Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 2270 | |
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 $0.001 per share | |
Trading Symbol | AKA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,627,210 | |
Entity Central Index Key | 0001865107 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 20,742 | $ 46,319 |
Restricted cash | 1,862 | 2,054 |
Accounts receivable | 3,312 | 3,231 |
Inventory, net | 99,950 | 126,533 |
Prepaid income taxes | 10,270 | 6,089 |
Prepaid expenses and other current assets | 18,027 | 13,378 |
Total current assets | 154,163 | 197,604 |
Property and equipment, net | 27,680 | 28,958 |
Operating lease right-of-use assets | 37,270 | 37,317 |
Intangible assets, net | 66,345 | 76,105 |
Goodwill | 91,281 | 167,731 |
Deferred tax assets | 1,009 | 1,070 |
Other assets | 657 | 853 |
Total assets | 378,405 | 509,638 |
Current liabilities: | ||
Accounts payable | 27,480 | 20,903 |
Accrued liabilities | 27,502 | 39,806 |
Sales returns reserve | 7,482 | 3,968 |
Deferred revenue | 10,938 | 11,421 |
Operating lease liabilities, current | 7,046 | 6,643 |
Current portion of long-term debt | 7,700 | 5,600 |
Total current liabilities | 88,148 | 88,341 |
Long-term debt | 98,985 | 138,049 |
Operating lease liabilities | 35,273 | 34,404 |
Other long-term liabilities | 1,540 | 1,483 |
Deferred income taxes | 241 | 284 |
Total liabilities | 224,187 | 262,561 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued or outstanding as of September 30, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock, $0.001 par value; 500,000,000 shares authorized; 10,684,386 and 10,750,586 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively* | 128 | 129 |
Additional paid-in capital | 465,212 | 460,660 |
Accumulated other comprehensive loss | (57,592) | (45,185) |
Accumulated deficit | (253,530) | (168,527) |
Total stockholders’ equity | 154,218 | 247,077 |
Total liabilities and stockholders’ equity | $ 378,405 | $ 509,638 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 10,684,386 | 10,750,586 |
Common stock, shares outstanding (in shares) | 10,684,386 | 10,750,586 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||||
Net sales | $ 140,833,000 | $ 155,822,000 | $ 397,346,000 | $ 462,612,000 | |
Cost of sales | 62,865,000 | 68,965,000 | 173,522,000 | 204,112,000 | |
Gross profit | 77,968,000 | 86,857,000 | 223,824,000 | 258,500,000 | |
Operating expenses: | |||||
Selling | 36,660,000 | 41,450,000 | 106,998,000 | 127,068,000 | |
Marketing | 18,511,000 | 16,532,000 | 51,642,000 | 51,301,000 | |
General and administrative | 24,622,000 | 26,133,000 | 74,681,000 | 76,614,000 | |
Goodwill impairment | 68,524,000 | 0 | 68,524,000 | 0 | |
Total operating expenses | 148,317,000 | 84,115,000 | 301,845,000 | 254,983,000 | |
(Loss) income from operations | (70,349,000) | 2,742,000 | (78,021,000) | 3,517,000 | |
Other expense, net: | |||||
Interest expense | (2,798,000) | (1,835,000) | (8,490,000) | (4,487,000) | |
Other expense | (541,000) | (923,000) | (2,325,000) | (2,035,000) | |
Total other expense, net | (3,339,000) | (2,758,000) | (10,815,000) | (6,522,000) | |
Loss before income taxes | (73,688,000) | (16,000) | (88,836,000) | (3,005,000) | |
Benefit from (provision for) income taxes | 3,278,000 | (98,000) | 3,833,000 | 204,000 | |
Net loss | $ (70,410,000) | $ (114,000) | $ (85,003,000) | $ (2,801,000) | |
Net loss per share: | |||||
Basic (in dollars per share) | [1] | $ (6.58) | $ (0.01) | $ (7.92) | $ (0.26) |
Diluted (in dollars per share) | [1] | $ (6.58) | $ (0.01) | $ (7.92) | $ (0.26) |
Weighted average shares outstanding: | |||||
Basic (in shares) | [1] | 10,695,621 | 10,723,859 | 10,736,628 | 10,721,995 |
Diluted (in shares) | [1] | 10,695,621 | 10,723,859 | 10,736,628 | 10,721,995 |
[1]Adjusted for the one-for-12 Reverse Stock Split. Refer to Note 14, “Stockholders’ Equity.” |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (70,410) | $ (114) | $ (85,003) | $ (2,801) |
Other comprehensive loss: | ||||
Currency translation | (6,552) | (28,263) | (12,407) | (52,889) |
Total comprehensive loss | $ (76,962) | $ (28,377) | $ (97,410) | $ (55,690) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit, Retained Earning | ||
Beginning balance (in shares) at Dec. 31, 2021 | [1] | 10,720,653 | |||||
Beginning balance at Dec. 31, 2021 | $ 451,026 | $ 129 | $ 453,807 | $ (11,080) | $ 8,170 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,368 | 1,368 | |||||
Cumulative translation adjustment | 14,405 | 14,405 | |||||
Net (loss) income | 1,525 | 1,525 | |||||
Ending balance (in shares) at Mar. 31, 2022 | [1] | 10,720,653 | |||||
Ending balance at Mar. 31, 2022 | 468,324 | $ 129 | 455,175 | 3,325 | 9,695 | ||
Beginning balance (in shares) at Dec. 31, 2021 | [1] | 10,720,653 | |||||
Beginning balance at Dec. 31, 2021 | 451,026 | $ 129 | 453,807 | (11,080) | 8,170 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative translation adjustment | (52,889) | ||||||
Net (loss) income | (2,801) | ||||||
Ending balance (in shares) at Sep. 30, 2022 | [1] | 10,734,566 | |||||
Ending balance at Sep. 30, 2022 | 399,699 | $ 129 | 458,170 | (63,969) | 5,369 | ||
Beginning balance (in shares) at Mar. 31, 2022 | [1] | 10,720,653 | |||||
Beginning balance at Mar. 31, 2022 | 468,324 | $ 129 | 455,175 | 3,325 | 9,695 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,494 | 1,494 | |||||
Issuance of common stock under employee equity plans, net of shares withheld (in shares) | [1] | 1,779 | |||||
Issuance of common stock under employee equity plans, net of shares withheld | (32) | (32) | |||||
Cumulative translation adjustment | (39,031) | (39,031) | |||||
Net (loss) income | (4,212) | (4,212) | |||||
Ending balance (in shares) at Jun. 30, 2022 | [1] | 10,722,432 | |||||
Ending balance at Jun. 30, 2022 | 426,543 | $ 129 | 456,637 | (35,706) | 5,483 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,586 | 1,586 | |||||
Issuance of common stock under employee equity plans, net of shares withheld (in shares) | [1] | 12,134 | |||||
Issuance of common stock under employee equity plans, net of shares withheld | (53) | (53) | |||||
Cumulative translation adjustment | (28,263) | (28,263) | |||||
Net (loss) income | (114) | (114) | |||||
Ending balance (in shares) at Sep. 30, 2022 | [1] | 10,734,566 | |||||
Ending balance at Sep. 30, 2022 | $ 399,699 | $ 129 | 458,170 | (63,969) | 5,369 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 10,750,586 | 10,750,586 | [1] | ||||
Beginning balance at Dec. 31, 2022 | $ 247,077 | $ 129 | 460,660 | (45,185) | (168,527) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,936 | 1,936 | |||||
Issuance of common stock under employee equity plans, net of shares withheld (in shares) | [1] | 6,882 | |||||
Issuance of common stock under employee equity plans, net of shares withheld | (43) | (43) | |||||
Cumulative translation adjustment | (3,925) | (3,925) | |||||
Net (loss) income | (9,553) | (9,553) | |||||
Ending balance (in shares) at Mar. 31, 2023 | [1] | 10,757,468 | |||||
Ending balance at Mar. 31, 2023 | $ 235,492 | $ 129 | 462,553 | (49,110) | (178,080) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 10,750,586 | 10,750,586 | [1] | ||||
Beginning balance at Dec. 31, 2022 | $ 247,077 | $ 129 | 460,660 | (45,185) | (168,527) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Repurchase of shares (in shares) | (162,716) | ||||||
Repurchase of shares | $ (900) | ||||||
Cumulative translation adjustment | (12,407) | ||||||
Net (loss) income | $ (85,003) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 10,684,386 | 10,684,386 | [1] | ||||
Ending balance at Sep. 30, 2023 | $ 154,218 | $ 128 | 465,212 | (57,592) | (253,530) | ||
Beginning balance (in shares) at Mar. 31, 2023 | [1] | 10,757,468 | |||||
Beginning balance at Mar. 31, 2023 | 235,492 | $ 129 | 462,553 | (49,110) | (178,080) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,824 | 1,824 | |||||
Issuance of common stock under employee equity plans, net of shares withheld (in shares) | [1] | 42,117 | |||||
Issuance of common stock under employee equity plans, net of shares withheld | 66 | 66 | |||||
Repurchase of shares (in shares) | [1] | (56,153) | |||||
Repurchase of shares | (299) | (299) | |||||
Cumulative translation adjustment | (1,930) | (1,930) | |||||
Net (loss) income | (5,040) | (5,040) | |||||
Ending balance (in shares) at Jun. 30, 2023 | [1] | 10,743,432 | |||||
Ending balance at Jun. 30, 2023 | 230,113 | $ 129 | 464,144 | (51,040) | (183,120) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation | 1,719 | 1,719 | |||||
Issuance of common stock under employee equity plans, net of shares withheld (in shares) | [1] | 13,802 | |||||
Issuance of common stock under employee equity plans, net of shares withheld | $ (40) | (40) | |||||
Repurchase of shares (in shares) | (106,566) | (72,848) | [1] | ||||
Repurchase of shares | $ (612) | $ (1) | (611) | ||||
Cumulative translation adjustment | (6,552) | (6,552) | |||||
Net (loss) income | $ (70,410) | (70,410) | |||||
Ending balance (in shares) at Sep. 30, 2023 | 10,684,386 | 10,684,386 | [1] | ||||
Ending balance at Sep. 30, 2023 | $ 154,218 | $ 128 | $ 465,212 | $ (57,592) | $ (253,530) | ||
[1]Adjusted for the one-for-12 Reverse Stock Split. Refer to Note 14, “Stockholders’ Equity.” |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (85,003,000) | $ (2,801,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation expense | 5,912,000 | 4,121,000 |
Amortization expense | 8,782,000 | 11,252,000 |
Amortization of inventory fair value adjustment | 0 | 707,000 |
Amortization of debt issuance costs | 470,000 | 487,000 |
Lease incentives | 1,499,000 | 1,384,000 |
Loss on disposal of businesses | 1,533,000 | 0 |
Non-cash operating lease expense | 5,786,000 | 7,211,000 |
Equity-based compensation | 5,478,000 | 4,448,000 |
Deferred income taxes, net | 3,000 | (2,343,000) |
Goodwill impairment | 68,524,000 | 0 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | 111,000 | (1,339,000) |
Inventory | 20,428,000 | (31,067,000) |
Prepaid expenses and other current assets | (5,448,000) | 2,965,000 |
Accounts payable | 7,495,000 | 9,430,000 |
Income taxes payable | (4,528,000) | (6,987,000) |
Accrued liabilities | (10,912,000) | 641,000 |
Returns reserve | 3,714,000 | (415,000) |
Deferred revenue | (4,000) | (3,294,000) |
Lease liabilities | (5,798,000) | (5,817,000) |
Net cash provided by (used in) operating activities | 18,042,000 | (11,417,000) |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | 0 | (2,095,000) |
Purchases of intangible assets | (59,000) | (164,000) |
Purchases of property and equipment | (5,462,000) | (13,946,000) |
Net cash used in investing activities | (5,521,000) | (16,205,000) |
Cash flows from financing activities: | ||
Payments of costs related to initial public offering | 0 | (1,142,000) |
Proceeds from line of credit, net of issuance costs | 0 | 25,000,000 |
Repayment of line of credit | (33,100,000) | 0 |
Proceeds from issuance of debt, net of issuance costs | 0 | (121,000) |
Repayment of debt | (4,200,000) | (4,200,000) |
Taxes paid related to net share settlement of equity awards | (107,000) | (84,000) |
Proceeds from issuances under equity-based compensation plans | 90,000 | 0 |
Repurchase of shares | (910,000) | 0 |
Net cash (used in) provided by financing activities | (38,227,000) | 19,453,000 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (63,000) | 211,000 |
Net decrease in cash, cash equivalents and restricted cash | (25,769,000) | (7,958,000) |
Cash, cash equivalents and restricted cash at beginning of period | 48,373,000 | 41,018,000 |
Cash, cash equivalents and restricted cash at end of period | 22,604,000 | 33,060,000 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 20,742,000 | 31,114,000 |
Restricted cash | 1,862,000 | 1,946,000 |
Total cash, cash equivalents and restricted cash | $ 22,604,000 | $ 33,060,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) | Sep. 29, 2023 | Sep. 30, 2021 |
Income Statement [Abstract] | ||
Reverse stock split | 0.0833 | 0.0833 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) | Sep. 29, 2023 | Sep. 30, 2021 |
Statement of Stockholders' Equity [Abstract] | ||
Reverse stock split | 0.0833 | 0.0833 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and 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 principally 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. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation and Basis of Presentation The Company’s unaudited condensed consolidated interim financial statements have been prepared in accordance with Article 10 of the SEC’s Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States (“GAAP”) can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2022 which are included in the 2022 Form 10-K. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023 or for any other interim period or for any other future year. The accompanying condensed consolidated financial statements include the balances of the Company and all of its wholly-owned subsidiaries. All intercompany transactions and balances 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. 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 its 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. At the time of sale, we establish a reserve for merchandise returns, based on historical experience, merchandise mix and expected future returns, which is recorded as a reduction of sales. Accordingly, cost of sales is also reduced and an offsetting asset is recorded within prepaid expenses and other current assets for expected merchandise to be returned. 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 $7.5 million and $4.0 million as of September 30, 2023 and December 31, 2022, respectively. The following table presents a summary of the Company’s sales return reserve: Balance as of December 31, 2021 $ 6,887 Returns (101,716) Allowance 98,797 Balance as of December 31, 2022 3,968 Returns (74,306) Allowance 77,820 Balance as of September 30, 2023 $ 7,482 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. The portion of gift cards and online credits not expected to be redeemed are recognized as revenue based on a pattern of historical redemptions, which are substantially within twenty-four months from the date of issuance. Revenue recognized in net sales on breakage of gift cards and online credit for both the three months ended September 30, 2023 and 2022 was $0.4 million and immaterial, respectively. Revenue recognized in net sales on breakage of gift cards and online credit for the nine months ended September 30, 2023 and 2022 was $1.0 million and $0.1 million, respectively. The following table presents the disaggregation of the Company’s net sales by geography, based on customer address: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 U.S. $ 83,846 $ 82,172 $ 236,439 $ 242,117 Australia/New Zealand 50,022 67,038 139,505 196,638 Rest of world 6,965 6,612 21,402 23,857 Total $ 140,833 $ 155,822 $ 397,346 $ 462,612 Segment Information Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Company’s Chief Executive Officer, its Chief Operating Decision Maker, in deciding how to allocate resources and in assessing performance. The Company has determined that its four 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. |
Disposals
Disposals | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposals | Disposals Rebdolls In March 2023, the Company completed the sale of its Rebdolls reporting unit back to its founder. Upon close of the transaction, the Company recorded a pre-tax loss of $1.0 million in other expense, net in its condensed consolidated statements of income in the first quarter of fiscal year 2023. As part of the sale, the Company retained an 18% ownership in Rebdolls, but retained no further rights related to Rebdolls. Such investment was determined to have no value, as recovery of any amount was deemed remote. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2023 | |
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: September 30, December 31, Security deposits $ 624 $ 2,945 Inventory prepayments 8,070 3,067 Other 9,333 7,366 Total prepaid expenses and other current assets $ 18,027 $ 13,378 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, and Equipment, Net | Property and Equipment, Net Property and equipment, net is comprised of the following: September 30, December 31, Furniture and fixtures $ 2,372 $ 2,367 Machinery and equipment 5,772 5,188 Computer equipment and capitalized software 6,914 6,015 Leasehold improvements 26,824 24,816 Total property and equipment 41,882 38,386 Less: accumulated depreciation (14,202) (9,428) Total property and equipment, net $ 27,680 $ 28,958 Total depreciation expense was $1.7 million and $1.4 million for the three months ended September 30, 2023 and 2022, respectively, and was $5.9 million and $4.1 million for the nine months ended September 30, 2023 and 2022, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The carrying value of goodwill, as of September 30, 2023 and December 31, 2022, was $91.3 million and $167.7 million, respectively. In August 2023, due to a continued worsening in global economic trends, elevated interest rates and unfavorable demand in Australia, the Company reduced its forecasts and expectations for the Culture Kings and Petal & Pup reporting units. This reduction was identified as a triggering event and a subsequent quantitative test concluded that the carrying value of the Culture Kings and Petal & Pup reporting units exceeded their fair values as of August 31, 2023. As a result, the Company recorded a non-cash goodwill impairment charge of $68.5 million during the third quarter of 2023. As of September 30, 2023, $10.6 million of goodwill related to Petal & Pup remained, while the goodwill related to Culture Kings was fully impaired. Additionally, as of the testing date, the estimated fair value of the mnml reporting unit exceeded the carrying value by 1.4% and the carrying value of the related goodwill was $30.0 million. Holding all other assumptions used in the fair value measurement of the mnml reporting unit constant, a 2% increase in the selected discount rate would result in impairment. No goodwill impairment was recorded during the nine months ended September 30, 2022. 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, 2022 $ 167,731 Impairment (68,524) Changes in foreign currency translation (7,926) Balance as of September 30, 2023 $ 91,281 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022, included in intangible assets, net in the accompanying condensed consolidated balance sheets, are as follows: September 30, 2023 December 31, 2022 Useful life Weighted Average Amortization Period 2023 2023 Weighted Average Amortization Period 2022 2022 Customer relationships 4 years 1.4 years $ 20,805 2.0 years $ 21,703 Brands 10 years 7.2 years 82,475 7.9 years 84,278 Trademarks 5 years 1.5 years 101 2.3 years 107 Total intangible assets 103,381 106,088 Less: accumulated amortization (37,036) (29,983) Total intangible assets, net $ 66,345 $ 76,105 Amortization of acquired intangible assets with finite useful lives is included in general and administrative expenses and was $2.9 million and $3.2 million for the three months ended September 30, 2023 and 2022, respectively, and was $8.8 million and $11.3 million for the nine months ended September 30, 2023 and 2022, respectively. Future estimated amortization expense for acquired identifiable intangible assets is as follows: Amortization Expense Year ending December 31: Remainder of 2023 $ 2,560 2024 10,101 2025 9,392 2026 8,650 2027 8,247 Thereafter 27,395 Total amortization expense $ 66,345 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Secured Credit Facility On September 24, 2021, in connection with the closing of the Company’s initial public offering (“IPO”), certain subsidiaries of the Company entered into a senior secured credit facility comprised 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. The senior secured credit facility also allows for the issuance of one or more letters of credit from time to time by syndicate lenders. Effective April 4, 2023, the Company modified its senior secured credit facility under existing contractual provisions to yield interest based on Term SOFR interest rates. Key terms and conditions of each facility were as follows as of September 30, 2023: • 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 Term SOFR plus an applicable margin dependent upon our net leverage ratio, as defined by the credit agreement. The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of Term SOFR plus 3.25%. • The $50.0 million revolving line of credit, which matures five years after closing, accrues interest at Term SOFR 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 Term SOFR 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 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 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 ending 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 September 30, 2023, the Company was in compliance with all debt covenants. During the nine months ended September 30, 2023, the Company voluntarily repaid $33.1 million of the outstanding amount owed under its revolving line of credit. As of September 30, 2023, the all-in rate (Term SOFR plus the applicable margin) for the Company’s term loan and borrowings under the revolving line of credit was 8.68%. Total Debt and Interest Outstanding debt consisted of the following: September 30, December 31, Term loan $ 100,950 $ 105,150 Revolving credit facility 6,900 40,000 Capitalized debt issuance costs (1,165) (1,501) Total debt 106,685 143,649 Less: current portion (7,700) (5,600) Total long-term debt $ 98,985 $ 138,049 Interest expense, which included the amortization of debt issuance costs, totaled $2.8 million and $1.8 million for the three months ended September 30, 2023 and 2022, respectively, and $8.5 million and $4.5 million for the nine months ended September 30, 2023 and 2022, respectively. Additionally, as of September 30, 2023, the Company had $1.3 million of outstanding letters of credit. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases office locations, warehouse facilities and stores under various non-cancellable operating lease agreements. The Company’s leases have remaining lease terms of approximately 1 year 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 from the lease terms any extension options that are not reasonably certain to be exercised, 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 condensed 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: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease costs $ 2,557 $ 2,180 $ 7,467 $ 6,691 Variable lease costs 246 145 640 463 Short-term lease costs 97 91 284 312 Total lease costs $ 2,900 $ 2,416 $ 8,391 $ 7,466 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: Nine Months Ended September 30, 2023 2022 Cash paid for operating lease liabilities $ 5,990 $ 4,145 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 7,240 21,987 Other information relating to the Company’s operating leases was as follows: September 30, December 31, Weighted-average remaining lease term 6.7 years 7.4 years Weighted-average discount rate 5.0% 4.3% As of September 30, 2023, the maturities of operating lease liabilities were as follows: Remainder of 2023 $ 2,309 2024 8,829 2025 8,267 2026 6,936 2027 5,665 Thereafter 17,963 Total remaining lease payments 49,969 Less: imputed interest 7,650 Total operating lease liabilities 42,319 Less: current portion (7,046) Long-term operating lease liabilities $ 35,273 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which the Company makes such determinations. 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. The following table summarizes our effective tax rate for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Loss before income taxes $ (73,688) $ (16) $ (88,836) $ (3,005) Benefit from (provision for) income taxes 3,278 (98) 3,833 204 Effective tax rate (4.4)% 612.5% (4.3)% (6.8)% For the three and nine months ended September 30, 2023, the Company’s benefits from income tax were primarily due to the net loss before income taxes. When compared to the U.S. federal statutory rate of 21.0%, the lower effective tax rates for the three and nine months ended September 30, 2023 were primarily due to non-deductible permanent differences, including the goodwill impairment recorded related to the Culture Kings and Petal & Pup reporting units. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: September 30, December 31, Accrued salaries and other benefits $ 8,617 $ 10,569 Accrued freight costs 4,175 5,064 Sales tax payable 4,614 15,999 Accrued marketing costs 3,412 2,566 Accrued professional services 1,718 2,509 Other accrued liabilities 4,966 3,099 Total accrued liabilities $ 27,502 $ 39,806 |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consisted of the following: September 30, December 31, Gift cards $ 10,570 $ 10,829 Other 368 592 Total deferred revenue $ 10,938 $ 11,421 |
Equity-based Compensation
Equity-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
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 408,355 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split, 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 automatically increases on January 1 of each year 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. On May 30, 2023, the Company’s shareholders approved an amendment to the 2021 Omnibus Plan to increase the number of shares available for issuance under the 2021 Plan by 833,333 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split. As of September 30, 2023 , there were 1,456,396 shares reserved for issuance of awards under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split. 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. A total of 102,088 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split, were initially reserved for issuance under the ESPP. The number of shares reserved and available for issuance under the ESPP automatically increases on January 1 of each year 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. As of September 30, 2023 , there were 316,797 shares reserved for issuance of awards under the ESPP, as adjusted for the one-for-12 Reverse Stock Split. The offering periods of the ESPP are 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. The fair value of the discount and the look-back period will be estimated using the Black-Scholes option pricing model. 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. 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. 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 a 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 have a contractual term, the period during which they are exercisable, not to exceed ten years from the date of grant, and generally vest over time, based on performance or based on the achievement of a market condition. In September 2023, an award, including 416,667 stock options (the “Bryett Award”), was issued to Wesley Bryett, a member of the Company’s board of directors, co-founder of Princess Polly and the Global CEO of Culture Kings. This award expires after ten years, or upon the termination of Mr. Bryett, and includes four tranches of stock options that will vest and become exercisable based upon the achievement of various common stock price targets. The weighted average exercise price for the options in the Bryett Award is $109.27. Each tranche of stock options has a different derived service period, the average of which is approximately 5.5 years. As of September 30, 2023, no options issued as part of the Bryett Award had vested, the options held no intrinsic value, and total unrecognized compensation cost related to the Bryett Award was $1.2 million which is expected to be recognized over 5.4 years. A summary of the Company's time-based stock option activity under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split, was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance as of December 31, 2022 42,288 $ 83.36 9.04 $ — Granted — — Exercised — — Forfeited/Repurchased (2,467) 114.00 Balance as of September 30, 2023 39,821 $ 81.47 8.31 $ — Vested as of September 30, 2023 19,608 $ 83.58 8.29 $ — As of September 30, 2023, there was $0.9 million of total unrecognized compensation cost related to unvested time-based stock options issued under the 2021 Plan, which is expected to be recognized over a weighted-average period of 1.8 years. Restricted Stock Units The 2021 Plan provides for the issuance of restricted stock units (“RSUs”). RSUs issued prior to March 31, 2022 vest over four years while all RSUs issued after that date vest over three years. A summary of the Company's RSU activity under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split, was as follows: Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2022 367,512 $ 32.81 Granted 33,764 4.91 Vested (54,335) 51.50 Forfeited/Repurchased (37,095) 36.68 Balance as of September 30, 2023 309,846 $ 26.04 As of September 30, 2023, there was $6.9 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 1.9 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 vested upon the satisfaction of the performance 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, 2022 3,363,856 $ 1.43 $ 18.64 $ — Granted — — — Vested (1,499,521) 1.36 17.65 Forfeited/Repurchased (16,150) 3.19 22.68 Balance as of September 30, 2023 1,848,185 $ 1.47 $ 19.42 $ — Vested as of September 30, 2023 7,373,102 As of September 30, 2023, there was $2.3 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 1.1 years. ESPP Purchase Rights A six-month offering period for the ESPP ended on May 31, 2023. There were 21,892 shares purchased using ESPP purchase rights with a weighted average purchase price of $4.11. Equity-Based Compensation Expense The Company recognizes compensation expense in general and administrative expenses within operating expenses in the condensed consolidated statements of income for stock options, RSUs, ESPP purchase rights 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 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: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock options $ 142 $ 146 $ 390 $ 359 RSUs 923 682 2,939 1,865 ESPP purchase rights 3 110 129 110 Time-based incentive units 650 648 2,020 2,114 Total $ 1,718 $ 1,586 $ 5,478 $ 4,448 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2023 | |
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 . There were no shares of preferred stock issued and outstanding as of September 30, 2023 . 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. On September 29, 2023, the Company effected a one-for-12 reverse stock split of our common stock (the “Reverse Stock Split”). No fractional shares were issued in connection with the Reverse Stock Split and all holders of such fractional interests received cash equal to such fraction multiplied by the average of the closing sales prices of the Company’s common stock during the regular trading hours for the five consecutive trading days immediately preceding the effective date of the Reverse Stock Split, with such average closing sales prices being adjusted to give effect to the Reverse Stock Split. All references in this Quarterly Report on Form 10-Q to the Company’s outstanding common stock, including per share information, have been retrospectively adjusted to reflect this Reverse Stock Split. Share Repurchase Program On May 25, 2023, the Company's board of directors approved a share repurchase program (the “Share Repurchase Program”). Pursuant to the Share Repurchase Program, the Company is authorized to repurchase up to $2.0 million of shares of the Company’s common stock. The timing of any repurchases by the Company and the actual number of shares repurchased are subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time through a Rule 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. The Share Repurchase Program may be suspended or discontinued at any time and has no expiration date. During the three months ended September 30, 2023, the Company repurchased 106,566 shares of its common stock for $0.6 million, at an average price of $5.97 per share, of which 33,718 shares were held and not retired as of September 30, 2023. During the nine months ended September 30, 2023, the Company repurchased 162,716 shares of its common stock for $0.9 million, at an average price of $5.83 per share. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
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 loss per share and a reconciliation of the weighted average number of shares outstanding: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss $ (70,410) $ (114) $ (85,003) $ (2,801) Denominator: Weighted-average common shares outstanding, basic and diluted 10,695,621 10,723,859 10,736,628 10,721,995 Net loss per share: Net loss per share, basic and diluted $ (6.58) $ (0.01) $ (7.92) $ (0.26) Basic net income (loss) per share is calculated by dividing net income (loss) 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, as well as ESPP purchase rights, outstanding during the period, if applicable. Due to the net loss for all periods shown, no potentially dilutive securities had an impact on diluted loss per share for any period. For the three months ended September 30, 2023 and 2022, respectively, 332,873 and 151,536 shares were excluded from the calculation of weighted-average diluted common shares outstanding as they had an anti-dilutive effect. For the nine months ended September 30, 2023 and 2022, respectively, 358,863 and 105,890 shares were excluded from the calculation of weighted-average diluted common shares outstanding as they had an anti-dilutive effect. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
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 the Company 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events occurring through November 8, 2023, the date that these financial statements were originally available to be issued, and determined the following subsequent event occurred that would require disclosure in these financial statements. Draw on Revolving Line of Credit On October 19, 2023, the Company borrowed $5.5 million under the revolving line of credit, which is part of the Company’s senior secured credit facility. The initial applicable interest rate for the borrowings is 8.70% and final payoff is due on September 24, 2026. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (70,410) | $ (114) | $ (85,003) | $ (2,801) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of ConsolidationAll intercompany transactions and balances have been eliminated in consolidation. |
Basis of Presentation | Basis of PresentationThe Company’s unaudited condensed consolidated interim financial statements have been prepared in accordance with Article 10 of the SEC’s Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States (“GAAP”) can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2022 which are included in the 2022 Form 10-K. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023 or for any other interim period or for any other future year. The accompanying condensed consolidated financial statements include the balances of the Company and all of 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. |
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 its 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. |
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 Company’s Chief Executive Officer, its Chief Operating Decision Maker, in deciding how to allocate resources and in assessing performance. The Company has determined that its four 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. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Sales Return Reserve | The following table presents a summary of the Company’s sales return reserve: Balance as of December 31, 2021 $ 6,887 Returns (101,716) Allowance 98,797 Balance as of December 31, 2022 3,968 Returns (74,306) Allowance 77,820 Balance as of September 30, 2023 $ 7,482 Deferred revenue consisted of the following: September 30, December 31, Gift cards $ 10,570 $ 10,829 Other 368 592 Total deferred revenue $ 10,938 $ 11,421 |
Schedule of Disaggregation of Revenue | The following table presents the disaggregation of the Company’s net sales by geography, based on customer address: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 U.S. $ 83,846 $ 82,172 $ 236,439 $ 242,117 Australia/New Zealand 50,022 67,038 139,505 196,638 Rest of world 6,965 6,612 21,402 23,857 Total $ 140,833 $ 155,822 $ 397,346 $ 462,612 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: September 30, December 31, Security deposits $ 624 $ 2,945 Inventory prepayments 8,070 3,067 Other 9,333 7,366 Total prepaid expenses and other current assets $ 18,027 $ 13,378 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, and Equipment, Net | Property and equipment, net is comprised of the following: September 30, December 31, Furniture and fixtures $ 2,372 $ 2,367 Machinery and equipment 5,772 5,188 Computer equipment and capitalized software 6,914 6,015 Leasehold improvements 26,824 24,816 Total property and equipment 41,882 38,386 Less: accumulated depreciation (14,202) (9,428) Total property and equipment, net $ 27,680 $ 28,958 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes goodwill activity: Balance as of December 31, 2022 $ 167,731 Impairment (68,524) Changes in foreign currency translation (7,926) Balance as of September 30, 2023 $ 91,281 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets | The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of September 30, 2023 and December 31, 2022, included in intangible assets, net in the accompanying condensed consolidated balance sheets, are as follows: September 30, 2023 December 31, 2022 Useful life Weighted Average Amortization Period 2023 2023 Weighted Average Amortization Period 2022 2022 Customer relationships 4 years 1.4 years $ 20,805 2.0 years $ 21,703 Brands 10 years 7.2 years 82,475 7.9 years 84,278 Trademarks 5 years 1.5 years 101 2.3 years 107 Total intangible assets 103,381 106,088 Less: accumulated amortization (37,036) (29,983) Total intangible assets, net $ 66,345 $ 76,105 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future estimated amortization expense for acquired identifiable intangible assets is as follows: Amortization Expense Year ending December 31: Remainder of 2023 $ 2,560 2024 10,101 2025 9,392 2026 8,650 2027 8,247 Thereafter 27,395 Total amortization expense $ 66,345 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | Outstanding debt consisted of the following: September 30, December 31, Term loan $ 100,950 $ 105,150 Revolving credit facility 6,900 40,000 Capitalized debt issuance costs (1,165) (1,501) Total debt 106,685 143,649 Less: current portion (7,700) (5,600) Total long-term debt $ 98,985 $ 138,049 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Cost | The Company’s operating lease costs were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease costs $ 2,557 $ 2,180 $ 7,467 $ 6,691 Variable lease costs 246 145 640 463 Short-term lease costs 97 91 284 312 Total lease costs $ 2,900 $ 2,416 $ 8,391 $ 7,466 |
Schedule of Supplemental Information Related to Operating Leases | Supplemental cash flow information relating to the Company’s operating leases was as follows: Nine Months Ended September 30, 2023 2022 Cash paid for operating lease liabilities $ 5,990 $ 4,145 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 7,240 21,987 Other information relating to the Company’s operating leases was as follows: September 30, December 31, Weighted-average remaining lease term 6.7 years 7.4 years Weighted-average discount rate 5.0% 4.3% |
Schedule of Operating Lease Maturity | As of September 30, 2023, the maturities of operating lease liabilities were as follows: Remainder of 2023 $ 2,309 2024 8,829 2025 8,267 2026 6,936 2027 5,665 Thereafter 17,963 Total remaining lease payments 49,969 Less: imputed interest 7,650 Total operating lease liabilities 42,319 Less: current portion (7,046) Long-term operating lease liabilities $ 35,273 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax | The following table summarizes our effective tax rate for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Loss before income taxes $ (73,688) $ (16) $ (88,836) $ (3,005) Benefit from (provision for) income taxes 3,278 (98) 3,833 204 Effective tax rate (4.4)% 612.5% (4.3)% (6.8)% |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: September 30, December 31, Accrued salaries and other benefits $ 8,617 $ 10,569 Accrued freight costs 4,175 5,064 Sales tax payable 4,614 15,999 Accrued marketing costs 3,412 2,566 Accrued professional services 1,718 2,509 Other accrued liabilities 4,966 3,099 Total accrued liabilities $ 27,502 $ 39,806 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue | The following table presents a summary of the Company’s sales return reserve: Balance as of December 31, 2021 $ 6,887 Returns (101,716) Allowance 98,797 Balance as of December 31, 2022 3,968 Returns (74,306) Allowance 77,820 Balance as of September 30, 2023 $ 7,482 Deferred revenue consisted of the following: September 30, December 31, Gift cards $ 10,570 $ 10,829 Other 368 592 Total deferred revenue $ 10,938 $ 11,421 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Payment Arrangement, Option, Activity | A summary of the Company's time-based stock option activity under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split, was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance as of December 31, 2022 42,288 $ 83.36 9.04 $ — Granted — — Exercised — — Forfeited/Repurchased (2,467) 114.00 Balance as of September 30, 2023 39,821 $ 81.47 8.31 $ — Vested as of September 30, 2023 19,608 $ 83.58 8.29 $ — |
Schedule of Share-Based Payment Arrangement, Restricted Stock Unit, Activity | A summary of the Company's RSU activity under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split, was as follows: Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2022 367,512 $ 32.81 Granted 33,764 4.91 Vested (54,335) 51.50 Forfeited/Repurchased (37,095) 36.68 Balance as of September 30, 2023 309,846 $ 26.04 |
Schedule of Share-Based Payment Arrangement, Outstanding Award, Activity, Excluding Option | 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, 2022 3,363,856 $ 1.43 $ 18.64 $ — Granted — — — Vested (1,499,521) 1.36 17.65 Forfeited/Repurchased (16,150) 3.19 22.68 Balance as of September 30, 2023 1,848,185 $ 1.47 $ 19.42 $ — Vested as of September 30, 2023 7,373,102 |
Schedule of 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: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock options $ 142 $ 146 $ 390 $ 359 RSUs 923 682 2,939 1,865 ESPP purchase rights 3 110 129 110 Time-based incentive units 650 648 2,020 2,114 Total $ 1,718 $ 1,586 $ 5,478 $ 4,448 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share and a reconciliation of the weighted average number of shares outstanding: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss $ (70,410) $ (114) $ (85,003) $ (2,801) Denominator: Weighted-average common shares outstanding, basic and diluted 10,695,621 10,723,859 10,736,628 10,721,995 Net loss per share: Net loss per share, basic and diluted $ (6.58) $ (0.01) $ (7.92) $ (0.26) |
Significant Accounting Polici_4
Significant Accounting Policies - Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||||
Sales returns reserve | $ 7,482 | $ 7,482 | $ 3,968 | $ 6,887 | ||
Breakage Of Online Credit And Gift Cards | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue recognized | $ 400 | $ 0 | $ 1,000 | $ 100 | ||
Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Refund period | 30 days | |||||
Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Refund period | 45 days |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule Of Sales Return Reserve (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Sales Return Reserve | ||
Balance beginning period | $ 3,968 | $ 6,887 |
Returns | (74,306) | (101,716) |
Allowance | 77,820 | 98,797 |
Balance ending period | $ 7,482 | $ 3,968 |
Significant Accounting Polici_6
Significant Accounting Policies - Revenue Disaggregation Schedule (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 140,833 | $ 155,822 | $ 397,346 | $ 462,612 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 83,846 | 82,172 | 236,439 | 242,117 |
Australia/New Zealand | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 50,022 | 67,038 | 139,505 | 196,638 |
Rest of world | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 6,965 | $ 6,612 | $ 21,402 | $ 23,857 |
Significant Accounting Polici_7
Significant Accounting Policies - Segment Information (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 4 |
Number of reportable segments | 1 |
Disposals (Details)
Disposals (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
IncomeStatementBalanceSheetAndAdditionalDisclosuresByDisposalGroupsIncludingDiscontinuedOperations [Line Items] | |||
Loss on disposal of businesses | $ 1,533 | $ 0 | |
Rebdoll | |||
IncomeStatementBalanceSheetAndAdditionalDisclosuresByDisposalGroupsIncludingDiscontinuedOperations [Line Items] | |||
Ownership percentage | 18% | ||
Rebdoll | Discontinued Operations, Held-for-sale | |||
IncomeStatementBalanceSheetAndAdditionalDisclosuresByDisposalGroupsIncludingDiscontinuedOperations [Line Items] | |||
Loss on disposal of businesses | $ 1,000 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid, and Other Assets Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Security deposits | $ 624 | $ 2,945 |
Inventory prepayments | 8,070 | 3,067 |
Other | 9,333 | 7,366 |
Total prepaid expenses and other current assets | $ 18,027 | $ 13,378 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property, and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | $ 41,882 | $ 41,882 | $ 38,386 | ||
Less: accumulated depreciation | (14,202) | (14,202) | (9,428) | ||
Total property and equipment, net | 27,680 | 27,680 | 28,958 | ||
Depreciation and amortization expense | 1,700 | $ 1,400 | 5,900 | $ 4,100 | |
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | 2,372 | 2,372 | 2,367 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | 5,772 | 5,772 | 5,188 | ||
Computer equipment and capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | 6,914 | 6,914 | 6,015 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment | $ 26,824 | $ 26,824 | $ 24,816 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Line Items] | ||||
Goodwill | $ 91,281,000 | $ 91,281,000 | ||
Goodwill impairment | 68,524,000 | $ 0 | 68,524,000 | $ 0 |
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 167,731,000 | |||
Goodwill, Impairment Loss | (68,524,000) | $ 0 | (68,524,000) | $ 0 |
Changes in foreign currency translation | (7,926,000) | |||
Goodwill, ending balance | 91,281,000 | 91,281,000 | ||
Third Estate LLC (mnml) | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 30,000,000 | $ 30,000,000 | ||
Estimated fair value carrying amount exceeded percentage | 1.40% | 1.40% | ||
Goodwill impairment, percentage of increase discount rate that would result in impairment | 2% | |||
Goodwill [Roll Forward] | ||||
Goodwill, ending balance | $ 30,000,000 | $ 30,000,000 | ||
P&P Holdings, LP | ||||
Goodwill [Line Items] | ||||
Goodwill | 10,600,000 | 10,600,000 | ||
Goodwill [Roll Forward] | ||||
Goodwill, ending balance | $ 10,600,000 | $ 10,600,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 103,381 | $ 106,088 |
Less: accumulated amortization | (37,036) | (29,983) |
Total intangible assets, net | $ 66,345 | $ 76,105 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | |
Weighted Average Amortization Period | 1 year 4 months 24 days | 2 years |
Total intangible assets | $ 20,805 | $ 21,703 |
Brands | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | |
Weighted Average Amortization Period | 7 years 2 months 12 days | 7 years 10 months 24 days |
Total intangible assets | $ 82,475 | $ 84,278 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Weighted Average Amortization Period | 1 year 6 months | 2 years 3 months 18 days |
Total intangible assets | $ 101 | $ 107 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2.9 | $ 3.2 | $ 8.8 | $ 11.3 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 2,560 | |
2024 | 10,101 | |
2025 | 9,392 | |
2026 | 8,650 | |
2027 | 8,247 | |
Thereafter | 27,395 | |
Total intangible assets, net | $ 66,345 | $ 76,105 |
Debt - Senior Secured Credit Fa
Debt - Senior Secured Credit Facility (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 24, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | |||||
Repayment of line of credit | $ (33,100,000) | $ 0 | |||
Interest expense | $ 2,800,000 | $ 1,800,000 | 8,500,000 | $ 4,500,000 | |
Line of credit | |||||
Debt Instrument [Line Items] | |||||
Outstanding letters of credit | $ 1,300,000 | 1,300,000 | |||
Senior Secured Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Net leverage ratio (greater than) | 3.50 | ||||
Fixed charge coverage ratio, maximum | 1.25 | ||||
Senior Secured Credit Facility | Leverage Ratio Exceeds 2.75 | |||||
Debt Instrument [Line Items] | |||||
Net leverage ratio (greater than) | 2.75 | ||||
Percent of excess cash flow | 50% | ||||
Senior Secured Credit Facility | 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% | ||||
Senior Secured Credit Facility | Term loan | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 100,000,000 | ||||
Additional borrowing capacity (up to) | $ 50,000,000 | ||||
Debt instrument, term | 5 years | ||||
Amortized annual payments percentage, year one | 5% | ||||
Amortized annual payments percentage, year two | 5% | ||||
Amortized annual payments percentage, year three | 7.50% | ||||
Amortized annual payments percentage, year four | 7.50% | ||||
Amortized annual payments percentage, year five | 10% | ||||
Net leverage ratio (greater than) | 2.75 | ||||
Basis spread on variable rate | 3.25% | ||||
Senior Secured Credit Facility | Line of credit | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Debt instrument, term | 5 years | ||||
Net leverage ratio (greater than) | 2.75 | ||||
Repayment of line of credit | $ (33,100,000) | ||||
Senior Secured Credit Facility | Line of credit | Revolving credit facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Unused amounts fee under the revolver, percent | 0.25% | ||||
Senior Secured Credit Facility | Line of credit | Revolving credit facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Unused amounts fee under the revolver, percent | 0.35% | ||||
Senior Secured Credit Facility | Line of credit | Revolving credit facility | SOFR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.25% | ||||
Interest rate for borrowings | 8.68% | 8.68% |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Capitalized debt issuance costs | $ (1,165) | $ (1,501) |
Total debt | 106,685 | 143,649 |
Less: current portion | (7,700) | (5,600) |
Total long-term debt | 98,985 | 138,049 |
Term loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 100,950 | 105,150 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,900 | $ 40,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 | |
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease costs | $ 2,557 | $ 2,180 | $ 7,467 | $ 6,691 |
Variable lease costs | 246 | 145 | 640 | 463 |
Short-term lease costs | 97 | 91 | 284 | 312 |
Total lease costs | $ 2,900 | $ 2,416 | $ 8,391 | $ 7,466 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Cash paid for operating lease liabilities | $ 5,990 | $ 4,145 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 7,240 | $ 21,987 |
Leases - Other Information Rela
Leases - Other Information Relating To The Company’s Operating Leases (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 6 years 8 months 12 days | 7 years 4 months 24 days |
Weighted-average discount rate | 5% | 4.30% |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Remainder of 2023 | $ 2,309 | |
2024 | 8,829 | |
2025 | 8,267 | |
2026 | 6,936 | |
2027 | 5,665 | |
Thereafter | 17,963 | |
Total remaining lease payments | 49,969 | |
Less: imputed interest | 7,650 | |
Total operating lease liabilities | 42,319 | |
Less: current portion | (7,046) | $ (6,643) |
Long-term operating lease liabilities | $ 35,273 | $ 34,404 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Loss before income taxes | $ (73,688) | $ (16) | $ (88,836) | $ (3,005) |
Benefit from (provision for) income taxes | $ 3,278 | $ (98) | $ 3,833 | $ 204 |
Effective tax rate | (4.40%) | 612.50% | (4.30%) | (6.80%) |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other benefits | $ 8,617 | $ 10,569 |
Accrued freight costs | 4,175 | 5,064 |
Sales tax payable | 4,614 | 15,999 |
Accrued marketing costs | 3,412 | 2,566 |
Accrued professional services | 1,718 | 2,509 |
Other accrued liabilities | 4,966 | 3,099 |
Total accrued liabilities | $ 27,502 | $ 39,806 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Disaggregation of Revenue [Line Items] | ||
Total deferred revenue | $ 10,938 | $ 11,421 |
Gift cards | ||
Disaggregation of Revenue [Line Items] | ||
Total deferred revenue | 10,570 | 10,829 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total deferred revenue | $ 368 | $ 592 |
Equity-based Compensation - Nar
Equity-based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | 15 Months Ended | 18 Months Ended | |||||||
Sep. 30, 2023 USD ($) $ / shares shares | Sep. 29, 2023 | Sep. 30, 2021 shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2021 shares | Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2021 segment | Dec. 31, 2018 shares | Mar. 31, 2022 | Sep. 30, 2023 USD ($) $ / shares shares | May 30, 2023 shares | Dec. 31, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Reverse stock split | 0.0833 | 0.0833 | ||||||||||
Granted (in shares) | 0 | |||||||||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 81.47 | $ 81.47 | $ 81.47 | $ 81.47 | $ 83.36 | |||||||
Number of options vested (in shares) | 0 | 19,608 | ||||||||||
Unrecognized compensation cost | $ | $ 1.2 | $ 1.2 | $ 1.2 | $ 1.2 | ||||||||
ESPP purchase rights | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted (in shares) | 21,892 | |||||||||||
Weighted average price of shares purchased (in dollars per share) | $ / shares | $ 4.11 | $ 4.11 | $ 4.11 | $ 4.11 | ||||||||
Stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Expiration period | 10 years | 10 years | ||||||||||
Granted (in shares) | 416,667 | |||||||||||
Number of tranches | segment | 4 | |||||||||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 109.27 | |||||||||||
Requisite service period | 5 years 6 months | |||||||||||
Weighted average period (in years) | 5 years 4 months 24 days | |||||||||||
RSUs | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Weighted average period (in years) | 1 year 10 months 24 days | |||||||||||
Vesting period | 4 years | 3 years | ||||||||||
Total unrecognized compensation cost | $ | $ 6.9 | $ 6.9 | $ 6.9 | $ 6.9 | ||||||||
Granted (in shares) | 33,764 | |||||||||||
Time-based incentive units | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Unrecognized compensation cost | $ | $ 2.3 | $ 2.3 | $ 2.3 | $ 2.3 | ||||||||
Weighted average period (in years) | 1 year 1 month 6 days | |||||||||||
Vesting period | 4 years | |||||||||||
Granted (in shares) | 0 | |||||||||||
2021 Omnibus Incentive Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares reserved for issuance (in shares) | 1,456,396 | 408,355 | 1,456,396 | 408,355 | 1,456,396 | 1,456,396 | 833,333 | |||||
Annual increase of shares authorized for issuance (percent) | 1% | |||||||||||
2021 Omnibus Incentive Plan | Stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Unrecognized compensation cost | $ | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | ||||||||
Weighted average period (in years) | 1 year 9 months 18 days | |||||||||||
2021 Employee Stock Purchase Plan | ESPP purchase rights | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares reserved for issuance (in shares) | 316,797 | 102,088 | 316,797 | 102,088 | 316,797 | 316,797 | ||||||
Annual increase of shares authorized for issuance (percent) | 1% | |||||||||||
Offering period | 6 months | |||||||||||
Percentage on share price issued | 85% | |||||||||||
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 (in shares) | 16,475,735 |
Equity-based Compensation - Sto
Equity-based Compensation - Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Options | |||
Beginning balance (in shares) | shares | 39,821 | 39,821 | 42,288 |
Granted (in shares) | shares | 0 | ||
Exercised (in shares) | shares | 0 | ||
Forfeited/Repurchased (in shares) | shares | (2,467) | ||
Ending balance (in shares) | shares | 39,821 | 39,821 | 42,288 |
Number of options vested (in shares) | shares | 0 | 19,608 | |
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ / shares | $ 83.36 | ||
Granted (in dollars per share) | $ / shares | 0 | ||
Exercised (in dollars per share) | $ / shares | $ 0 | ||
Forfeited/Repurchased (in dollars per share) | $ / shares | 114 | ||
Ending balance (in dollars per share) | $ / shares | $ 81.47 | $ 81.47 | $ 83.36 |
Weighted Average Exercise Price Vested (in dollars per share) | $ / shares | $ 83.58 | ||
Weighted Average Remaining Contractual Term (years) | 8 years 3 months 21 days | 9 years 14 days | |
Weighted Average Remaining Contractual Term, Vested | 8 years 3 months 14 days | ||
Aggregate Intrinsic Value | $ | $ 0 | $ 0 | $ 0 |
Aggregate Intrinsic Value, Vested | $ | $ 0 | $ 0 |
Equity-based Compensation - Res
Equity-based Compensation - Restricted Stock Units (Details) - RSUs | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 367,512 |
Granted (in shares) | shares | 33,764 |
Vested (in shares) | shares | (54,335) |
Forfeited/Repurchased (in shares) | shares | (37,095) |
Ending balance (in shares) | shares | 309,846 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 32.81 |
Granted (in dollars per share) | $ / shares | 4.91 |
Vested (in dollars per share) | $ / shares | 51.50 |
Forfeited/Repurchased (in dollars per share) | $ / shares | 36.68 |
Ending balance (in dollars per share) | $ / shares | $ 26.04 |
Equity-based Compensation - Inc
Equity-based Compensation - Incentive Units (Details) - Time-based incentive units - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Units | ||
Beginning balance (in shares) | 3,363,856 | |
Granted (in shares) | 0 | |
Vested (in shares) | (1,499,521) | |
Forfeited/Repurchased (in shares) | (16,150) | |
Ending balance (in shares) | 1,848,185 | |
Number of Units Vested (in shares) | 7,373,102 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 1.43 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 1.36 | |
Forfeited/Repurchased (in dollars per share) | 3.19 | |
Ending balance (in dollars per share) | 1.47 | |
Weighted Average Participation Threshold | ||
Beginning of the period (in dollars per share) | 18.64 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 17.65 | |
Forfeited/Repurchased (in dollars per share) | 22.68 | |
End of the period (in dollars per share) | $ 19.42 | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 0 | $ 0 |
Equity-based Compensation - Equ
Equity-based Compensation - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 1,718 | $ 1,586 | $ 5,478 | $ 4,448 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | 142 | 146 | 390 | 359 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | 923 | 682 | 2,939 | 1,865 |
ESPP purchase rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | 3 | 110 | 129 | 110 |
Time-based incentive units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 650 | $ 648 | $ 2,020 | $ 2,114 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 29, 2023 | Sep. 30, 2021 | Sep. 30, 2023 USD ($) class_of_common_stock vote $ / shares shares | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) class_of_common_stock vote $ / shares shares | May 25, 2023 USD ($) | Dec. 31, 2022 $ / shares shares | |
Equity [Abstract] | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||
Number of classes of common stock | class_of_common_stock | 1 | 1 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, number of votes per share | vote | 1 | 1 | |||||
Reverse stock split | 0.0833 | 0.0833 | |||||
Stock repurchase program, authorized amount | $ | $ 2,000 | ||||||
Repurchase of shares (in shares) | 106,566 | 162,716 | |||||
Repurchase of shares, value | $ | $ 612 | $ 299 | $ 900 | ||||
Average share price (in dollars per share) | $ / shares | $ 5.97 | $ 5.83 | |||||
Treasury stock repurchased (in shares) | 33,718 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Numerator: | |||||
Net loss | $ (70,410) | $ (114) | $ (85,003) | $ (2,801) | |
Denominator: | |||||
Weighted-average common shares outstanding, basic (in shares) | [1] | 10,695,621 | 10,723,859 | 10,736,628 | 10,721,995 |
Weighted-average common shares outstanding, diluted (in shares) | [1] | 10,695,621 | 10,723,859 | 10,736,628 | 10,721,995 |
Net loss per share: | |||||
Net loss per share, basic (in dollars per share) | [1] | $ (6.58) | $ (0.01) | $ (7.92) | $ (0.26) |
Net loss per share, diluted (in dollars per share) | [1] | $ (6.58) | $ (0.01) | $ (7.92) | $ (0.26) |
[1]Adjusted for the one-for-12 Reverse Stock Split. Refer to Note 14, “Stockholders’ Equity.” |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities (in shares) | 332,873 | 151,536 | 358,863 | 105,890 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Revolving credit facility - New Senior Secured Credit Facility - Line of credit - Subsequent Event $ in Millions | Oct. 19, 2023 USD ($) |
Subsequent Event [Line Items] | |
Drawn on the revolving credit facility | $ 5.5 |
Interest rate for borrowings | 8.70% |