P Holdings”), which operated the Company’s Petal & Pup business prior to the IPO. The remaining 33.3% of the equity interests in P&P Holdings were held by certain minority investors. On August 19, 2021, the Company repurchased approximately 6.0% of the equity held by the P&P minority investors for AUD $5.0 million. In connection with the completion of the IPO, the Company used a portion of the net proceeds from the IPO to fund the acquisition of the remaining 27.3% of the equity interests in P&P Holdings then owned by the P&P minority investors for cash of approximately AUD $22.8 million. Following the completion of this purchase, P&P Holdings became a wholly-owned subsidiary of a.k.a. Brands Holding Corp. Refinancing Transactions In March 2021, certain subsidiaries of the Company entered into senior secured credit facilities that provided the Company with a $125.0 million senior secured term loan facility and up to $25.0 million aggregate principal in revolving borrowings (the “Fortress Credit Facilities”), and also issued $25.0 million in senior subordinated notes to an affiliate of Summit (the “Summit Notes”) to provide financing for the Company’s acquisition of Culture Kings (refer to Note 3 for additional information on the Culture Kings acquisition). In connection with the IPO, certain subsidiaries of the Company entered into a new senior secured credit facility inclusive of a $100 million term loan and a $50 million revolving line of credit. The Company used borrowings under this new senior secured credit facility’s term loan, together with a portion of the proceeds from the IPO, to repay the Fortress Credit Facilities and Summit Notes in full and subsequently terminated them. Refer to Note 8 for additional information. Historical Units Prior to the IPO, incentive units had been issued to certain directors and members of management. These incentive units had a requirement that such shares could not participate in distributions and earnings of Excelerate, L.P. until after the holders of the Series A partner units received their return of capital plus a specified threshold amount per unit. Accordingly, at no time prior to IPO had such threshold been met. In September 2021, in connection with the IPO, all previous ownership interests in Excelerate, L.P., held by New Excelerate and other Excelerate investors were exchanged for shares of common stock in a.k.a. Brands Holdings Corp. in direct proportion to their respective Series A partner units and incentive units, subject to a reverse split factor of 61.25%. All unit, per unit and related information presented in the accompanying consolidated financial statements have been retroactively adjusted, where applicable, to reflect the impact of the split of units held by New Excelerate investors into a proportionate amount of shares of a.k.a. common stock. The terms of the incentive units remained unchanged and individual holders of such units will only be entitled to participate in the distributions and earnings of New Excelerate once the holders of the Series A partner units receive their return of capital plus a specified threshold amount per unit. However, as New Excelerate was issued shares of common stock in direct proportion to its combined Series A partner units and incentive units, New Excelerate will participate in all distributions and returns of the Company in relation to the total amount of shares of a.k.a. common stock that it holds. Prior to the IPO, a.k.a. used the two-class method in calculating earnings per unit and had not deemed the incentive units to be potentially dilutive due to the requirement that such shares cannot participate in distributions and earnings of the Company until after the Series A units receive their return of capital plus a specified threshold amount per unit, and such threshold had not been met. Accordingly, basic and diluted earnings per share presented on the condensed consolidated statements of income for all periods prior to the IPO are the same. Post-IPO, the common stock held by New Excelerate includes shares issued in proportion to the ownership interests in respect to the incentive units. Therefore, the impact of the incentive unit ownership is included in the common stock issued and outstanding after the IPO. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of a.k.a. Brands Holding Corp. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. On an ongoing basis, the Company evaluates items subject to significant estimates and assumptions. As of December 31, 2021, the effects of the ongoing COVID-19 pandemic on our business, results of operations and financial condition continue to evolve. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, restricted cash, and accounts receivable. Although the Company’s deposits held with banks may exceed the amount of federal insurance provided on such deposits, the Company has not experienced any losses in such accounts. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents for the amounts reflected on the consolidated balance sheets. As of December 31, 2021 and 2020, the Company had $28.2 million and $10.9 million, respectively, on deposit in banks outside of the United States. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity (at date of purchase) of three months or less to be cash equivalents. Cash equivalents, which consist primarily of money market accounts and restricted cash are carried at cost, which approximates fair value. Restricted Cash Restricted cash primarily relates to letters of credit which are held as collateral under various lease agreements. Restricted cash is presented separately from cash and cash equivalents on the accompanying consolidated balance sheets. Accounts Receivable Accounts receivable consists of trade accounts receivable relating to the credit card receivables arising from the sale of products to customers through the Company’s digital platforms. Trade accounts receivable is reported net of an allowance for doubtful accounts. The Company had no allowance for doubtful accounts as of December 31, 2021 and 2020. Inventory, Net Inventories consist of finished goods and are accounted for using an average cost method. Inventory is valued at the lower of cost or net realizable value. Cost of inventory includes import duties and other taxes and transport and handling costs. The Company records a provision for excess and obsolete inventory to adjust the carrying value of inventory based on assumptions regarding future demand for the Company’s products. Lower of cost or net realizable value is evaluated by considering obsolescence, excess levels of inventory, deterioration and other factors. The Company analyzes the quantity of inventory on hand, the quantity sold in the past year, the anticipated sales volume, the expected sales price and the cost of making the sale when evaluating the net realizable value of its inventory. If the sales volume or sales price of specific products declines, additional write-downs may be required. Excess and obsolete inventory is charged to cost of goods sold in the period the write-down is estimated. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of advance payments on inventory to be delivered from vendors, prepaid packaging and insurance. Deferred Offering Costs Deferred offering costs consist primarily of legal, accounting and other fees related to the IPO which were recorded in prepaid expenses and other current assets on the consolidated balance sheets prior to the IPO. After the completion of the IPO in September 2021, deferred offering costs of $7.7 million were reclassified to stockholders’ equity and recorded net against the proceeds from the IPO. No offering costs were deferred as of December 31, 2021 or 2020. Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation. Repair and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three Estimated useful life (years) Furniture and fixtures 5 Machinery and equipment 5 Computer equipment and capitalized software 3 Buildings and leasehold improvements Shorter of the lease term or the estimated life of the assets Upon the sale or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gain or loss is reflected in general and administrative expense in the consolidated statements of income. The Company has incurred costs related to the development of the Company’s websites. The Company capitalizes these website development costs, as applicable, in accordance with ASC Subtopic 350-50, Intangibles—Goodwill and Other—Website Development Costs (“ASC 350-50”) . ASC 350-50 requires that costs incurred during the website development stage be capitalized. Capitalized website costs include salary and benefit costs for Company employees and contractors that develop the website. When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are depreciated using the straight-line method over the three-year useful life. Business Combinations The Company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are recorded at their acquisition date fair values. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Identifiable intangible assets with finite lives are amortized over their useful lives. Amortization of intangible assets is recorded in general and administrative expense. While the Company uses its best estimates and assumptions as a part of the determination of fair value to accurately value assets acquired, liabilities assumed and any noncontrolling interest on the business combination date, the Company’s estimates and assumptions are inherently subject to refinement. As a result, during the preliminary determination of fair value, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired or liabilities assumed subsequent to the completion of the determination of fair value in the Company’s operating results in the period in which the adjustments were determined. Noncontrolling interest is part of the aggregate consideration paid for an acquisition. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition by the Company, subject to possible adjustments for up to one year from the business combination date, and the minorities’ share of changes in equity since the date of acquisition. The Company also incurs acquisition-related and other expenses including legal, banking, accounting and other advisory fees of third parties which are recorded as general and administrative expenses as incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. Goodwill, Intangible Assets and Other Long-Lived Assets Assets acquired and liabilities assumed are measured at fair value as of the acquisition date. Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired. As of December 31, 2021 and 2020, the Company had goodwill of $363.3 million and $88.3 million, respectively. Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill is tested for impairment at least annually, in the fourth quarter and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the reporting unit level, which is generally at the level of or one level below an operating segment. Generally, a qualitative assessment is first performed to determine whether a quantitative goodwill impairment test is necessary. If management determines, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in the excess of the carrying amount cannot be assured, then a quantitative goodwill impairment test would be required. The quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches. An impairment charge is recorded equal to any shortfall between the fair value of a reporting unit and its carrying value. No goodwill impairment was recorded for the years ended December 31, 2021, 2020 and 2019. Impairment of Long-Lived Assets The Company reviews long-lived assets for possible impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. This determination includes evaluation of factors such as future asset utilization and future net undiscounted cash flows expected to result from the use of the assets. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. The Company’s identifiable intangible assets are typically comprised of customer relationships, brand names and acquired core website software. The cost of identifiable assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives, which range from three No impairment losses were recognized during the years ended December 31, 2021, 2020 and 2019. Leases The Company generally leases office and warehouse facilities under non-cancellable agreements. Upon each agreement’s commencement date, the Company determines if the agreement is part of an arrangement that is or that contains a lease, determines the lease classification and recognizes right-of-use assets and lease liabilities for all leases with the exception of leases with terms of 12 months or less. The Company accounts for lease and non-lease components as a single lease component. Operating lease right-of-use assets are classified in operating lease right-of-use assets in the consolidated balance sheets. Operating lease liabilities are classified as current liabilities and long-term lease liabilities based on when lease payments are due. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance and administrative services. As of December 31, 2021 and 2020, the Company did not have material finance lease arrangements. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected term of the lease commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. The Company adjusts the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The right-of-use asset also includes any lease payments made prior to the commencement date and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments on operating leases is recognized on a straight-line basis over the lease term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company reviews right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the right-of-use asset may not be recoverable. When such events occur, the Company compares the carrying amount of the right-of-use asset to the undiscounted expected future cash flows related to the right-of-use asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the right-of-use asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the right-of-use asset. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are recorded net on the face of the balance sheet. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent it is believed that these assets are more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the valuation allowance. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. The Company classifies interest and penalties, if applicable, related to income tax liabilities as a component of income tax expense. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2021, there are no known uncertain tax positions. Equity-based Compensation Restricted Stock Units and Stock Options The Company has granted equity-based awards in the form of restricted stock units and stock options to employees. Equity-based compensation expense related to these equity-based awards is recognized based on the fair value of the awards granted. We estimate the fair value of restricted stock unit awards granted based upon the closing price of our common stock on the grant date. We estimate the fair value of stock option awards granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying shares of our common stock, the risk-free interest rate, the expected volatility of the price of our common stock, the expected dividend yield of our common stock and the expected term of the equity award. The assumptions used to determine the fair value of the equity awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The related equity-based compensation expense is recognized on a straight-line basis over the requisite service period of the awards, which is generally four years. We account for forfeitures as they occur. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. These assumptions and estimates are as follows: • Risk-Free Interest Rate . The risk-free interest rate for the expected term of the equity award is based on the U.S. Treasury yield curve in effect at the time of the grant. • Expected Volatility . As we have minimal trading history for our common stock, the expected volatility was estimated by taking the average historic stock price volatility for industry peers, consisting of several public companies in our industry which are either similar in size, stage of life cycle or financial leverage, over a period equivalent to the expected term of the awards. • Expected Dividend Yield . We have never declared or paid any cash dividends and do not currently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used. • Expected Term . For stock options, the expected term represents the period that a stock option award is expected to be outstanding. We have limited historical exercise data from which to derive expected term input assumptions. Consequently, we calculate expected term using the SEC simplified method whereby the expected term of a stock option award is equal to the average of the award's contractual term and vesting term. We will continue to use judgment in evaluating the assumptions related to our equity-based compensation on a prospective basis. Partnership Units Valuations For the partnership units granted prior to IPO, the Company relied on valuations prepared by an independent third-party valuation firm in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation , Such valuations were aligned with the Company’s internal valuation approach. Subsequent to the IPO, it is no longer necessary for the Company to estimate the fair value of its partnership units, as no further incentive partnership unit awards will be granted subsequent to the IPO. See Note 12 for additional information. Employee Benefit Programs The Company has a 401(k) defined contribution plan covering eligible employees. Participants may contribute a percentage of their pre-tax earnings annually, subject to limitations imposed by the Internal Revenue Service. The Company matches contributions, subject to Internal Revenue Service limitations, and contributions vest immediately. The Company’s short-term obligations, which represent wages and salaries for vacation days earned, non-monetary benefits and accumulated sick leaves that are expected to settle wholly within 12 months after the end of the period in which the employees render the related service, are recognized in respect of employee services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are included in accrued liabilities in the consolidated balance sheets. Foreign Currencies The functional currency for the Company and its United States and Cayman subsidiaries is the United States dollar, while the functional currency for the Company’s Australian subsidiaries is the Australian dollar. For those subsidiaries, the assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date for assets and liabilities and an average rate for each period for revenues and expenses. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in the consolidated statement of stockholders’ equity. Transactions denominated in a currency other than the functional currency of the entity involved give rise to foreign currency remeasurement gains and losses, which are included in other expense on the consolidated statements of income. Foreign currency transaction losses were $1.7 million, $0.2 million and $0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Comprehensive Income (Loss) Comprehensive income (loss) is composed of two components: net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. The Company has disclosed other comprehensive income (loss) as a component of stockholders’ equity. Revenue Recognition Revenue is primarily derived from the sale of apparel merchandise through the Company’s online websites and stores and, when applicable, shipping revenue. Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers in accordance with Revenue from Contracts with Customers (Topic 606) , the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies its performance obligation. A contract is created with the customer at the time the order is placed by the customer, which creates a single performance obligation. The Company recognizes revenue for its single performance obligation at the time control of the product passes to the customer, which is when the goods are transferred to a third-party common carrier, for purchases through the Company’s online websites, or at point of sale, for purchases in our stores. In addition, the Company has elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. Net sales from product sales includes shipping charged to the customer and is recorded net of taxes collected from customers, which are recorded in accrued liabilities and are remitted to governmental authorities. Cash discounts earned by the customers at the time of purchase and estimates for sales return allowances are deducted from gross revenue in determining net sales. The Company generally provides refunds for goods returned within 30 to 45 days from the original purchase date. A returns reserve is recorded by the Company based on historical refund experience with a corresponding reduction of sales and cost of sales. The returns reserve was $6.9 million and $3.5 million as of December 31, 2021 and 2020, respectively. The following table presents a summary of the Company’s sales return reserve: December 31, 2021 2020 Beginning balance $ 3,517 $ 2,585 Returns (80,915) (36,796) Allowance 84,285 37,728 Ending balance $ 6,887 $ 3,517 The Company also sells gift cards and issues online credits in lieu of cash refunds or exchanges. Proceeds from the issuance of gift cards and online credits issued are recorded as deferred revenue and recognized as revenue when the gift cards or online credit are redeemed or, upon inclusion in gift card and online credit breakage estimates. Breakage estimates are determined based on prior historical experience. Revenue recognized in net sales on breakage of gift cards and online credit for the years ended December 31, 2021, 2020 and 2019 was $0.5 million, $0.7 million and $0.4 million, respectively. The following table presents the disaggregation of the Company’s net revenues by geography, based on customer address: Year Ended December 31, 2021 2020 2019 United States $ 270,028 $ 125,179 $ 45,280 Australia 218,563 67,850 47,176 Rest of world 73,600 22,887 9,984 Total $ 562,191 $ 215,916 $ 102,440 Cost of Sales Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight-in, defective merchandise returned from customers, inventory write-offs and other miscellaneous shrinkage. Selling Expenses Selling expenses consist of costs incurred in operating and staffing the fulfillment centers and stores, costs attributable to inspecting and warehousing inventory, picking, packaging and preparing customer orders for shipment, customer service, shipping and other transportation costs incurred delivering merchandise to customers and customers returning merchandise, merchant processing fees, and shipping supplies. The amount of shipping and handling costs included in selling expenses was $70.7 million, $34.1 million and $16.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. Marketing Marketing expenses are expensed as incurred and consist primarily of targeted online performance marketing costs, such as display advertising, retargeting, paid search/product listing ads, affiliate marketing, paid social, search engine optimization, personalized email marketing, social media advertising and mobile “push” communications through the Company’s apps. Marketing expenses also include the Company’s spend on brand marketing channels, including cash compensation to influencers, events and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining the customer base. Advertising costs are expensed as incurred. General and Administrative General and administrative expenses consist primarily of payroll and related benefit costs and equity-based compensation expense for employees involved in general corporate functions including merchandising, marketing and technology, as well as costs associated with the use by these functions of facilities and equipment, including depreciation, rent and other occupancy expenses. Other Expense, Net Other expense, net, consists primarily of $10.9 million of loss on extinguishment of debt for the year ended December 31, 2021, interest expense of $9.5 million, $0.3 million and $0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively, and foreign currency losses of $1.7 million, $0.2 million and $0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Net Income (Loss) Per Share Basic net income (loss) per share is calculated using net income attributable to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the dilutive effects of stock options and restricted stock units outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The carrying amounts for the Company’s cash and cash equivalents, accounts receivable, accounts payable, line of credit and accrued liabilities approximate fair value due to their short-term maturities. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full-term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company held cash in operating accounts as of December 31, 2021 and 2020. Certain Risks and Concentrations The Company is subject to certain risks, including dependence on third-party technology providers and hosting services for website servers, exposure to risks associated with online commerce security, credit card fraud, as well as the interpretation of state and local laws and regulations in regard to the collection and remittance of sales and use taxes. The Company does not have significant customer or vendor concentrations. Segment Information Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company has determined that its five brands are each an operating segment. The Company has aggregated its operating segments into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which amended its conceptual framework to improve the effectiveness of disclosures around the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy. This guidance also adds new disclosure requirements for Level 3 measurements. The Company adopted this guidance on Janua |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Petal & Pup On August 9, 2019, the Company acquired 66.7% of the share capital of Petal & Pup Limited (“Petal & Pup”) for an aggregate cash consideration of AUD $29.4 million, net of cash acquired of AUD $3.1 million (US $19.9 million, net of cash acquired of $2.1 million) and consideration payable of AUD $0.9 million ($0.6 million). In connection with the IPO, the Company acquired the remaining 33.3% (refer to Note 1 for additional information). The acquisition expanded the Company’s customer following and products into online apparel for female customers in their twenties or thirties and provides the Company with an Australian brand that can be expanded into the North American market. The fair values of assets acquired, liabilities assumed and noncontrolling interest as of the date of the acquisition, are as follows: Trade receivables $ 6 Inventory 630 Prepaid expenses and other current assets 78 Property and equipment, net 93 Operating lease right-of-use assets 430 Intangible assets 7,695 Trade and other payables (1,218) Deferred tax liability (2,272) Current tax liabilities (407) Operating lease liabilities (430) Total net assets acquired 4,605 Fair value of noncontrolling interest (8,314) Goodwill 24,214 Total purchase price, net of cash acquired of $2,109 $ 20,505 The acquisition was accounted for as a business combination. The following table summarizes the identifiable intangible assets acquired as of the date of the acquisition: Fair Value at Acquisition Date Amortization Period Brand $ 5,112 10 years Customer relationships 2,583 4 years Total intangible assets $ 7,695 The fair value of the noncontrolling interest is determined by measuring the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition, adjusted for a discount to factor the non-marketable, noncontrolling holding. The results of operations of Petal & Pup are included in the Company’s consolidated results beginning August 9, 2019. Total net sales of $9.4 million and net income attributable to the Company of less than $0.1 million of Petal & Pup are included in the accompanying consolidated statement of income for the year ended December 31, 2019. Goodwill of $24.2 million, none of which is deductible for tax purposes, represents the excess purchase price over the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed. The goodwill arising from the acquisition consists largely of anticipated synergies related to combining with the Company’s existing operations. Total acquisition costs incurred by the Company in connection with the purchase primarily related to third-party legal, accounting and tax diligence fees, were $0.7 million. These costs are recorded in general and administrative expenses in the consolidated statement of income during the year ended December 31, 2019. Rebdolls On December 6, 2019, the Company acquired 100% of the share capital of Rebdolls, Inc. (“Rebdolls”), a New Jersey corporation, for $0.6 million, which consisted of upfront cash consideration of $0.5 million and the fair value of contingent consideration of $0.1 million. The conditions were ultimately not met in relation to the contingent consideration. The acquisition provides the Company with a brand that offers apparel with a full range of sizes from 0 to 32 with an emphasis on size inclusivity, focused on female customers age 18 to 34. As part of the purchase price allocation, the Company recorded $0.1 million in inventory, $0.1 million in identifiable intangible assets and $0.5 million in goodwill. The results of operations of Rebdolls, Inc. are included in the Company’s consolidated results beginning December 6, 2019. Total net sales of $0.1 million in 2019 and net loss attributable to the Company of $0.2 million are included in the accompanying consolidated statement of income for the year ended December 31, 2019. The acquisition costs incurred for this purchase agreement were immaterial. Culture Kings On March 31, 2021, pursuant to a share sale agreement, the Company, through its subsidiary CK Holdings, acquired a 55% ownership stake in Culture Kings. The previous shareholders of Culture Kings retained a 45% noncontrolling interest in Culture Kings by receipt of an equity interest in CK Holdings. The Company recognized goodwill as the excess of the fair value of the total purchase consideration and noncontrolling interests over the net fair value of the identifiable assets acquired and the liabilities assumed. The purchase price consisted of AUD $307.4 million ($235.9 million) in cash consideration and noncontrolling interest with a fair value of AUD $186.0 million ($142.7 million). In connection with the IPO, the Company completed a series of transactions in which the minority investors exchanged their interests in CK Holdings for newly issued shares of a.k.a. Brands Holding Corp. common stock (refer to Note 1 for additional information). Culture Kings is focused on street apparel aimed at the young adult age group and has a combination of online sales as well as stores based in Australia and expands the Company’s consumer market to include male consumers and further expansion in the United States. The following table sets forth the allocation of the total consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, as of the date of the acquisition, with the excess recorded to goodwill: Purchase consideration: Total purchase price, net of cash acquired of $8,831 $ 227,053 Fair value of noncontrolling interest 142,717 Total consideration $ 369,770 Identifiable net assets acquired: Account receivable, net $ 625 Inventory (1) 62,937 Prepaid expenses and other current assets 4,800 Property and equipment, net 8,048 Intangible assets, net (2) 73,209 Operating lease right-of-use assets 24,299 Accounts payable (13,449) Deferred revenue (141) Income taxes payable (1,778) Other current liabilities (2,533) Operating lease liabilities (24,299) Deferred income taxes, net (25,439) Accrued liabilities, non-current (1,058) Net assets acquired 105,221 Goodwill $ 264,549 The purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1) Inventory was adjusted by $15.1 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include: Estimated Fair Value Annual Amortization Expense Estimated Useful Life in Years Brand names $ 68,354 $ 6,835 10 years Customer relationships 4,855 1,214 4 years Total $ 73,209 Brand names are valued using a relief from royalty approach, which estimates the license fee that would need to be paid by Culture Kings if it was deprived of the brand names and domain names, and instead had to pay a license fee for their use. The fair value is the present value of the expected future license fee cash flows. Customer relationship intangible assets are valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible asset after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues. Key assumptions included discounted cash flow, estimated life cycle and customer attrition rates. Total acquisition costs incurred by the Company in connection with its purchase of Culture Kings primarily related to third-party legal, accounting and tax diligence fees, were $3.3 million. These costs are recorded in general and administrative expenses in the condensed consolidated statement of income for the year ended December 31, 2021. Goodwill of $264.5 million, none of which is deductible for tax purposes, represents the excess purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed. The goodwill arising from the acquisition consists largely of anticipated synergies related to combining with the Company’s existing operations. The fair value of the noncontrolling interest was determined by measuring the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition, adjusted for a discount to factor the non-marketable, noncontrolling holding. The noncontrolling interest in Culture Kings contained a put right whereby the minority investors could have caused CK Holdings to purchase all of their units at a per unit price equal to six times the EBITDA of CK Holdings, calculated as of the twelve-month period ending on the end of the most recent fiscal quarter. The put right was only exercisable after December 31, 2023. In accordance with ASC 810, Consolidation , as this put right was redeemable outside of the Company’s control, the noncontrolling interest was classified outside the permanent equity section of the Company’s consolidated balance sheets prior to the IPO. In connection with the IPO, the Company completed a series of transactions in which the CK Holdings minority investors exchanged their interests in CK Holdings for newly issued shares of a.k.a. Brands Holding Corp. common stock, thereby eliminating the noncontrolling interest classified outside of permanent equity. Since the date of acquisition, March 31, 2021, the results of Culture Kings have been included in the Company’s consolidated results. The following amounts are included in the accompanying consolidated statement of income for the year ended December 31, 2021: Year Ended December 31, 2021 Net sales $ 196,471 Net loss $ (5,899) The unaudited pro forma financial information below is presented to illustrate the estimated effects of the acquisition of Culture Kings and the associated financing as if they had occurred on January 1, 2020: Year Ended December 31, 2021 2020 Net sales $ 613,390 $ 385,048 Net income attributable to a.k.a. Brands Holding Corp. $ 16,781 $ 9,238 Net income per share, basic and diluted: $ 0.17 $ 0.11 The pro forma information was prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations . Since this pro forma financial information has been prepared based on preliminary estimates of consideration and fair values, including the identifiable intangibles, the actual amounts eventually recorded for the Culture Kings Acquisition may differ materially from the information herein. The unaudited pro forma financial information has been prepared for informational purposes only and is not indicative of what the Company’s results of operations would have been had the transactions occurred on January 1, 2020, nor does it project the results of operations of the combined company following the transaction. mnml On October 14, 2021, the Company acquired all of the equity interests of Third Estate LLC (“mnml”) for total consideration of $46.1 million, including cash consideration of $28.2 million, net of cash acquired of $0.6 million, and subject to working capital adjustments. The remaining consideration of $17.3 million was paid in the form of 2,057,695 shares of a.k.a. common stock. mnml is an LA-based streetwear brand that offers competitively priced on-trend wardrobe staples. This acquisition will help the Company continue its growth into the US market and provide opportunities for customer cross-sell. The estimated fair values of assets acquired and liabilities assumed as of the date of the acquisition, are as follows: Accounts receivable, net $ 68 Inventory (1) 7,321 Prepaid expenses and other current assets 2,178 Other assets 15 Intangible assets (2) 14,300 Accounts payable (504) Deferred income (164) Accrued liabilities (1,794) Assumed loan (1,312) Sales and use tax liability (1,100) Deferred income taxes, net (3,159) Total net assets acquired 15,849 Goodwill 29,650 Total purchase price, net of cash acquired of $605 $ 45,499 The cash purchase consideration is subject to working capital adjustments that will be concluded before the one-year anniversary of the close of the transaction. The preliminary purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1) Inventory was adjusted by $1.9 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include: Fair Value at Acquisition Date Amortization Period Brand $ 11,800 10 years Customer relationships 2,500 3 years Total intangible assets $ 14,300 The results of operations of mnml are included in the Company’s consolidated results beginning October 14, 2021. Total net sales of $11.6 million and net income attributable to the Company of $1.0 million of mnml are included in the accompanying consolidated statement of income for the year ended December 31, 2021. Goodwill of $29.7 million, none of which is deductible for tax purposes, represents the excess purchase price over the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed. The goodwill arising from the acquisition consists largely of anticipated synergies related to combining with the Company’s existing operations. Total acquisition costs incurred by the Company in connection with the purchase primarily related to third-party legal, accounting and tax diligence fees, were $1.3 million. These costs are recorded in general and administrative expenses in the consolidated statement of income during the year ended December 31, 2021. Purchase of Noncontrolling Interests Immediately following the New Excelerate Reorganization (as described in Note 1), the Company completed a series of transactions in which the minority investors exchanged their interests in CK Holdings for 21,809,804 newly issued shares of a.k.a. Brands Holding Corp. common stock. The number of shares issued in exchange for the minority interests was determined based on the relative valuations of CK Holdings and the consolidated a.k.a. group at the time of the IPO. This exchange resulted in the elimination of the noncontrolling interest in Culture Kings, with a value of $132.3 million , and an increase in additional paid-in capital with a nominal amount recorded as common stock at a value of $0.001 per issued share in the exchange. Following the completion of this transaction, CK Holdings became a wholly-owned subsidiary of a.k.a. Brands Holding Corp. The Company had historically owned 66.7% of the equity interests in P&P Holdings, which operated the Company’s Petal & Pup business prior to the IPO. The remaining 33.3% of the equity interests in P&P Holdings were held by certain minority investors. On August 19, 2021, the Company repurchased approximately 6.0% of the equity held by the P&P minority investors for AUD $5.0 million . In connection with the completion of the IPO, the Company used a portion of the net proceeds from the IPO to fund the acquisition of the remaining 27.3% of the equity interests in P&P Holdings then owned by the P&P minority investors for cash of approximately AUD $22.8 million . As a result of the transaction, noncontrolling interest of $9.6 million was eliminated and the $10.6 million paid in excess of the noncontrolling interest was recorded as a reduction to additional paid-in capital. Following the completion of this purchase, P&P Holdings became a wholly-owned subsidiary of a.k.a. Brands Holding Corp. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are comprised of the following: December 31, 2021 2020 Inventory prepayments 14,251 3,722 Other 6,558 358 Total prepaid expenses and other current assets $ 20,809 $ 4,080 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is comprised of the following: December 31, 2021 2020 Furniture and fixtures $ 1,305 $ 411 Machinery and equipment 1,595 185 Computer equipment and capitalized software 2,638 753 Leasehold improvements 12,457 2,020 Total property and equipment 17,995 3,369 Less accumulated depreciation (3,338) (1,248) Total property and equipment, net $ 14,657 $ 2,121 Total depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $2.7 million, $0.4 million and $0.5 million, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GoodwillThe carrying value of goodwill as of December 31, 2021 and 2020, was $363.3 million and $88.3 million, respectively. No goodwill impairment was recorded for the years ended December 31, 2021 and 2020. The goodwill of the acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill of acquired companies is generally not deductible for tax purposes. The following table summarizes goodwill activity: Balance as of December 31, 2019 $ 80,221 Changes in foreign currency translation 8,032 Balance as of December 31, 2020 88,253 Acquisitions (Note 3) 294,200 Changes in foreign currency translation (19,148) Balance as of December 31, 2021 $ 363,305 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of December 31, 2021 and 2020, included in intangible assets, net in the accompanying consolidated balance sheets, are as follows: December 31, Useful life Weighted Average Amortization Period 2021 2021 Weighted Average Amortization Period 2020 2020 Customer relationships 4 years 2.5 years $ 24,516 1.8 years $ 17,100 Brands 10 years 8.9 years 100,315 7.8 years 26,680 Website design and software system 3 years 2.2 years 1,883 2.4 years 903 Trademarks 5 years 3.3 years 114 4.5 years 103 Total intangible assets 126,828 44,786 Less accumulated amortization (28,541) (15,684) Total intangible assets, net $ 98,287 $ 29,102 Amortization of acquired intangible assets with finite useful lives is included in general and administrative expenses and was $13.9 million, $6.4 million and $5.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Future estimated amortization expense for acquired identifiable intangible assets is as follows: Year ending December 31: 2022 $ 15,349 2023 13,028 2024 12,327 2025 11,022 2026 10,027 Thereafter 36,534 Total amortization expense $ 98,287 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Princess Polly Operating Line of Credit The Company’s subsidiary Princess Polly had an operating line of credit (the “Polly Facility”) up to a maximum of $15.4 million, which was guaranteed by Polly Bidco Pty Ltd. and Polly Holdco Pty Ltd, each subsidiaries of the Company. (“Princess Polly Group”). The assets of the Princess Polly Group were pledged as security under the Polly Facility. The Polly Facility was available to make cash draws, procure letters of credit instruments and for the provision of ancillary facilities. The Polly Facility matured in November 2021, and was therefore classified as a current liability as of December 31, 2020. As of December 31, 2020, the Company had drawn $6.2 million on the Polly Facility and had $0.8 million drawn in letters of credit which were held as collateral under various custom bonds agreements. The Company repaid the outstanding balances under the Polly Facility in full and terminated it in February 2021. Rebdolls Revolving Line of Credit Rebdolls had a revolving line of credit for a maximum of $0.5 million with Bank of America, N.A. The assets of Rebdolls were pledged as security under this line of credit. As of December 31, 2020, Rebdolls had an outstanding balance of $0.2 million on the revolving line of credit. The Company repaid the outstanding balances under the revolving line of credit in full on February 28, 2021, the date of its maturity, and terminated it. Debt Financing for the Culture Kings Acquisition To fund the acquisition of Culture Kings (refer to Note 3 for additional information), on March 31, 2021, Polly Holdco Pty Ltd. (“Polly”), a wholly owned subsidiary of the Company, entered into a debt agreement with a syndicated group, with an affiliate of Fortress Credit Corp as administrative agent, consisting of a $125.0 million term-loan facility and $25.0 million revolving credit facility. Polly also issued $25.0 million in senior subordinated notes to certain debt funds of Summit Partners, a related party of the Company (refer to Note 16 for additional information). The combined term loan and senior subordinated notes provided the Company with $144.1 million, net of loan fees of approximately $5.9 million. Key terms and conditions of each facility were as follows: • The $125.0 million term loan matured on March 31, 2027 and required the Company to make amortized quarterly payments in aggregate annual amounts equal to 0.8% of the original principal amount. Borrowings under the credit agreement accrued interest, at the option of the borrower, at an adjusted LIBOR plus 7.5% or Alternative Base Rate (“ABR”) plus 6.5%, subject to adjustment based on achieving certain total net secured leverage ratios and subject to a minimum LIBOR threshold of 1.0% per annum. • The $25.0 million revolving credit facility, which matured on March 31, 2027, accrued interest, at the option of the borrower, at an adjusted LIBOR plus 7.5% or ABR plus 6.5%, subject to adjustment based on achieving certain total net secured leverage ratios. Total loan debt issuance costs of $1.0 million related to the revolving credit facility were incurred. These costs were included in prepaid and other assets and were being amortized over the term of the facility. $13.0 million had been drawn on the revolving credit facility, as a result of the Culture Kings acquisition transaction. • The senior subordinated notes accrued interest at an annual interest rate of 16.0% and were repayable at the Company’s discretion until maturity on September 30, 2027. The Company incurred debt issuance costs of $6.9 million, of which $1.0 million related to the revolving credit facility, which were capitalized and included in prepaid and other current assets as deferred financing costs and were being amortized over the life of the facility, or 6 years. The remaining $5.9 million of debt issuance costs relating to the term loan and senior subordinated notes were presented net of the outstanding debt and were being amortized over the life of the outstanding debt, using the effective interest rate method. The Company repaid the term loan, revolving credit facility and senior subordinated notes in full and terminated them in September 2021 in connection with the IPO, as described further below. New Senior Secured Credit Facility On September 24, 2021, at the close of the Company’s IPO, certain subsidiaries of the Company entered into a new senior secured credit facility inclusive of a $100.0 million term loan and a $50.0 million revolving line of credit, as well as an option for additional term loan of up to $50.0 million through an accordion feature. Key terms and conditions of each facility were as follows: • The $100.0 million term loan matures five years after closing and requires the Company to make amortized annual payments of 5.0% during the first and second years, 7.5% during the third and fourth years and 10.0% during the fifth year with the balance of the loan due at maturity. Borrowings under the term loan accrue interest at LIBOR plus an applicable margin dependent upon our net leverage ratio. The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of LIBOR plus 3.25%. • The $50.0 million revolving line of credit, which matures five years after closing, accrues interest at LIBOR plus an applicable margin dependent upon our net leverage ratio. The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of LIBOR plus 3.25%. Additionally, a margin fee of 25-35 basis points is assessed on unused amounts under the revolving line of credit, subject to adjustment based on our net leverage ratio. • The $50.0 million accordion feature allows the Company to enter into additional term loan borrowings at terms to be agreed upon at the time of issuance, but on substantially the same basis as the original term loan, which includes the requirement to make amortized annual payments at the same cadence as that of the original term loan. The new senior secured credit facility requires that the Company maintain a maximum total net leverage ratio of 3.50 to 1.00 as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2021 through maturity. The new senior secured credit facility also requires that the Company maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2021 through maturity. In the event that the Company fails to comply with the financial covenant, the Company will have the option to make certain equity contributions, directly or indirectly, to cure any non-compliance with such covenant, subject to certain other conditions and limitations. Beginning with the fiscal year ended December 31, 2022, and continuing annually thereafter, the Company is required to make a mandatory prepayment as a percentage of excess cash flows, as defined by the credit agreement, in the period based on the Company triggering certain net debt leverage ratios. Specifically, a mandatory prepayment of 50% of excess cash flows is required if the Company’s net leverage ratio exceeds 2.75x, and a mandatory prepayment of 25% of excess cash flows is required if the Company’s net leverage ratio is greater than or equal to 2.25x. As of December 31, 2021 , the Company is in compliance with all debt covenants. The Company incurred $2.7 million of debt issuance costs in relation to the new senior secured credit facility. Of this, $0.9 million relates to the revolver and is capitalized and included in prepaid and other current assets as deferred financing costs to be amortized over the life of the facility, or five years. The remaining $1.8 million of debt issuance costs relates to the term loan and is presented net of our outstanding debt in long term debt on our balance sheet. Debt issuance costs are amortized over the life of the outstanding debt, using the effective interest rate method. In September 2021, the Company used borrowings from the term loan under this new senior secured credit facility, together with a portion of the proceeds from the IPO, to repay in full and terminate the previous term loan, revolving credit facility and senior subordinated notes entered into in March 2021 in relation to the Culture Kings acquisition. As part of the repayment, the Company also paid $4.5 million in prepayment penalties and wrote-off $6.4 million of unamortized debt issuance costs, all of which is included in the loss on extinguishment of debt in the condensed consolidated statements of income. In October 2021, the Company borrowed $15.0 million under the revolving line of credit at an applicable interest rate of 3.37% and final payoff due on September 24, 2026. The borrowings on the revolving line of credit were used in the acquisition of mnml. See Note 3 for additional details. In November 2021, subsequent to the draw on the revolver, the Company borrowed $12.0 million of additional term loan under the accordion feature at substantially the same terms as the original term loan. In December 2021, the borrowings from the accordion feature, along with cash on hand, were used to completely repay the borrowings from the revolving line of credit. In connection with the borrowings under the accordion feature, additional debt issuance costs of $0.3 million were incurred and presented net of our outstanding debt in long term debt on our balance sheet, to be amortized over the life of the accordion, using the effective interest rate method. Total Debt and Interest Outstanding debt consisted of the following: December 31, 2021 2020 Bank loans - flexible rate loan $ — $ 6,385 Term loan 110,750 — Revolving credit facility — — Capitalized debt issuance costs (1,968) (32) Total debt 108,782 6,353 Less current portion (5,600) (6,353) Total long-term debt $ 103,182 $ — Interest expense, which included the amortization of debt issuance costs, totaled $9.5 million, $0.3 million and $0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company leases office and warehouse facilities under various non-cancellable operating lease agreements (real estate leases). Real estate leases have remaining lease terms of approximately 1 to 10 years, which represent the non-cancellable periods of the leases and include extension options that the Company determined are reasonably certain to be exercised. The Company excludes extension options that are not reasonably certain to be exercised from the lease terms, ranging from approximately 6 months to 3 years. Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance and administrative services. The Company often receives customary incentives from landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Leases are classified as operating or financing at commencement. The Company does not have any material financing leases. Operating lease right-of-use assets and liabilities on the consolidated balance sheets represent the present value of the remaining lease payments over the remaining lease terms. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rates in the leases are not readily determinable. Operating lease costs consist primarily of the fixed lease payments included in the operating lease liabilities and are recorded on a straight-line basis over the lease terms. The Company’s operating lease costs were as follows: Year Ended December 31, 2021 2020 2019 Operating lease costs $ 5,823 $ 1,192 $ 479 Variable lease costs 155 130 118 Total lease costs $ 5,978 $ 1,322 $ 597 The Company does not have any material short-term leases. The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. Supplemental cash flow information relating to the Company’s operating leases was as follows: Year Ended December 31, 2021 2020 2019 Cash paid for operating lease liabilities $ 5,490 $ 1,193 $ 479 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 4,073 — 2,340 Other information relating to the Company’s operating leases was as follows: As of December 31, 2021 2020 Weighted-average remaining lease term 6.1 years 3.9 years Weighted-average discount rate 3.9% 3.6% As of December 31, 2021, the maturities of operating lease liabilities were as follows: 2022 $ 6,689 2023 6,724 2024 4,094 2025 3,340 2026 2,480 Thereafter 7,380 Total remaining lease payments 30,707 Less: imputed interest 3,616 Total operating lease liabilities 27,091 Less: current portion (5,721) Long-term operating lease liabilities $ 21,370 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) from continuing operations before income taxes consisted of the following: Year Ended December 31, 2021 2020 2019 United States $ (245) $ 8,360 $ 589 Foreign (4,994) 13,295 1,865 Income (loss) from continuing operations before income taxes $ (5,239) $ 21,655 $ 2,454 The components of the provision for income taxes consisted of the following: Year Ended December 31, 2021 2020 2019 Current: Federal $ 2,631 $ 2,108 $ 257 State 733 310 47 Foreign 7,828 7,099 2,642 Total 11,192 9,517 2,946 Deferred: Federal (579) 117 105 State (42) (17) (1) Foreign (9,719) (2,767) (2,038) Total (10,340) (2,667) (1,934) Income tax expense $ 852 $ 6,850 $ 1,012 The provision for income taxes differs from the tax computed using the statutory U.S. federal income tax rate of 21% as a result of the following items: Year Ended December 31, 2021 2020 2019 Tax expense (benefit) at U.S. statutory rate $ (1,100) $ 4,548 $ 515 State income taxes, net of federal income tax benefit 546 246 36 Permanent differences 1,121 467 2,802 Foreign tax rate differential (886) 1,536 210 Transaction costs (477) — — Equity-based compensation 1,689 — — Other (41) 53 (2,551) Income tax expense $ 852 $ 6,850 $ 1,012 The foreign tax rate differential relates to differences between the income tax rates in effect in the foreign countries in which the Company operates, in particular Australia where the corporate tax rate is 30%. The components of net deferred tax assets (liabilities) were as follows: Year Ended December 31, 2021 2020 Deferred tax assets: Transaction costs $ 2,129 $ 466 Property and equipment 439 — Accruals and reserves 4,397 1,962 Lease liabilities 7,005 894 State taxes — 64 Inventory 1,653 — Foreign exchange gains / losses 92 373 Net operating loss carryforwards — 135 Subtotal 15,715 3,894 Less: Valuation allowance — (144) Total deferred tax assets 15,715 3,750 Deferred tax liabilities: Property and equipment — (439) Intangible assets (11,557) (8,378) Right-of-use assets (7,041) (745) Inventory — (70) Other (37) (22) Total deferred tax liabilities (18,635) (9,654) Net deferred liabilities $ (2,920) $ (5,904) As of December 31, 2021, the Company did not have any federal or state net operating loss carryforwards. The Company has recorded no valuation allowance as of December 31, 2021 but had recorded a valuation allowance of $0.1 million as of December 31, 2020, primarily related to U.S. net operating loss carryforwards. The Company had gross deferred tax assets of $15.7 million and $3.9 million and gross deferred tax liabilities of $18.6 million and $9.7 million at December 31, 2021 and 2020, respectively. Management has determined the gross deferred tax assets are more likely than not realizable. The Company has not provided deferred taxes on unremitted earnings attributable to foreign subsidiaries that have been considered permanently reinvested. As of December 31, 2021, the unremitted earnings from these operations were approximately $11.4 million. As of December 31, 2021 and 2020, the Company had no uncertain tax positions. The Company is subject to taxation in the United States, Cayman Islands and Australia. For U.S. federal income tax purposes, 2018 and later tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. For major U.S. states, 2017 and later tax years remain open for examination by the tax authorities under a four-year statute of limitations. For Australia, 2017 and subsequent tax years remain subject to examination. Tax Contingencies The Company is subject to income taxes in the United States and Australia. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, the Company considers tax positions for which the ultimate tax determination is uncertain for the purpose of determining whether a reserve is required, despite the Company’s belief that the tax positions are fully supportable. To date the Company has not established a reserve provision because the Company believes that all tax positions are highly certain. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: December 31, 2021 2020 Accrued salaries and other benefits $ 11,746 $ 3,295 Accrued freight costs 9,199 5,012 Sales tax payable 20,008 5,718 Accrued marketing costs 2,543 959 Accrued professional services 1,698 281 Other accrued liabilities 8,181 2,904 Total accrued liabilities $ 53,375 $ 18,169 |
Equity-based Compensation
Equity-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-based Compensation | Equity-based Compensation Incentive Plans 2021 Omnibus Incentive Plan In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Omnibus Incentive Plan (the “2021 Plan”) which became effective in connection with the IPO. The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other forms of equity and cash compensation. A total of 4,900,269 shares of the Company’s common stock were initially reserved for issuance under the 2021 Plan. The number of shares of common stock reserved and available for issuance under the 2021 Plan will automatically increase each January 1, beginning on January 1, 2022, by 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors. 2021 Employee Stock Purchase Plan In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”) which became effective in connection with the IPO. The ESPP authorizes the issuance of shares of the Company’s common stock pursuant to purchase rights granted to employees. The ESPP includes two components: a “Section 423 Component” and a “Non-Section 423 Component.” The Section 423 Component is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (the “Code”) and will be administered, interpreted and construed in a manner consistent with the requirements of Section 423 of the Code and is limited to employees of the Company located in the United States. The Non-Section 423 Component will be granted pursuant to separate offerings designed to achieve tax, securities laws or other objectives for eligible employees of the Company located outside of the United States. A total of 1,225,067 shares of the Company’s common stock were initially reserved for issuance under the ESPP. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2023, by the lesser of 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors. The offering periods of the ESPP will be six months long and are anticipated to be offered twice per year. The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of a share of the Company’s common stock on the first or last day of the offering period, whichever is lower. 2018 Stock and Incentive Compensation Plan Prior to the IPO, the 2018 Stock and Incentive Compensation Plan, as amended, (the “2018 Plan”) provided for the issuance of time-based incentive units and performance-based incentive units issued by Excelerate, L.P. (the predecessor entity of a.k.a. Brands Holding Corp.). In connection with the reorganization transactions and the IPO, all of the equity interests in Excelerate, L.P., including outstanding incentive units issued as equity-based compensation under the 2018 Plan, were transferred to New Excelerate, L.P. (refer to Note 1 for additional information). The incentive units issued under the 2018 Plan participate in distributions from New Excelerate, L.P., but only after investors receive their return of capital plus a specified threshold amount per unit. The total incentive pool size under the plan was 16,475,735 units. The 2018 Plan was terminated in September 2021 in connection with the IPO, but continues to govern the terms of outstanding incentive units that were granted prior to the IPO. No further incentive units will be granted under the 2018 Plan. Upon the expiration, forfeiture, cancellation or withholding of units for employee taxes of any incentive units underlying outstanding incentive unit awards granted under the 2018 Plan, an equal number of shares of a.k.a. Brands Holding Corp. common stock will become available for grant under the 2021 Plan that was established in connection with the IPO. Grant Activity Stock Options The 2021 Plan provides for the issuance of incentive and nonqualified stock options. Under the 2021 Plan, the exercise price of an incentive stock option shall not be less than the fair market value of one share of the Company’s common stock on the date of grant. Stock options are exercisable over periods not to exceed ten years from the date of grant, and generally vest over time or based on performance. As of December 31, 2021, all stock option grants have been time-based. A summary of the Company's time-based stock option activity under the 2021 Plan was as follows: Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Balance as of December 31, 2020 — $ 0.00 — Granted 273,026 9.50 Vested — 0.00 Forfeited/Repurchased — 0.00 Balance as of December 31, 2021 273,026 $ 9.50 $ — Vested as of December 31, 2021 — $ 0.00 $ — As of December 31, 2021, there was $1.3 million of total unrecognized compensation cost related to unvested stock options issued under the 2021 Plan, which is expected to be recognized over a weighted average period of 3.7 years. The assumptions that the Company used to determine the grant date fair value of stock options granted under the 2021 Plan during the year ended December 31, 2021 were as follows, presented on a weighted-average basis: Risk free interest rate 1.00 % Expected volatility 51.32 % Expected dividend yield 0 % Expected term 6.08 years Restricted Stock Units The 2021 Plan provides for the issuance of restricted stock units (“RSUs”). RSUs generally vest over four years. A summary of the Company's RSU activity under the 2021 Plan was as follows: Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2020 — $ 0.00 Granted 942,371 9.99 Vested — 0.00 Forfeited/Repurchased — 0.00 Balance as of December 31, 2021 942,371 $ 9.99 As of December 31, 2021, there was $8.8 million of total unrecognized compensation cost related to unvested RSUs issued under the 2021 Plan, which is expected to be recognized over a weighted average period of 3.9 years. Incentive Units The 2018 Plan provided for the issuance of time-based incentive units and performance-based incentive units. Time-based incentive units generally vest over four years. Performance-based incentive units vest upon the satisfaction of both a performance condition and market condition as described further below. Time-Based Incentive Partnership Units The following table summarizes time-based incentive unit activity under the 2018 Plan: Number of Units Weighted Average Grant Date Fair value Weighted Average Participation Threshold Aggregate Intrinsic Value Balance as of December 31, 2019 3,403,967 $ 0.48 $ 1.02 $ 2,218 Granted 5,507,644 $ 1.37 $ 1.27 Vested (1,200,934) $ 0.47 $ 1.02 Forfeited/Repurchased (1,463,051) $ 0.45 $ 1.02 Balance as of December 31, 2020 6,247,626 $ 1.27 $ 1.24 $ 23,688 Granted 2,079,417 0.90 6.36 Vested (2,351,230) 1.21 1.22 Forfeited/Repurchased — — — Balance as of December 31, 2021 5,975,813 $ 1.16 $ 3.04 $ 23,286 Vested as of December 31, 2021 3,357,449 As of December 31, 2021, there was $6.4 million of total unrecognized compensation cost related to unvested time-based incentive units issued under the 2018 Plan, which is expected to be recognized over a weighted average period of 2.7 years. The assumptions that the Company used to determine the grant date fair value of time-based incentive units granted under the 2018 Plan were as follows, presented on a weighted-average basis: Year Ended December 31, 2021 2020 2019 Risk free interest rate 0.16 % 0.24 % 2.08 % Expected volatility 50 % 50 % 50 % Expected dividend yield 0 % 0 % 0 % Expected term 2.87 years 3.14 years 4.21 years Performance-Based Incentive Units Performance-based incentive units vest upon the satisfaction of both a performance condition and market condition. The performance condition is satisfied upon the occurrence of a liquidity event, defined as a change of control transaction or an initial public offering and is not deemed probable until it occurs. The market condition is satisfied upon the initial investor in Excelerate, L.P. receiving an aggregate return equal to three times its aggregate investment. In connection with the IPO, both the performance condition and the market condition were satisfied. As of December 31, 2021, all outstanding performance-based incentive units have been fully expensed. The following table summarizes performance-based incentive unit activity under the 2018 Plan: Number of Units Weighted Average Grant Date Fair value Weighted Average Participation Threshold Aggregate Intrinsic Value Balance as of December 31, 2019 2,322,372 $ 0.33 $ 1.02 $ 1,534 Granted 3,394,379 $ 1.09 $ 1.24 Forfeited (1,254,987) $ 0.30 $ 1.01 Balance as of December 31, 2020 4,461,764 $ 0.91 $ 1.19 $ 17,137 Granted 932,124 $ 1.01 $ 6.09 Vested (5,393,888) 0.93 2.04 Forfeited — — — Balance as of December 31, 2021 — $ — $ 0.00 Vested as of December 31, 2021 5,393,888 The grant date fair value of the performance-based incentive units was determined the using the Black-Scholes option pricing model, modified to allow for vesting only if the value at the distribution date is at or above the performance threshold. Transition Agreement During the year ended December 31, 2020, the Company entered into a transition agreement with a former executive whereby all unvested incentive units were forfeited upon her termination. Pursuant to the terms of this transition agreement, the former executive retained 261,287 vested incentive units following her termination. As permitted by the original terms of the incentive units, the Company exercised its right to repurchase the former executive’s remaining 802,634 vested incentive units for total cash consideration of $1.1 million payable within a certain period following her termination. The consideration payable was deducted from additional paid-in capital as it did not exceed the fair value of the repurchased incentive units as of the date of repurchase, and was outstanding as of December 31, 2021. Equity-Based Compensation Expense The Company recognizes compensation expense in general and administrative expenses within operating expenses for stock options, RSUs and time-based incentive units granted prior to the IPO by amortizing the grant date fair value on a straight-line basis over the expected vesting period to the extent the vesting of the grant is considered probable. The Company recognized compensation expense for performance-based incentive units granted prior to the IPO at the date of IPO. The Company recognizes equity-based award forfeitures in the period such forfeitures occur. The following table summarizes the Company’s equity-based compensation expense by award type for all Plans: Year Ended December 31, 2021 2020 2019 Stock options $ 95 $ — $ — RSUs 655 — — Time-based incentive units 2,390 1,380 353 Performance-based incentive units 4,903 — — Total $ 8,043 $ 1,380 $ 353 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Preferred Stock In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the Company’s board of directors. Common Stock The Company has one class of common stock. In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 500,000,000 shares of common stock with a par value of $0.001 per share, with one vote per share. Holders of common stock are entitled to receive any dividends as may be declared from time to time by the Company’s board of directors. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share and a reconciliation of the weighted average number of shares outstanding: Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) attributable to a.k.a. Brands Holding Corp. $ (5,968) $ 14,334 $ 1,394 Denominator: Weighted-average common shares outstanding, basic 93,231,377 69,846,362 61,988,641 Dilutive securities: Stock options — — — RSUs — — — Weighted-average common shares outstanding, diluted 93,231,377 69,846,362 61,988,641 Net income (loss) per share: Net income (loss) per share, basic $ (0.06) $ 0.21 $ 0.02 Net income (loss) per share, diluted $ (0.06) $ 0.21 $ 0.02 Due to the reorganization transactions as described in Note 1, for periods prior to our IPO in September 2021, a split of units held by New Excelerate investors into a proportionate amount of shares of the Company’s common stock is reflected in the weighted-average common shares outstanding. The Company used the two-class method in calculating net income per share historically, as it related to the outstanding incentive units. However, for all periods prior to the IPO, there were no potentially dilutive securities. Accordingly, basic and diluted net income per share presented herein and on the condensed consolidated statements of income for all periods prior to the IPO are the same. Basic net income (loss) per share is calculated by dividing net income (loss) attributable to a.k.a. Brands Holding Corp. for the period by the weighted-average number of shares of common stock for the period. Diluted net income (loss) per share has been calculated in a manner consistent with that of basic net income (loss) per share while giving effect to shares of potentially dilutive stock option and RSU grants outstanding during the period, if applicable. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible. Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although the Company cannot predict with assurance the outcome of any litigation or tax matters, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s operating results, financial position or cash flows. Indemnifications In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company may enter into transactions with related parties from time to time. Related Party Debt Financing In connection with the acquisition of Culture Kings (refer to Note 3 for additional information), on March 31, 2021, Polly Holdco Pty Ltd., a wholly owned subsidiary of the Company, issued $25.0 million in senior subordinated notes to an affiliate of Summit, a global investment firm who has a majority ownership interest in the Company. The senior subordinated notes were subsequently paid in full and terminated in connection with the IPO (refer to Note 8 for additional information). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events occurring through March 1, 2022, the date that these financial statements were originally available to be issued, and determined the following subsequent events occurred that would require disclosure in these financial statements. Draw on Revolving Line of Credit On January 26, 2022, the Company borrowed $15.0 million under the revolving line of credit established as part of its senior secured credit facility effective September 24, 2021. The applicable interest rate for the borrowings is 3.52% and final payoff is due on September 24, 2026. Culture Kings Las Vegas Flagship Store Lease On January 31, 2022, the Company entered into a lease agreement with Forum Shops, LLC to lease approximately 13,425 square feet of selling space located in the Forum Shops at Caesars Palace. The lease will have a commencement date in the first quarter of 2022 and will be material to the Company’s operations with a first year annual cash payment of approximately $1.7 million and subsequent annual cash payments that increase by 3.0% each year through the tenth anniversary of the lease commencement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of ConsolidationAll intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of a.k.a. Brands Holding Corp. and its wholly-owned subsidiaries. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. On an ongoing basis, the Company evaluates items subject to significant estimates and assumptions. As of December 31, 2021, the effects of the ongoing COVID-19 pandemic on our business, results of operations and financial condition continue to evolve. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, restricted cash, and accounts receivable. Although the Company’s deposits held with banks may exceed the amount of federal insurance provided on such deposits, the Company has not experienced any losses in such accounts. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents for the amounts reflected on the consolidated balance sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity (at date of purchase) of three months or less to be cash equivalents. Cash equivalents, which consist primarily of money market accounts and restricted cash are carried at cost, which approximates fair value. |
Restricted Cash | Restricted Cash Restricted cash primarily relates to letters of credit which are held as collateral under various lease agreements. Restricted cash is presented separately from cash and cash equivalents on the accompanying consolidated balance sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable consists of trade accounts receivable relating to the credit card receivables arising from the sale of products to customers through the Company’s digital platforms. Trade accounts receivable is reported net of an allowance for doubtful accounts. The Company had no allowance for doubtful accounts as of December 31, 2021 and 2020. |
Inventory, Net | Inventory, Net Inventories consist of finished goods and are accounted for using an average cost method. Inventory is valued at the lower of cost or net realizable value. Cost of inventory includes import duties and other taxes and transport and handling costs. The Company records a provision for excess and obsolete inventory to adjust the carrying value of inventory based on assumptions regarding future demand for the Company’s products. Lower of cost or net realizable value is evaluated by considering obsolescence, excess levels of inventory, deterioration and other factors. The Company analyzes the quantity of inventory on hand, the quantity sold in the past year, the anticipated sales volume, the expected sales price and the cost of making the sale when evaluating the net realizable value of its inventory. If the sales volume or sales price of specific products declines, additional write-downs may be required. Excess and obsolete inventory is charged to cost of goods sold in the period the write-down is estimated. |
Prepaid Expenses And Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of advance payments on inventory to be delivered from vendors, prepaid packaging and insurance. |
Deferred Offering Costs | Deferred Offering CostsDeferred offering costs consist primarily of legal, accounting and other fees related to the IPO which were recorded in prepaid expenses and other current assets on the consolidated balance sheets prior to the IPO. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation. Repair and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three Estimated useful life (years) Furniture and fixtures 5 Machinery and equipment 5 Computer equipment and capitalized software 3 Buildings and leasehold improvements Shorter of the lease term or the estimated life of the assets Upon the sale or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gain or loss is reflected in general and administrative expense in the consolidated statements of income. The Company has incurred costs related to the development of the Company’s websites. The Company capitalizes these website development costs, as applicable, in accordance with ASC Subtopic 350-50, Intangibles—Goodwill and Other—Website Development Costs (“ASC 350-50”) . ASC 350-50 requires that costs incurred during the website development stage be capitalized. Capitalized website costs include salary and benefit costs for Company employees and contractors that develop the website. When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are depreciated using the straight-line method over the three-year useful life. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are recorded at their acquisition date fair values. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Identifiable intangible assets with finite lives are amortized over their useful lives. Amortization of intangible assets is recorded in general and administrative expense. While the Company uses its best estimates and assumptions as a part of the determination of fair value to accurately value assets acquired, liabilities assumed and any noncontrolling interest on the business combination date, the Company’s estimates and assumptions are inherently subject to refinement. As a result, during the preliminary determination of fair value, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired or liabilities assumed subsequent to the completion of the determination of fair value in the Company’s operating results in the period in which the adjustments were determined. Noncontrolling interest is part of the aggregate consideration paid for an acquisition. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition by the Company, subject to possible adjustments for up to one year from the business combination date, and the minorities’ share of changes in equity since the date of acquisition. The Company also incurs acquisition-related and other expenses including legal, banking, accounting and other advisory fees of third parties which are recorded as general and administrative expenses as incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. |
Goodwill | Goodwill, Intangible Assets and Other Long-Lived AssetsAssets acquired and liabilities assumed are measured at fair value as of the acquisition date. Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired. Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill is tested for impairment at least annually, in the fourth quarter and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the reporting unit level, which is generally at the level of or one level below an operating segment. Generally, a qualitative assessment is first performed to determine whether a quantitative goodwill impairment test is necessary. If management determines, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in the excess of the carrying amount cannot be assured, then a quantitative goodwill impairment test would be required. The quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches. An impairment charge is recorded equal to any shortfall between the fair value of a reporting unit and its carrying value. No goodwill impairment was recorded for the years ended December 31, 2021, 2020 and 2019. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for possible impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. This determination includes evaluation of factors such as future asset utilization and future net undiscounted cash flows expected to result from the use of the assets. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. |
Intangible Assets | The Company’s identifiable intangible assets are typically comprised of customer relationships, brand names and acquired core website software. The cost of identifiable assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives, which range from three |
Leases | Leases The Company generally leases office and warehouse facilities under non-cancellable agreements. Upon each agreement’s commencement date, the Company determines if the agreement is part of an arrangement that is or that contains a lease, determines the lease classification and recognizes right-of-use assets and lease liabilities for all leases with the exception of leases with terms of 12 months or less. The Company accounts for lease and non-lease components as a single lease component. Operating lease right-of-use assets are classified in operating lease right-of-use assets in the consolidated balance sheets. Operating lease liabilities are classified as current liabilities and long-term lease liabilities based on when lease payments are due. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance and administrative services. As of December 31, 2021 and 2020, the Company did not have material finance lease arrangements. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected term of the lease commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. The Company adjusts the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The right-of-use asset also includes any lease payments made prior to the commencement date and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments on operating leases is recognized on a straight-line basis over the lease term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company reviews right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the right-of-use asset may not be recoverable. When such events occur, the Company compares the carrying amount of the right-of-use asset to the undiscounted expected future cash flows related to the right-of-use asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the right-of-use asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the right-of-use asset. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are recorded net on the face of the balance sheet. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent it is believed that these assets are more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the valuation allowance. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. The Company classifies interest and penalties, if applicable, related to income tax liabilities as a component of income tax expense. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2021, there are no known uncertain tax positions. |
Equity-based Compensation | Equity-based Compensation Restricted Stock Units and Stock Options The Company has granted equity-based awards in the form of restricted stock units and stock options to employees. Equity-based compensation expense related to these equity-based awards is recognized based on the fair value of the awards granted. We estimate the fair value of restricted stock unit awards granted based upon the closing price of our common stock on the grant date. We estimate the fair value of stock option awards granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying shares of our common stock, the risk-free interest rate, the expected volatility of the price of our common stock, the expected dividend yield of our common stock and the expected term of the equity award. The assumptions used to determine the fair value of the equity awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The related equity-based compensation expense is recognized on a straight-line basis over the requisite service period of the awards, which is generally four years. We account for forfeitures as they occur. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. These assumptions and estimates are as follows: • Risk-Free Interest Rate . The risk-free interest rate for the expected term of the equity award is based on the U.S. Treasury yield curve in effect at the time of the grant. • Expected Volatility . As we have minimal trading history for our common stock, the expected volatility was estimated by taking the average historic stock price volatility for industry peers, consisting of several public companies in our industry which are either similar in size, stage of life cycle or financial leverage, over a period equivalent to the expected term of the awards. • Expected Dividend Yield . We have never declared or paid any cash dividends and do not currently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used. • Expected Term . For stock options, the expected term represents the period that a stock option award is expected to be outstanding. We have limited historical exercise data from which to derive expected term input assumptions. Consequently, we calculate expected term using the SEC simplified method whereby the expected term of a stock option award is equal to the average of the award's contractual term and vesting term. We will continue to use judgment in evaluating the assumptions related to our equity-based compensation on a prospective basis. Partnership Units Valuations For the partnership units granted prior to IPO, the Company relied on valuations prepared by an independent third-party valuation firm in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation , Such valuations were aligned with the Company’s internal valuation approach. Subsequent to the IPO, it is no longer necessary for the Company to estimate the fair value of its partnership units, as no further incentive partnership unit awards will be granted subsequent to the IPO. See Note 12 for additional information. |
Employee Benefit Programs | Employee Benefit Programs The Company has a 401(k) defined contribution plan covering eligible employees. Participants may contribute a percentage of their pre-tax earnings annually, subject to limitations imposed by the Internal Revenue Service. The Company matches contributions, subject to Internal Revenue Service limitations, and contributions vest immediately. The Company’s short-term obligations, which represent wages and salaries for vacation days earned, non-monetary benefits and accumulated sick leaves that are expected to settle wholly within 12 months after the end of the period in which the employees render the related service, are recognized in respect of employee services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are included in accrued liabilities in the consolidated balance sheets. |
Foreign Currencies | Foreign Currencies The functional currency for the Company and its United States and Cayman subsidiaries is the United States dollar, while the functional currency for the Company’s Australian subsidiaries is the Australian dollar. For those subsidiaries, the assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date for assets and liabilities and an average rate for each period for revenues and expenses. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in the consolidated statement of stockholders’ equity. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is composed of two components: net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. The Company has disclosed other comprehensive income (loss) as a component of stockholders’ equity. |
Revenue Recognition | Revenue Recognition Revenue is primarily derived from the sale of apparel merchandise through the Company’s online websites and stores and, when applicable, shipping revenue. Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers in accordance with Revenue from Contracts with Customers (Topic 606) , the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies its performance obligation. A contract is created with the customer at the time the order is placed by the customer, which creates a single performance obligation. The Company recognizes revenue for its single performance obligation at the time control of the product passes to the customer, which is when the goods are transferred to a third-party common carrier, for purchases through the Company’s online websites, or at point of sale, for purchases in our stores. In addition, the Company has elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. |
Cost of Sales | Cost of Sales Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight-in, defective merchandise returned from customers, inventory write-offs and other miscellaneous shrinkage. |
Selling Expense | Selling ExpensesSelling expenses consist of costs incurred in operating and staffing the fulfillment centers and stores, costs attributable to inspecting and warehousing inventory, picking, packaging and preparing customer orders for shipment, customer service, shipping and other transportation costs incurred delivering merchandise to customers and customers returning merchandise, merchant processing fees, and shipping supplies. |
Marketing | MarketingMarketing expenses are expensed as incurred and consist primarily of targeted online performance marketing costs, such as display advertising, retargeting, paid search/product listing ads, affiliate marketing, paid social, search engine optimization, personalized email marketing, social media advertising and mobile “push” communications through the Company’s apps. Marketing expenses also include the Company’s spend on brand marketing channels, including cash compensation to influencers, events and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining the customer base. |
General And Administrative | General and Administrative General and administrative expenses consist primarily of payroll and related benefit costs and equity-based compensation expense for employees involved in general corporate functions including merchandising, marketing and technology, as well as costs associated with the use by these functions of facilities and equipment, including depreciation, rent and other occupancy expenses. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated using net income attributable to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the dilutive effects of stock options and restricted stock units outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. |
Fair Value Measurements | Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The carrying amounts for the Company’s cash and cash equivalents, accounts receivable, accounts payable, line of credit and accrued liabilities approximate fair value due to their short-term maturities. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full-term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company held cash in operating accounts as of December 31, 2021 and 2020. |
Segment Information | Segment Information Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company has determined that its five brands are each an operating segment. The Company has aggregated its operating segments into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics. |
Recently Adopted Accounting Pronouncements and New Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which amended its conceptual framework to improve the effectiveness of disclosures around the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy. This guidance also adds new disclosure requirements for Level 3 measurements. The Company adopted this guidance on January 1, 2020, and the adoption did not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The ASU amended existing guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The amendments were effective beginning in 2020. The adoption did not have a material impact on the Company’s consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and the allocation of consolidated income taxes to separate financial statements of entities not subject to income tax. ASU 2019-12 will be effective for the Company on January 1, 2022. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In March, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The pronouncement provides companies with guidance to ease the process of migrating away from LIBOR and other interbank offered rates to new reference rates. ASC 848 contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, subject to meeting certain criteria that reference LIBOR or another reference rate expected to be discontinued. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three Estimated useful life (years) Furniture and fixtures 5 Machinery and equipment 5 Computer equipment and capitalized software 3 Buildings and leasehold improvements Shorter of the lease term or the estimated life of the assets Property and equipment, net is comprised of the following: December 31, 2021 2020 Furniture and fixtures $ 1,305 $ 411 Machinery and equipment 1,595 185 Computer equipment and capitalized software 2,638 753 Leasehold improvements 12,457 2,020 Total property and equipment 17,995 3,369 Less accumulated depreciation (3,338) (1,248) Total property and equipment, net $ 14,657 $ 2,121 |
Summary of Sales Return Reserve | The following table presents a summary of the Company’s sales return reserve: December 31, 2021 2020 Beginning balance $ 3,517 $ 2,585 Returns (80,915) (36,796) Allowance 84,285 37,728 Ending balance $ 6,887 $ 3,517 |
Disaggregation of Revenue | The following table presents the disaggregation of the Company’s net revenues by geography, based on customer address: Year Ended December 31, 2021 2020 2019 United States $ 270,028 $ 125,179 $ 45,280 Australia 218,563 67,850 47,176 Rest of world 73,600 22,887 9,984 Total $ 562,191 $ 215,916 $ 102,440 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair values of assets acquired, liabilities assumed and noncontrolling interest as of the date of the acquisition, are as follows: Trade receivables $ 6 Inventory 630 Prepaid expenses and other current assets 78 Property and equipment, net 93 Operating lease right-of-use assets 430 Intangible assets 7,695 Trade and other payables (1,218) Deferred tax liability (2,272) Current tax liabilities (407) Operating lease liabilities (430) Total net assets acquired 4,605 Fair value of noncontrolling interest (8,314) Goodwill 24,214 Total purchase price, net of cash acquired of $2,109 $ 20,505 The following table sets forth the allocation of the total consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, as of the date of the acquisition, with the excess recorded to goodwill: Purchase consideration: Total purchase price, net of cash acquired of $8,831 $ 227,053 Fair value of noncontrolling interest 142,717 Total consideration $ 369,770 Identifiable net assets acquired: Account receivable, net $ 625 Inventory (1) 62,937 Prepaid expenses and other current assets 4,800 Property and equipment, net 8,048 Intangible assets, net (2) 73,209 Operating lease right-of-use assets 24,299 Accounts payable (13,449) Deferred revenue (141) Income taxes payable (1,778) Other current liabilities (2,533) Operating lease liabilities (24,299) Deferred income taxes, net (25,439) Accrued liabilities, non-current (1,058) Net assets acquired 105,221 Goodwill $ 264,549 The purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1) Inventory was adjusted by $15.1 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include: Estimated Fair Value Annual Amortization Expense Estimated Useful Life in Years Brand names $ 68,354 $ 6,835 10 years Customer relationships 4,855 1,214 4 years Total $ 73,209 The estimated fair values of assets acquired and liabilities assumed as of the date of the acquisition, are as follows: Accounts receivable, net $ 68 Inventory (1) 7,321 Prepaid expenses and other current assets 2,178 Other assets 15 Intangible assets (2) 14,300 Accounts payable (504) Deferred income (164) Accrued liabilities (1,794) Assumed loan (1,312) Sales and use tax liability (1,100) Deferred income taxes, net (3,159) Total net assets acquired 15,849 Goodwill 29,650 Total purchase price, net of cash acquired of $605 $ 45,499 The cash purchase consideration is subject to working capital adjustments that will be concluded before the one-year anniversary of the close of the transaction. The preliminary purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed. The valuations involving the most significant assumptions, estimates and judgment are: (1) Inventory was adjusted by $1.9 million to step-up inventory cost to estimated fair value. The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort. (2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include: Fair Value at Acquisition Date Amortization Period Brand $ 11,800 10 years Customer relationships 2,500 3 years Total intangible assets $ 14,300 |
Schedule of Acquired Finite-Lived Intangible Assets | The following table summarizes the identifiable intangible assets acquired as of the date of the acquisition: Fair Value at Acquisition Date Amortization Period Brand $ 5,112 10 years Customer relationships 2,583 4 years Total intangible assets $ 7,695 Estimated Fair Value Annual Amortization Expense Estimated Useful Life in Years Brand names $ 68,354 $ 6,835 10 years Customer relationships 4,855 1,214 4 years Total $ 73,209 Fair Value at Acquisition Date Amortization Period Brand $ 11,800 10 years Customer relationships 2,500 3 years Total intangible assets $ 14,300 The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of December 31, 2021 and 2020, included in intangible assets, net in the accompanying consolidated balance sheets, are as follows: December 31, Useful life Weighted Average Amortization Period 2021 2021 Weighted Average Amortization Period 2020 2020 Customer relationships 4 years 2.5 years $ 24,516 1.8 years $ 17,100 Brands 10 years 8.9 years 100,315 7.8 years 26,680 Website design and software system 3 years 2.2 years 1,883 2.4 years 903 Trademarks 5 years 3.3 years 114 4.5 years 103 Total intangible assets 126,828 44,786 Less accumulated amortization (28,541) (15,684) Total intangible assets, net $ 98,287 $ 29,102 |
Condensed Income Statement | The following amounts are included in the accompanying consolidated statement of income for the year ended December 31, 2021: Year Ended December 31, 2021 Net sales $ 196,471 Net loss $ (5,899) |
Business Acquisition, Pro Forma Information | The unaudited pro forma financial information below is presented to illustrate the estimated effects of the acquisition of Culture Kings and the associated financing as if they had occurred on January 1, 2020: Year Ended December 31, 2021 2020 Net sales $ 613,390 $ 385,048 Net income attributable to a.k.a. Brands Holding Corp. $ 16,781 $ 9,238 Net income per share, basic and diluted: $ 0.17 $ 0.11 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid, and Other Assets Disclosure | Prepaid expenses and other current assets are comprised of the following: December 31, 2021 2020 Inventory prepayments 14,251 3,722 Other 6,558 358 Total prepaid expenses and other current assets $ 20,809 $ 4,080 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three Estimated useful life (years) Furniture and fixtures 5 Machinery and equipment 5 Computer equipment and capitalized software 3 Buildings and leasehold improvements Shorter of the lease term or the estimated life of the assets Property and equipment, net is comprised of the following: December 31, 2021 2020 Furniture and fixtures $ 1,305 $ 411 Machinery and equipment 1,595 185 Computer equipment and capitalized software 2,638 753 Leasehold improvements 12,457 2,020 Total property and equipment 17,995 3,369 Less accumulated depreciation (3,338) (1,248) Total property and equipment, net $ 14,657 $ 2,121 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes goodwill activity: Balance as of December 31, 2019 $ 80,221 Changes in foreign currency translation 8,032 Balance as of December 31, 2020 88,253 Acquisitions (Note 3) 294,200 Changes in foreign currency translation (19,148) Balance as of December 31, 2021 $ 363,305 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets | The following table summarizes the identifiable intangible assets acquired as of the date of the acquisition: Fair Value at Acquisition Date Amortization Period Brand $ 5,112 10 years Customer relationships 2,583 4 years Total intangible assets $ 7,695 Estimated Fair Value Annual Amortization Expense Estimated Useful Life in Years Brand names $ 68,354 $ 6,835 10 years Customer relationships 4,855 1,214 4 years Total $ 73,209 Fair Value at Acquisition Date Amortization Period Brand $ 11,800 10 years Customer relationships 2,500 3 years Total intangible assets $ 14,300 The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of December 31, 2021 and 2020, included in intangible assets, net in the accompanying consolidated balance sheets, are as follows: December 31, Useful life Weighted Average Amortization Period 2021 2021 Weighted Average Amortization Period 2020 2020 Customer relationships 4 years 2.5 years $ 24,516 1.8 years $ 17,100 Brands 10 years 8.9 years 100,315 7.8 years 26,680 Website design and software system 3 years 2.2 years 1,883 2.4 years 903 Trademarks 5 years 3.3 years 114 4.5 years 103 Total intangible assets 126,828 44,786 Less accumulated amortization (28,541) (15,684) Total intangible assets, net $ 98,287 $ 29,102 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future estimated amortization expense for acquired identifiable intangible assets is as follows: Year ending December 31: 2022 $ 15,349 2023 13,028 2024 12,327 2025 11,022 2026 10,027 Thereafter 36,534 Total amortization expense $ 98,287 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | Outstanding debt consisted of the following: December 31, 2021 2020 Bank loans - flexible rate loan $ — $ 6,385 Term loan 110,750 — Revolving credit facility — — Capitalized debt issuance costs (1,968) (32) Total debt 108,782 6,353 Less current portion (5,600) (6,353) Total long-term debt $ 103,182 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease Cost | The Company’s operating lease costs were as follows: Year Ended December 31, 2021 2020 2019 Operating lease costs $ 5,823 $ 1,192 $ 479 Variable lease costs 155 130 118 Total lease costs $ 5,978 $ 1,322 $ 597 |
Schedule Of Supplemental Information Related To Operating Leases | Supplemental cash flow information relating to the Company’s operating leases was as follows: Year Ended December 31, 2021 2020 2019 Cash paid for operating lease liabilities $ 5,490 $ 1,193 $ 479 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 4,073 — 2,340 Other information relating to the Company’s operating leases was as follows: As of December 31, 2021 2020 Weighted-average remaining lease term 6.1 years 3.9 years Weighted-average discount rate 3.9% 3.6% |
Schedule of Operating Lease Maturity | As of December 31, 2021, the maturities of operating lease liabilities were as follows: 2022 $ 6,689 2023 6,724 2024 4,094 2025 3,340 2026 2,480 Thereafter 7,380 Total remaining lease payments 30,707 Less: imputed interest 3,616 Total operating lease liabilities 27,091 Less: current portion (5,721) Long-term operating lease liabilities $ 21,370 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (loss) Before Income Tax | Income (loss) from continuing operations before income taxes consisted of the following: Year Ended December 31, 2021 2020 2019 United States $ (245) $ 8,360 $ 589 Foreign (4,994) 13,295 1,865 Income (loss) from continuing operations before income taxes $ (5,239) $ 21,655 $ 2,454 |
Schedule of Components of Income Tax Expense | The components of the provision for income taxes consisted of the following: Year Ended December 31, 2021 2020 2019 Current: Federal $ 2,631 $ 2,108 $ 257 State 733 310 47 Foreign 7,828 7,099 2,642 Total 11,192 9,517 2,946 Deferred: Federal (579) 117 105 State (42) (17) (1) Foreign (9,719) (2,767) (2,038) Total (10,340) (2,667) (1,934) Income tax expense $ 852 $ 6,850 $ 1,012 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the tax computed using the statutory U.S. federal income tax rate of 21% as a result of the following items: Year Ended December 31, 2021 2020 2019 Tax expense (benefit) at U.S. statutory rate $ (1,100) $ 4,548 $ 515 State income taxes, net of federal income tax benefit 546 246 36 Permanent differences 1,121 467 2,802 Foreign tax rate differential (886) 1,536 210 Transaction costs (477) — — Equity-based compensation 1,689 — — Other (41) 53 (2,551) Income tax expense $ 852 $ 6,850 $ 1,012 |
Schedule of Deferred Tax Assets and Liabilities | The components of net deferred tax assets (liabilities) were as follows: Year Ended December 31, 2021 2020 Deferred tax assets: Transaction costs $ 2,129 $ 466 Property and equipment 439 — Accruals and reserves 4,397 1,962 Lease liabilities 7,005 894 State taxes — 64 Inventory 1,653 — Foreign exchange gains / losses 92 373 Net operating loss carryforwards — 135 Subtotal 15,715 3,894 Less: Valuation allowance — (144) Total deferred tax assets 15,715 3,750 Deferred tax liabilities: Property and equipment — (439) Intangible assets (11,557) (8,378) Right-of-use assets (7,041) (745) Inventory — (70) Other (37) (22) Total deferred tax liabilities (18,635) (9,654) Net deferred liabilities $ (2,920) $ (5,904) |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, 2021 2020 Accrued salaries and other benefits $ 11,746 $ 3,295 Accrued freight costs 9,199 5,012 Sales tax payable 20,008 5,718 Accrued marketing costs 2,543 959 Accrued professional services 1,698 281 Other accrued liabilities 8,181 2,904 Total accrued liabilities $ 53,375 $ 18,169 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity | A summary of the Company's time-based stock option activity under the 2021 Plan was as follows: Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Balance as of December 31, 2020 — $ 0.00 — Granted 273,026 9.50 Vested — 0.00 Forfeited/Repurchased — 0.00 Balance as of December 31, 2021 273,026 $ 9.50 $ — Vested as of December 31, 2021 — $ 0.00 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions that the Company used to determine the grant date fair value of stock options granted under the 2021 Plan during the year ended December 31, 2021 were as follows, presented on a weighted-average basis: Risk free interest rate 1.00 % Expected volatility 51.32 % Expected dividend yield 0 % Expected term 6.08 years The assumptions that the Company used to determine the grant date fair value of time-based incentive units granted under the 2018 Plan were as follows, presented on a weighted-average basis: Year Ended December 31, 2021 2020 2019 Risk free interest rate 0.16 % 0.24 % 2.08 % Expected volatility 50 % 50 % 50 % Expected dividend yield 0 % 0 % 0 % Expected term 2.87 years 3.14 years 4.21 years |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of the Company's RSU activity under the 2021 Plan was as follows: Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2020 — $ 0.00 Granted 942,371 9.99 Vested — 0.00 Forfeited/Repurchased — 0.00 Balance as of December 31, 2021 942,371 $ 9.99 The following table summarizes time-based incentive unit activity under the 2018 Plan: Number of Units Weighted Average Grant Date Fair value Weighted Average Participation Threshold Aggregate Intrinsic Value Balance as of December 31, 2019 3,403,967 $ 0.48 $ 1.02 $ 2,218 Granted 5,507,644 $ 1.37 $ 1.27 Vested (1,200,934) $ 0.47 $ 1.02 Forfeited/Repurchased (1,463,051) $ 0.45 $ 1.02 Balance as of December 31, 2020 6,247,626 $ 1.27 $ 1.24 $ 23,688 Granted 2,079,417 0.90 6.36 Vested (2,351,230) 1.21 1.22 Forfeited/Repurchased — — — Balance as of December 31, 2021 5,975,813 $ 1.16 $ 3.04 $ 23,286 Vested as of December 31, 2021 3,357,449 The following table summarizes performance-based incentive unit activity under the 2018 Plan: Number of Units Weighted Average Grant Date Fair value Weighted Average Participation Threshold Aggregate Intrinsic Value Balance as of December 31, 2019 2,322,372 $ 0.33 $ 1.02 $ 1,534 Granted 3,394,379 $ 1.09 $ 1.24 Forfeited (1,254,987) $ 0.30 $ 1.01 Balance as of December 31, 2020 4,461,764 $ 0.91 $ 1.19 $ 17,137 Granted 932,124 $ 1.01 $ 6.09 Vested (5,393,888) 0.93 2.04 Forfeited — — — Balance as of December 31, 2021 — $ — $ 0.00 Vested as of December 31, 2021 5,393,888 |
Summarizes The Company’s Equity-based Compensation Expense | The following table summarizes the Company’s equity-based compensation expense by award type for all Plans: Year Ended December 31, 2021 2020 2019 Stock options $ 95 $ — $ — RSUs 655 — — Time-based incentive units 2,390 1,380 353 Performance-based incentive units 4,903 — — Total $ 8,043 $ 1,380 $ 353 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Income (Loss) Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income (loss) per share and a reconciliation of the weighted average number of shares outstanding: Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) attributable to a.k.a. Brands Holding Corp. $ (5,968) $ 14,334 $ 1,394 Denominator: Weighted-average common shares outstanding, basic 93,231,377 69,846,362 61,988,641 Dilutive securities: Stock options — — — RSUs — — — Weighted-average common shares outstanding, diluted 93,231,377 69,846,362 61,988,641 Net income (loss) per share: Net income (loss) per share, basic $ (0.06) $ 0.21 $ 0.02 Net income (loss) per share, diluted $ (0.06) $ 0.21 $ 0.02 |
Description of Business - Initi
Description of Business - Initial Public Offering (Details) - IPO $ / shares in Units, $ in Millions | 1 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Subsidiary, Sale of Stock [Line Items] | |
Number of shares issued in transaction (in shares) | shares | 10,000,000 |
Sale of stock (in dollars per share) | $ / shares | $ 11 |
Proceeds from issuance of units | $ 95.7 |
Underwriting discounts and commissions | 6.6 |
Payment of deferred offering costs | $ 7.7 |
Description of Business - Reorg
Description of Business - Reorganization Transactions (Details) $ in Thousands, $ in Millions | Aug. 19, 2021AUD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2021AUD ($) | Mar. 31, 2021shares | Dec. 31, 2021 | Aug. 18, 2021 |
Culture Kings | ||||||
Business Acquisition [Line Items] | ||||||
Equity interest number of shares issued (in shares) | shares | 21,809,804 | |||||
Percent of ownership acquired | 55.00% | 55.00% | ||||
Total consideration | $ 369,770 | |||||
P&P Holdings, LP | ||||||
Business Acquisition [Line Items] | ||||||
Percent of ownership acquired | 6.00% | 27.30% | 27.30% | |||
Total consideration | $ 5 | $ 22.8 | ||||
Culture Kings | ||||||
Business Acquisition [Line Items] | ||||||
Ownership by parent, percent | 55.00% | 55.00% | ||||
Equity interest owned percentage | 45.00% | 45.00% | ||||
Culture Kings Business | Culture Kings | ||||||
Business Acquisition [Line Items] | ||||||
Ownership percent | 100.00% | |||||
P&P Holdings, LP | ||||||
Business Acquisition [Line Items] | ||||||
Ownership by parent, percent | 66.70% | |||||
Equity interest owned percentage | 33.30% |
Description of Business - Refin
Description of Business - Refinancing (Details) - Subsidiary - Affiliated Entity - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Senior Subordinated Notes | ||
Debt Instrument [Line Items] | ||
Face amount | $ 25,000,000 | |
Senior Secured Term Loan Facility | Term loan | ||
Debt Instrument [Line Items] | ||
Face amount | $ 100,000,000 | 125,000,000 |
Revolving credit facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 50,000,000 | $ 25,000,000 |
Description of Business - Histo
Description of Business - Historical Units (Details) | 1 Months Ended |
Sep. 30, 2021 | |
Directors And Members | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Reverse split factor | 61.25% |
Significant Accounting Polici_4
Significant Accounting Policies - Concentration of Credit Risk, Accounts Receivable And Inventory, Net (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Cash held in banks outside of the United States | $ 28,200,000 | $ 10,900,000 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Significant Accounting Polici_5
Significant Accounting Policies - Deferred Offering Cost Narrative (Details) - USD ($) | 1 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | |||
Deferred offering costs | $ 0 | $ 0 | |
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Payment of deferred offering costs | $ 7,700,000 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Property, Plant And Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Useful life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Useful life | 10 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Computer equipment and capitalized software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Website development costs | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Significant Accounting Polici_7
Significant Accounting Policies - Goodwill, Intangible Assets And Other Long-Lived Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Goodwill | $ 363,305,000 | $ 88,253,000 | $ 80,221,000 |
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 3 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 10 years |
Significant Accounting Polici_8
Significant Accounting Policies - Equity-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Requisite service period | 4 years |
Significant Accounting Polici_9
Significant Accounting Policies - Foreign Currencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Foreign currency transaction losses | $ 1.7 | $ 0.2 | $ 0.1 |
Significant Accounting Polic_10
Significant Accounting Policies - Revenue Recognition Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Sales returns reserve | $ 6,887 | $ 3,517 | $ 2,585 |
Breakage Of Online Credit And Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 500 | $ 700 | $ 400 |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Refund period | 30 days | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Refund period | 45 days |
Significant Accounting Polic_11
Significant Accounting Policies - Schedule Of Sales Return Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sales Return Reserve | ||
Beginning balance | $ 3,517 | $ 2,585 |
Returns | (80,915) | (36,796) |
Allowance | 84,285 | 37,728 |
Ending balance | $ 6,887 | $ 3,517 |
Significant Accounting Polic_12
Significant Accounting Policies - Revenue Disaggregation Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 562,191 | $ 215,916 | $ 102,440 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 270,028 | 125,179 | 45,280 |
Australia | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 218,563 | 67,850 | 47,176 |
Rest of world | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 73,600 | $ 22,887 | $ 9,984 |
Significant Accounting Polic_13
Significant Accounting Policies - Selling, Marketing, General and Administrative and Other Expenses, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Selling expense | $ 144,345 | $ 58,313 | $ 28,091 |
Loss on extinguishment of debt | 10,924 | 0 | 0 |
Interest expense | 9,485 | 329 | 272 |
Foreign currency losses | 1,700 | 200 | 100 |
Shipping and Handling | |||
Disaggregation of Revenue [Line Items] | |||
Selling expense | $ 70,700 | $ 34,100 | $ 16,700 |
Significant Accounting Polic_14
Significant Accounting Policies -Segment Information (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Accounting Policies [Abstract] | |
Number of brands | 5 |
Number of operating segments | 5 |
Number of reportable segments | 1 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ / shares in Units, $ in Millions | Oct. 14, 2021USD ($)shares | Aug. 19, 2021AUD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021AUD ($) | Dec. 06, 2019USD ($) | Aug. 09, 2019USD ($) | Aug. 09, 2019AUD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021AUD ($) | Mar. 31, 2021USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2021AUD ($) | Aug. 09, 2019AUD ($) |
Business Acquisition [Line Items] | |||||||||||||||||
Payment to acquire business, net of cash acquired | $ 249,302,000 | $ 600,000 | $ 20,425,000 | ||||||||||||||
Goodwill | $ 80,221,000 | $ 80,221,000 | $ 363,305,000 | $ 88,253,000 | 80,221,000 | ||||||||||||
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||
Purchase of noncontrolling interest | $ 20,198,000 | ||||||||||||||||
Non-controlling Interest | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase of noncontrolling interest | 9,599,000 | ||||||||||||||||
Additional Paid-In Capital | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase of noncontrolling interest | 10,599,000 | ||||||||||||||||
P&P Holdings, LP | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Equity interest owned percentage | 33.30% | 33.30% | |||||||||||||||
Culture Kings | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Equity interest owned percentage | 45.00% | 45.00% | 45.00% | ||||||||||||||
Petal & Pup Limited | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percent of ownership acquired | 66.70% | 66.70% | |||||||||||||||
Payment to acquire business, net of cash acquired | $ 19,900,000 | $ 29.4 | |||||||||||||||
Cash acquired from acquisition | 2,109,000 | $ 3.1 | |||||||||||||||
Consideration payable | 600,000 | $ 0.9 | |||||||||||||||
Revenue | 9,400,000 | ||||||||||||||||
Net income (loss)(less than) | $ 100,000 | ||||||||||||||||
Goodwill | 24,214,000 | ||||||||||||||||
Acquisition costs | $ 700,000 | ||||||||||||||||
Inventory | 630,000 | ||||||||||||||||
Fair value of noncontrolling interest | $ 8,314,000 | ||||||||||||||||
Rebdolls, Inc | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percent of ownership acquired | 100.00% | ||||||||||||||||
Consideration payable | $ 100,000 | ||||||||||||||||
Revenue | 100,000 | ||||||||||||||||
Net income (loss)(less than) | $ (200,000) | ||||||||||||||||
Goodwill | 500,000 | ||||||||||||||||
Total consideration | 600,000 | ||||||||||||||||
Upfront cash consideration | 500,000 | ||||||||||||||||
Inventory | 100,000 | ||||||||||||||||
Intangible assets | $ 100,000 | ||||||||||||||||
Culture Kings | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percent of ownership acquired | 55.00% | 55.00% | 55.00% | ||||||||||||||
Payment to acquire business, net of cash acquired | $ 227,053,000 | ||||||||||||||||
Cash acquired from acquisition | 8,831,000 | ||||||||||||||||
Revenue | 196,471,000 | ||||||||||||||||
Goodwill | 264,549,000 | $ 264,549,000 | |||||||||||||||
Acquisition costs | 3,300,000 | ||||||||||||||||
Total consideration | 369,770,000 | ||||||||||||||||
Upfront cash consideration | 235,900,000 | $ 307.4 | |||||||||||||||
Inventory | 62,937,000 | 62,937,000 | |||||||||||||||
Fair value of noncontrolling interest | 142,717,000 | 142,717,000 | $ 186 | ||||||||||||||
Goodwill deductible for tax purposes | $ 0 | $ 0 | |||||||||||||||
Equity interest number of shares issued (in shares) | shares | 21,809,804 | ||||||||||||||||
Purchase of Culture Kings noncontrolling interest | 132,278,000 | ||||||||||||||||
Culture Kings | Additional Paid-In Capital | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase of Culture Kings noncontrolling interest | $ 132,256,000 | ||||||||||||||||
P&P Holdings, LP | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percent of ownership acquired | 6.00% | 27.30% | 27.30% | 27.30% | |||||||||||||
Total consideration | $ 5 | $ 22.8 | |||||||||||||||
P&P Holdings, LP | Non-controlling Interest | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase of noncontrolling interest | $ 9,600,000 | ||||||||||||||||
P&P Holdings, LP | Additional Paid-In Capital | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase of noncontrolling interest | $ 10,600,000 | ||||||||||||||||
Third Estate LLC (mnml) | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payment to acquire business, net of cash acquired | $ 28,200,000 | ||||||||||||||||
Cash acquired from acquisition | 605,000 | ||||||||||||||||
Revenue | $ 11,600,000 | ||||||||||||||||
Net income (loss)(less than) | 1,000,000 | ||||||||||||||||
Goodwill | 29,650,000 | ||||||||||||||||
Acquisition costs | $ 1,300,000 | ||||||||||||||||
Total consideration | 46,100,000 | ||||||||||||||||
Inventory | 7,321,000 | ||||||||||||||||
Goodwill deductible for tax purposes | 0 | ||||||||||||||||
Equity interests issued and issuable | $ 17,300,000 | ||||||||||||||||
Equity interest number of shares issued (in shares) | shares | 2,057,695 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed - Petal & Pup (Details) $ in Thousands, $ in Millions | Aug. 09, 2019USD ($) | Aug. 09, 2019AUD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 363,305 | $ 88,253 | $ 80,221 | ||
Petal & Pup Limited | |||||
Business Acquisition [Line Items] | |||||
Trade receivables | $ 6 | ||||
Inventory | 630 | ||||
Prepaid expenses and other current assets | 78 | ||||
Property and equipment, net | 93 | ||||
Operating lease right-of-use assets | 430 | ||||
Intangible assets | 7,695 | ||||
Trade and other payables | (1,218) | ||||
Deferred tax liability | (2,272) | ||||
Current tax liabilities | (407) | ||||
Operating lease liabilities | (430) | ||||
Total net assets acquired | 4,605 | ||||
Fair value of noncontrolling interest | (8,314) | ||||
Goodwill | 24,214 | ||||
Cash acquired from acquisition | 2,109 | $ 3.1 | |||
Total purchase price, net of cash acquired | $ 20,505 |
Acquisitions - Schedule of As_2
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed - Culture Kings (Details) $ in Thousands, $ in Millions | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2021AUD ($) |
Purchase consideration: | |||||
Total purchase price, net of cash acquired of $8,831 | $ 249,302 | $ 600 | $ 20,425 | ||
Identifiable net assets acquired: | |||||
Goodwill | $ 363,305 | $ 88,253 | $ 80,221 | ||
Culture Kings | |||||
Purchase consideration: | |||||
Cash acquired from acquisition | $ 8,831 | ||||
Total purchase price, net of cash acquired of $8,831 | 227,053 | ||||
Fair value of noncontrolling interest | 142,717 | $ 186 | |||
Total consideration | 369,770 | ||||
Identifiable net assets acquired: | |||||
Trade receivables | 625 | ||||
Inventory | 62,937 | ||||
Prepaid expenses and other current assets | 4,800 | ||||
Property and equipment, net | 8,048 | ||||
Intangible assets | 73,209 | ||||
Operating lease right-of-use assets | 24,299 | ||||
Trade and other payables | (13,449) | ||||
Deferred revenue | (141) | ||||
Income taxes payable | (1,778) | ||||
Other current liabilities | (2,533) | ||||
Operating lease liabilities | (24,299) | ||||
Deferred tax liability | (25,439) | ||||
Accrued liabilities, non-current | (1,058) | ||||
Total net assets acquired | 105,221 | ||||
Goodwill | 264,549 | ||||
Inventory adjustment | $ 15,100 |
Acquisitions - Schedule of As_3
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed - mnml (Details) - USD ($) $ in Thousands | Oct. 14, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 363,305 | $ 88,253 | $ 80,221 | |
Third Estate LLC (mnml) | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable, net | $ 68 | |||
Inventory | 7,321 | |||
Prepaid expenses and other current assets | 2,178 | |||
Other assets | 15 | |||
Intangible assets | 14,300 | |||
Accounts payable | (504) | |||
Deferred income | (164) | |||
Accrued liabilities | (1,794) | |||
Assumed loan | (1,312) | |||
Sales and use tax liability | (1,100) | |||
Deferred tax liability | (3,159) | |||
Total net assets acquired | 15,849 | |||
Goodwill | 29,650 | |||
Total purchase price, net of cash acquired | 45,499 | |||
Cash acquired from acquisition | 605 | |||
Inventory adjustment | $ 1,900 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Oct. 14, 2021 | Mar. 31, 2021 | Aug. 09, 2019 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization of intangible assets | $ 13,900 | $ 6,400 | $ 5,800 | ||||
Brand | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization Period | 10 years | ||||||
Customer relationships | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization Period | 4 years | ||||||
Petal & Pup Limited | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 7,695 | ||||||
Petal & Pup Limited | Brand | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | 5,112 | ||||||
Petal & Pup Limited | Customer relationships | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 2,583 | ||||||
Culture Kings | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 73,209 | $ 73,209 | |||||
Culture Kings | Brand | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 68,354 | 68,354 | |||||
Amortization of intangible assets | 6,835 | ||||||
Amortization Period | 10 years | ||||||
Culture Kings | Customer relationships | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 4,855 | 4,855 | |||||
Amortization of intangible assets | $ 1,214 | ||||||
Amortization Period | 4 years | ||||||
Third Estate LLC (mnml) | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 14,300 | ||||||
Third Estate LLC (mnml) | Brand | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 11,800 | ||||||
Amortization Period | 10 years | ||||||
Third Estate LLC (mnml) | Customer relationships | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Fair Value at Acquisition Date | $ 2,500 | ||||||
Amortization Period | 3 years |
Acquisitions - Accompanying Con
Acquisitions - Accompanying Condensed Consolidated Statement Of Income (Details) - Culture Kings $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 196,471 |
Net loss | $ (5,899) |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Net sales | $ 613,390 | $ 385,048 |
Net income attributable to a.k.a. Brands Holding Corp. | $ 16,781 | $ 9,238 |
Net income per share, basic (in dollars per share) | $ 0.17 | $ 0.11 |
Culture Kings | ||
Business Acquisition [Line Items] | ||
Net income per share, diluted (in dollars per share) | $ 0.17 | $ 0.11 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Inventory prepayments | $ 14,251 | $ 3,722 |
Other | 6,558 | 358 |
Total prepaid expenses and other current assets | $ 20,809 | $ 4,080 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 17,995 | $ 3,369 | |
Less accumulated depreciation | (3,338) | (1,248) | |
Total property and equipment, net | 14,657 | 2,121 | |
Depreciation expense | 2,694 | 353 | $ 467 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,305 | 411 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,595 | 185 | |
Computer equipment and capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 2,638 | 753 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 12,457 | $ 2,020 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 363,305,000 | $ 88,253,000 | $ 80,221,000 |
Goodwill impairment | 0 | 0 | 0 |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 88,253,000 | 80,221,000 | |
Acquisitions (Note 3) | 294,200,000 | ||
Changes in foreign currency translation | (19,148,000) | 8,032,000 | |
Goodwill, ending balance | $ 363,305,000 | $ 88,253,000 | $ 80,221,000 |
Intangible Assets - Acquired In
Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 126,828 | $ 44,786 |
Less accumulated amortization | (28,541) | (15,684) |
Total intangible assets, net | $ 98,287 | $ 29,102 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | |
Weighted Average Amortization Period | 2 years 6 months | 1 year 9 months 18 days |
Total intangible assets | $ 24,516 | $ 17,100 |
Brands | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | |
Weighted Average Amortization Period | 8 years 10 months 24 days | 7 years 9 months 18 days |
Total intangible assets | $ 100,315 | $ 26,680 |
Website design and software system | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Weighted Average Amortization Period | 2 years 2 months 12 days | 2 years 4 months 24 days |
Total intangible assets | $ 1,883 | $ 903 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Weighted Average Amortization Period | 3 years 3 months 18 days | 4 years 6 months |
Total intangible assets | $ 114 | $ 103 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 13.9 | $ 6.4 | $ 5.8 |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 15,349 | |
2023 | 13,028 | |
2024 | 12,327 | |
2025 | 11,022 | |
2026 | 10,027 | |
Thereafter | 36,534 | |
Total intangible assets, net | $ 98,287 | $ 29,102 |
Debt - Princess Polly Operating
Debt - Princess Polly Operating Line of Credit (Details) - Subsidiary - Princess Polly $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020AUD ($) |
Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 15,400,000 | ||
Current borrowing capacity | $ 6,200,000 | ||
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | $ 0.8 |
Debt - Rebdolls Revolving Line
Debt - Rebdolls Revolving Line of Credit (Details) - Revolving credit facility - Bank Of America, N.A - Subsidiary - Rebdolls, Inc - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 500,000 | |
Amount outstanding | $ 200,000 |
Debt - Debt Financing For The C
Debt - Debt Financing For The Culture Kings Acquisition (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||||
Proceeds from issuance of debt, net of issuance costs | $ 254,134,000 | $ 0 | $ 0 | |
Outstanding amount | $ 108,782,000 | $ 6,353,000 | ||
Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding amount | $ 144,100,000 | |||
Loan fees | 5,900,000 | |||
Debt issuance costs | 6,900,000 | |||
Polly Holdco Pty Lrd. (Polly) | Term loan | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 125,000,000 | |||
Quarterly payments, percent | 0.80% | |||
Polly Holdco Pty Lrd. (Polly) | Term loan | LIBOR | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.50% | |||
Interest rate threshold | 1.00% | |||
Polly Holdco Pty Lrd. (Polly) | Term loan | Alternative Base Rate | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 6.50% | |||
Polly Holdco Pty Lrd. (Polly) | Term loan | Term Loan And Senior Subordinated notes | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Debt issuance costs | $ 5,900,000 | |||
Polly Holdco Pty Lrd. (Polly) | Senior Subordinated Notes | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from issuance of debt, net of issuance costs | $ 25,000,000 | |||
Interest rate stated percentage | 16.00% | |||
Revolving credit facility | Polly Holdco Pty Lrd. (Polly) | Line of Credit | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 25,000,000 | |||
Debt issuance costs, credit facility | 1,000,000 | |||
Amount outstanding | $ 13,000,000 | |||
Debt issuance cost, amortization period | 6 years | |||
Revolving credit facility | Polly Holdco Pty Lrd. (Polly) | Line of Credit | LIBOR | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.50% | |||
Revolving credit facility | Polly Holdco Pty Lrd. (Polly) | Line of Credit | Alternative Base Rate | Affiliated Entity | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 6.50% |
Debt - New Senior Secured Credi
Debt - New Senior Secured Credit Facility (Details) - USD ($) | Sep. 24, 2021 | Mar. 31, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||||
Proceeds from line of credit, net of issuance costs | $ 34,150,000 | $ 10,889,000 | $ 0 | |||||
Additional debt issuance costs | $ 1,968,000 | $ 32,000 | ||||||
New Senior Secured Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment penalty | $ 4,500,000 | |||||||
Write off of deferred debt issuance cost | $ 6,400,000 | |||||||
New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Net leverage ratio (greater than) | 3.50 | |||||||
Fixed charge coverage ratio, maximum | 1.25 | |||||||
Debt issuance costs | $ 2,700,000 | |||||||
New Senior Secured Credit Facility | Affiliated Entity | Leverage Ratio Exceeds 2.75 | ||||||||
Debt Instrument [Line Items] | ||||||||
Percent of excess cash flow | 50.00% | |||||||
New Senior Secured Credit Facility | Affiliated Entity | Leverage Ratio Greater Than Or Equal 2.25 | ||||||||
Debt Instrument [Line Items] | ||||||||
Net leverage ratio (greater than) | 2.25 | |||||||
Percent of excess cash flow | 25.00% | |||||||
Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 6,900,000 | |||||||
Term loan | New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 100,000,000 | |||||||
Debt instrument, term | 5 years | |||||||
Amortized annual payments percentage, year one | 5.00% | |||||||
Amortized annual payments percentage, year two | 5.00% | |||||||
Amortized annual payments percentage, year three | 7.50% | |||||||
Amortized annual payments percentage, year four | 7.50% | |||||||
Amortized annual payments percentage, year five | 10.00% | |||||||
Net leverage ratio (greater than) | 2.75 | |||||||
Basis spread on variable rate | 3.25% | |||||||
Debt issuance costs | $ 1,800,000 | |||||||
Term loan | Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 125,000,000 | |||||||
Term loan | LIBOR | Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 7.50% | |||||||
Revolving credit facility | Line of Credit | New Senior Secured Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from line of credit, net of issuance costs | $ 12,000,000 | $ 15,000,000 | ||||||
Interest rate for borrowings | 3.37% | |||||||
Additional debt issuance costs | $ 300,000 | |||||||
Revolving credit facility | Line of Credit | New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 50,000,000 | |||||||
Additional borrowing capacity (up to) | $ 50,000,000 | |||||||
Debt instrument, term | 5 years | |||||||
Debt issuance costs, credit facility | $ 900,000 | |||||||
Revolving credit facility | Line of Credit | Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||
Debt issuance costs, credit facility | $ 1,000,000 | |||||||
Revolving credit facility | Line of Credit | LIBOR | New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.25% | |||||||
Revolving credit facility | Line of Credit | LIBOR | Polly Holdco Pty Lrd. (Polly) | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 7.50% | |||||||
Revolving credit facility | Line of Credit | Minimum | New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused amounts under the revolver (in percent) | 0.25% | |||||||
Revolving credit facility | Line of Credit | Maximum | New Senior Secured Credit Facility | Affiliated Entity | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused amounts under the revolver (in percent) | 0.35% |
Debt - Total Debt and Interest
Debt - Total Debt and Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Capitalized debt issuance costs | $ (1,968) | $ (32) | |
Total debt | 108,782 | 6,353 | |
Less current portion | (5,600) | (6,353) | |
Total long-term debt | 103,182 | 0 | |
Interest expense | 9,500 | 300 | $ 300 |
Bank loans - flexible rate loan | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 0 | 6,385 | |
Term loan | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 110,750 | 0 | |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Extension options | 6 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Extension options | 3 years |
Leases - Operating Lease Costs
Leases - Operating Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease costs | $ 5,823 | $ 1,192 | $ 479 |
Variable lease costs | 155 | 130 | 118 |
Total lease costs | $ 5,978 | $ 1,322 | $ 597 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Cash paid for operating lease liabilities | $ 5,490 | $ 1,193 | $ 479 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 4,073 | $ 0 | $ 2,340 |
Leases - Other Information Rela
Leases - Other Information Relating To The Company’s Operating Leases (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 6 years 1 month 6 days | 3 years 10 months 24 days |
Weighted-average discount rate | 3.90% | 3.60% |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 6,689 | |
2023 | 6,724 | |
2024 | 4,094 | |
2025 | 3,340 | |
2026 | 2,480 | |
Thereafter | 7,380 | |
Total remaining lease payments | 30,707 | |
Less: imputed interest | 3,616 | |
Total operating lease liabilities | 27,091 | |
Less: current portion | (5,721) | $ (1,234) |
Operating lease liabilities | $ 21,370 | $ 3,262 |
Income Taxes - Income From Cont
Income Taxes - Income From Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (245) | $ 8,360 | $ 589 |
Foreign | (4,994) | 13,295 | 1,865 |
Income (loss) before income taxes | $ (5,239) | $ 21,655 | $ 2,454 |
Income Taxes - Provision For In
Income Taxes - Provision For Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 2,631 | $ 2,108 | $ 257 |
State | 733 | 310 | 47 |
Foreign | 7,828 | 7,099 | 2,642 |
Total | 11,192 | 9,517 | 2,946 |
Deferred: | |||
Federal | (579) | 117 | 105 |
State | (42) | (17) | (1) |
Foreign | (9,719) | (2,767) | (2,038) |
Deferred income taxes, net | (10,340) | (2,667) | (1,934) |
Income tax expense | $ 852 | $ 6,850 | $ 1,012 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Tax expense (benefit) at U.S. statutory rate | $ (1,100) | $ 4,548 | $ 515 |
State income taxes, net of federal income tax benefit | 546 | 246 | 36 |
Permanent differences | 1,121 | 467 | 2,802 |
Foreign tax rate differential | (886) | 1,536 | 210 |
Transaction costs | (477) | 0 | 0 |
Equity-based compensation | 1,689 | 0 | 0 |
Other | (41) | 53 | (2,551) |
Income tax expense | $ 852 | $ 6,850 | $ 1,012 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Transaction costs | $ 2,129 | $ 466 |
Property and equipment | 439 | 0 |
Accruals and reserves | 4,397 | 1,962 |
Lease liabilities | 7,005 | 894 |
State taxes | 0 | 64 |
Inventory | 1,653 | 0 |
Foreign exchange gains / losses | 92 | 373 |
Net operating loss carryforwards | 0 | 135 |
Subtotal | 15,715 | 3,894 |
Less: Valuation allowance | 0 | (144) |
Total deferred tax assets | 15,715 | 3,750 |
Deferred tax liabilities: | ||
Property and equipment | 0 | (439) |
Intangible assets | (11,557) | (8,378) |
Right-of-use assets | (7,041) | (745) |
Inventory | 0 | (70) |
Other | (37) | (22) |
Total deferred tax liabilities | (18,635) | (9,654) |
Net deferred liabilities | $ (2,920) | $ (5,904) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 0 | $ 144,000 |
Deferred tax assets, gross | 15,715,000 | 3,894,000 |
Deferred tax liabilities, gross | 18,635,000 | 9,654,000 |
Deferred taxes on unremitted earnings | 0 | |
Undistributed earnings | 11,400,000 | |
Net operating loss carryforwards | 0 | $ 135,000 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 0 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 0 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other benefits | $ 11,746 | $ 3,295 |
Accrued freight costs | 9,199 | 5,012 |
Sales tax payable | 20,008 | 5,718 |
Accrued marketing costs | 2,543 | 959 |
Accrued professional services | 1,698 | 281 |
Other accrued liabilities | 8,181 | 2,904 |
Total accrued liabilities | $ 53,375 | $ 18,169 |
Equity-based Compensation - Nar
Equity-based Compensation - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2018shares | |
Transition Agreement | Former Executive | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of retained shares (in shares) | 261,287 | |||
Number of remaining shares (in shares) | 802,634 | |||
Cash consideration | $ | $ 1.1 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Unrecognized compensation cost | $ | $ 8.8 | |||
Weighted average period (in years) | 3 years 10 months 24 days | |||
Time-based incentive units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Unrecognized compensation cost | $ | $ 6.4 | |||
Weighted average period (in years) | 2 years 8 months 12 days | |||
Performance-based incentive units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Return multiple | 3 | |||
2021 Omnibus Incentive Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares reserved for issuance | 4,900,269 | |||
Annual increase of shares authorized for issuance (percent) | 1.00% | |||
Unrecognized compensation cost | $ | $ 1.3 | |||
Weighted average period (in years) | 3 years 8 months 12 days | |||
2021 Employee Stock Purchase Plan | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares reserved for issuance | 1,225,067 | |||
Annual increase of shares authorized for issuance (percent) | 1.00% | |||
Percentage on share price issued | 85.00% | |||
2018 Stock and Incentive Compensation Plan | Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares reserved for issuance | 16,475,735 |
Equity-based Compensation - Sto
Equity-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Options | ||
Outstanding at December 31, 2020 (in shares) | 273,026 | 0 |
Granted (in shares) | 273,026 | |
Vested (in shares) | 0 | |
Forfeited/Repurchased (in shares) | 0 | |
Outstanding at December 31, 2021 (in shares) | 273,026 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 9.50 | |
Vested (in dollars per share) | $ 0 | |
Forfeited/Repurchased (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 9.50 | |
Aggregate Intrinsic Value | $ 0 | $ 0 |
Equity-based Compensation - Sch
Equity-based Compensation - Schedule of Assumptions Used (Details) - Stock options | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate | 1.00% |
Expected volatility | 51.32% |
Expected dividend yield | 0.00% |
Expected term | 6 years 29 days |
Equity-based Compensation - Res
Equity-based Compensation - Restricted Stock Units (Details) - RSUs | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of Shares | |
Restricted stock units balance as of December 31, 2020 (in shares) | shares | 0 |
Granted (in shares) | shares | 942,371 |
Vested (in shares) | shares | 0 |
Forfeited/Repurchased (in shares) | shares | 0 |
Restricted stock units balance as of December 31, 2021 (in shares) | shares | 942,371 |
Weighted Average Grant Date Fair Value | |
Balance as of December 31, 2020 (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 9.99 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited/Repurchased (in dollars per share) | $ / shares | 0 |
Balance as of December 31, 2021 (in dollars per share) | $ / shares | $ 9.99 |
Equity-based Compensation - Inc
Equity-based Compensation - Incentive Units (Details) - Time-based incentive units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Restricted stock units balance as of December 31, 2020 (in shares) | 6,247,626 | 3,403,967 | |
Granted (in shares) | 2,079,417 | 5,507,644 | |
Vested (in shares) | (2,351,230) | (1,200,934) | |
Forfeited/Repurchased (in shares) | 0 | (1,463,051) | |
Restricted stock units balance as of December 31, 2021 (in shares) | 5,975,813 | 6,247,626 | |
Vested (n shares) | 3,357,449 | ||
Weighted Average Grant Date Fair Value | |||
Balance as of December 31, 2020 (in dollars per share) | $ 1.27 | $ 0.48 | |
Granted (in dollars per share) | 0.90 | 1.37 | |
Vested (in dollars per share) | 1.21 | 0.47 | |
Forfeited/Repurchased (in dollars per share) | 0 | 0.45 | |
Balance as of December 31, 2021 (in dollars per share) | 1.16 | 1.27 | |
Weighted Average Participation Threshold | |||
Beginning of the period (in dollars per share) | 1.24 | 1.02 | |
Granted (in dollars per share) | 6.36 | 1.27 | |
Vested (in dollars per share) | 1.22 | 1.02 | |
Forfeited/Repurchased (in dollars per share) | 0 | 1.02 | |
End of the period (in dollars per share) | $ 3.04 | $ 1.24 | |
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value | $ 23,286 | $ 23,688 | $ 2,218 |
Equity-based Compensation - I_2
Equity-based Compensation - Incentive Units Assumptions (Details) - Time-based incentive units | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate | 0.16% | 0.24% | 2.08% |
Expected volatility | 50.00% | 50.00% | 50.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected term | 2 years 10 months 13 days | 3 years 1 month 20 days | 4 years 2 months 15 days |
Equity-based Compensation - Per
Equity-based Compensation - Performance-based Incentive Units (Details) - Performance-based incentive units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Restricted stock units balance as of December 31, 2020 (in shares) | 4,461,764 | 2,322,372 | |
Granted (in shares) | 932,124 | 3,394,379 | |
Vested (in shares) | (5,393,888) | (1,254,987) | |
Forfeited/Repurchased (in shares) | 0 | ||
Restricted stock units balance as of December 31, 2021 (in shares) | 0 | 4,461,764 | |
Vested (n shares) | 5,393,888 | ||
Weighted Average Grant Date Fair Value | |||
Balance as of December 31, 2020 (in dollars per share) | $ 0.91 | $ 0.33 | |
Granted (in dollars per share) | 1.01 | 1.09 | |
Vested (in dollars per share) | 0.93 | 0.30 | |
Forfeited/Repurchased (in dollars per share) | 0 | ||
Balance as of December 31, 2021 (in dollars per share) | 0 | 0.91 | |
Weighted Average Participation Threshold | |||
Beginning of the period (in dollars per share) | 1.19 | 1.02 | |
Granted (in dollars per share) | 6.09 | 1.24 | |
Vested (in dollars per share) | 2.04 | 1.01 | |
Forfeited/Repurchased (in dollars per share) | 0 | ||
End of the period (in dollars per share) | $ 0 | $ 1.19 | |
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value | $ 17,137 | $ 1,534 |
Equity-based Compensation - Equ
Equity-based Compensation - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 8,043 | $ 1,380 | $ 353 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 95 | 0 | 0 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 655 | 0 | 0 |
Time-based incentive units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 2,390 | 1,380 | 353 |
Performance-based incentive units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 4,903 | $ 0 | $ 0 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) | Dec. 31, 2021vote$ / sharesshares | Dec. 31, 2020shares |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 0 |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | |
Common stock, shares authorized (in shares) | shares | 500,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | |
Common stock, number of votes per share | vote | 1 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net income (loss) attributable to a.k.a. Brands Holding Corp. | $ (5,968) | $ 14,334 | $ 1,394 |
Denominator: | |||
Weighted-average common shares outstanding, basic (in shares) | 93,231,377 | 69,846,362 | 61,988,641 |
Dilutive securities: | |||
Weighted-average common shares outstanding, diluted (in shares) | 93,231,377 | 69,846,362 | 61,988,641 |
Net income (loss) per share, basic (in usd per share) | $ (0.06) | $ 0.21 | $ 0.02 |
Net income (loss) per share, diluted (in usd per share) | $ (0.06) | $ 0.21 | $ 0.02 |
Stock options | |||
Dilutive securities: | |||
Dilutive securities (in shares) | 0 | 0 | 0 |
RSUs | |||
Dilutive securities: | |||
Dilutive securities (in shares) | 0 | 0 | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) | Mar. 31, 2021USD ($) |
Subsidiary | Senior Subordinated Notes | Princess Polly | |
Related Party Transaction [Line Items] | |
Face amount | $ 25,000,000 |
Subsequent events (Details)
Subsequent events (Details) $ in Thousands | Jan. 26, 2022USD ($) | Nov. 30, 2021USD ($) | Oct. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2022USD ($) | Jan. 31, 2022squareFeet |
Subsequent Event [Line Items] | ||||||||
Proceeds from line of credit | $ 34,150 | $ 10,889 | $ 0 | |||||
Lease first year annual cash payment | $ 6,689 | |||||||
Revolving credit facility | Line of Credit | New Senior Secured Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from line of credit | $ 12,000 | $ 15,000 | ||||||
Interest rate for borrowings | 3.37% | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Area of leased space | squareFeet | 13,425 | |||||||
Lease first year annual cash payment | $ 1,700 | |||||||
Annual cash payments increased rate (in percent) | 3.00% | |||||||
Subsequent Event | Revolving credit facility | Line of Credit | New Senior Secured Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from line of credit | $ 15,000 | |||||||
Interest rate for borrowings | 3.52% |