1Mby1M Incubation Radar 2010: Sock Monkeys Clothing

By guest author Praveen Kumar

Sock Monkeys Clothing is a clothing line designed for children suffering from skin conditions such as eczema, epidermolysis bullosa, chicken pox, and other sensitive skin issues. The primary benefit is the scratch protection offered by the permanent “hand socks” that make up a part of each garment’s sleeves and cover fingernails while allowing children to still use their hands to pick things up. The clothing is made from extremely soft organic cotton to provide maximum comfort. Additionally, all stitching is on the outside of the garments to prevent chafing, the snaps are nickel-free to prevent allergic reactions, and the tags tear away easily to avoid irritation. All products are hand-made in the United States.

Sock Monkeys Clothing (the company takes its name from a type of stuffed toy, a monkey with red lips, made from worn “Rockford Red Heel” socks that became popular during the Depression) is manufactured by Industrial Sew-Tech in Cincinnati, Ohio, which has been in business for 35 years and is an expert in the industrial sewing and manufacturing industry. David Gray is the owner of Industrial Sew-Tech. Lisa Gray, his wife, is the designer and operations manager for Sock Monkeys Clothing. The Grays have a combined 40 years in the industrial manufacturing industry, including 15 years’ experience in children’s clothing manufacturing. David Gray used to manage large sewing crews for children’s clothing at Polly Flinders. He is an expert in scheduling and resource management, and production operations. Lisa Gray has extensive experience in optimizing clothing design for durability, style, and ease-of-construction.

The idea for Sock Monkeys Clothing came 18 months ago when the Grays had an infant suffering from eczema. They experienced the pain and trauma of trying to prevent their daughter from scratching herself to the point of severe bleeding and learned how difficult this condition is to treat and manage. The Grays were forced to purchase clothing from the United Kingdom because they could not find any domestic providers of scratch-protection clothing, and they quickly learned that having their daughter’s hands covered protected her skin and prevented her from damaging it. It was a relief to have found a product that worked, yet inconvenient and expensive to buy from Europe. Thus, they launched their own clothing line, leveraging their manufacturing expertise and infrastructure.

The Grays had been looking for a way to build a successful family business. When the need for clothing for children with eczema became apparent in the United States, this seemed to be the perfect opportunity. Kendra McKeever, David’s daughter, is leading the sales and marketing efforts with consultation from her husband, Jay McKeever. Kendra has spent the past four years in sales as a client executive for IBM. She received her BS in systems analysis from Miami University (2003) and MBA with an e-commerce concentration from Xavier University (2005). Jay has spent the past 11 years as the worldwide director of marketing for Cincom Systems, with previous experience in communications at UPS.

At present, Sock Monkeys Clothing is the only known manufacturer of scratch-protection clothing in the country. Customers must otherwise purchase garments from Europe. With the currency exchange and shipping costs, this quickly becomes cost prohibitive for many buyers. The target demographic is parents and grandparents. According to the National Institutes of Health, about 10% to 20% of all infants have eczema. Sock Monkeys is targeting children aged three months to three years with eczema and similar skin conditions. This brings the market potential to approximately 2.5 million children, according to U.S. Census Bureau statistics. Sock Monkeys Clothing estimates the TAM as each child having one of its garments, for a total TAM of $87.5 million. However, the clothing is also useful for children who suck their thumbs, bite their nails, or have chicken pox, poison ivy, burns, and so forth. This brings the potential market size to nearly 12 million children in the targeted age bracket. Kendra believes that because of the intricate construction details and quality of workmanship they put into the garments, Sock Monkeys Clothing is uniquely positioned to hold a leadership in the marketplace even if domestic competitors are introduced.

Sock Monkeys Clothing positions itself as offering high-quality, reasonably-priced garments that are made in the United States by a family-run business that empathizes with the pain of infant eczema. Each of these attributes plays well to parents and grandparents searching for a solution to ease their child’s pain. Kendra says that their products require ten different sewing machines to create the specialized seams that do not touch and aggravate the skin. Both the clothing and the organic cotton used to make it are produced in the United States, which can appeal to those who want to support American manufacturing. Sock Monkeys uses unscoured organic cotton that has not been treated with harsh chemicals (scouring is a process in which the cotton is treated with sodium hydroxide at high temperatures to make it more absorbent prior to bleaching and dyeing). Not only does this prevent skin allergy reactions, but it also prevents the garments from getting an odor after frequent use. The products work because they do not allow the children to scratch their itching skin. By providing U.S. parents and grandparents with a domestically made product that comes with a no-hassle return policy, Sock Monkeys has set itself apart from the European competition.

At present, Sock Monkeys Clothing is using promotional methods such as Internet marketing, its website, a blog, reciprocal linking, Help a Reporter Out (HARO) for free press releases and article mentions, Twitter, and Facebook. The company also uses paid Internet marketing in the form of Google AdWords and Yahoo! Ads. Direct mail campaigns were sent to pediatricians, dermatologists, hospital gift shops, boutique clothing stores, and trade shows such as the World’s Largest Baby Shower, and Kendra and Jay represented the company at this trade show.

Sock Monkeys Clothing is in the beginning stages. The company’s challenge is getting appropriate exposure to its target buyers. Total sales are approximately $2,000 in the past eight months, and the profit margin is roughly 55%. David Gray says that despite the no-hassle return policy, no customers have returned any items, suggesting a high satisfaction rating.

Sock Monkeys Clothing website traffic from November 1, 2009, to June 1, 2010, was 2,482 visits, 87.15% of which were new visits. Blog page traffic from November 1, 2009, to June 1, 2010, was 4,597 visits, 88% of which were new visits. There is already one repeat customer, and other customers indicated they will buy from Sock Monkeys Clothing again.

The company has been funded entirely out of personal savings and cash flow. Kendra McKeever has invested over $11,000 and David and Lisa Gray over $6,000. The family is trying to keep full equity in the business and avoid taking on debt to grow the company. Kendra says that if financing becomes necessary, they would likely take out personal credit lines to sustain the operations.

Kendra plans to expand Sock Monkeys Clothing through controlled growth and augmentation of the staff. The company has the network to do so with sewing contractors but will need to proceed in a phased manner. Sales efforts to date have been focused on website traffic generation through organic and paid Internet advertising and the direct mail campaigns mentioned above. Future sales plans include exploration of partnerships with existing children’s clothing stores and driving additional traffic to the website through PR, advertising, and other promotional methods.

Sock Monkeys Clothing is striving to become a $10 million-plus organization. At present, there are no plans to aim for an IPO and the founders would like to keep the private element to the organization. However, if the conditions are right, at some point in time they would likely entertain the idea of a buyout.

Sock Monkeys Clothing presented at Sramana’s 1M/1M roundtable on May 20, 2010. The recording of the session is here [30:00–39:00]. You can also find Sramana’s recap here. Sramana advised Kendra that the team needs to be on the top of the page of search results for those searching for infant eczema. She suggested that Kendra do laser-focused outreach to bloggers, especially mommy bloggers who are already discussing this topic, to see if they are willing to write about her product rather than going after the larger iVillage-type bloggers right now. Trying to get into publications read by pediatric dermatologists is also worth exploring. Although doctors don’t sell clothing, this could also help get the word of mouth going.

This segment is a part in the series : 1Mby1M Incubation Radar 2010