DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: Nike takes on subscriptions; Atom bank awarded £10m to support SMEs; and Lootcrate announces bankruptcy.
Nike takes on subscriptions
Nike is stepping into the subscription field, with a new service for kids called Nike Adventure Club.
The launch comes just as the back-to-school season is in full force. There’s momentum in Nike’s kids business, which has grown revenue 11% over the past year on a currency-neutral basis. Aside from Nike, more brands, like Urban Outfitters and American Eagle, are testing subscription models, seeing this as a new source of recurring revenue and a way to amass more loyal customers.
It’s a smart move from Nike, with children under age three needing new shoes three to four times a year, with children ages four to eight needing two to three new pairs a year, and children eight to twelve needing about two pairs a year.
Nike’s first venture into subscription services also offers a glimpse to the future. The company hinted there could be more types of boxes to come, for example one for runners, with people training for marathons sometimes going through a pair of sneakers every three months.
Atom bank awarded £10m to support SMEs
Atom bank, the U.K.’s first bank built exclusively for mobile, has been awarded a £10 million grant to boost lending to SMEs.
Atom will use the grant to help transform banking for small businesses and deliver an additional £3 billion of business financing by March 2024. Atom will also create 70 jobs in the North East of England.
The grant is one of four from Pool C of the £425m Capability and Innovation Fund (CIF), that forms part of a £775 million package administered by Banking Competition Remedies Ltd. Atom, which has already lent in excess of £200m to UK SMEs, will use the funding to address overlooked customer needs, deliver change and innovation and drive economic growth by supporting small businesses.
Atom will launch a suite of Smart Lending products designed specifically with and for SMEs, underpinned by Atom’s unique smart contract technology and machine learning capabilities. The company will also provide the service as a free-to-download and use application, available to all SMEs. Atom will make available an additional £3bn of funding and aims to attract in excess of 340,000 small businesses to its innovative solution by March 2024.
Lootcrate announces bankruptcy
Los Angeles-based subscription box service Loot Crate, which ships curated fan boxes filled with “geek and gamer products” to subscribers each month, has filed for Chapter 11 bankruptcy, and has laid off 50 employees, on top of the 150 workers released as a result of the closure of its Vernon warehouse in July.
Despite the announcement, Loot Crate plans to fulfil its remaining orders, estimated to be worth USD$20m (£16.6m), to its 250,000 subscribers, as well as commencing a sale process for its assets. Money Chest, an investor in Loot Crate, has supplied a bankruptcy loan of USD$10m (£8.3m) to support the firm’s operation during the bankruptcy period.
In a press release announcing the filing, Loot Crate co-founder Christopher Davis stated, “Daily operations will continue as usual, unique and exciting fan items will be purchased, crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing. Our employees will continue to be paid as usual during this transaction.”
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