What was once CCT Capital Ltd has transformed this week into Mezzi Holdings (
TSX:V.MZI,
Stock Forum), a company dedicated to producing ‘smart luxury’ – luggage and bags that bring a high tech tilt to the fashion world.
Already successful as a private company based out of Richmond B.C., Mezzi’s focus is now on LA and New York as it has recruited celebrities to design their fashion offerings that will sit alongside the creations of famed designer and company President Raif Adelberg.
Adelberg is ranked as one of GQ Magazine’s ‘top up and coming designers’, and previously founded Richard Kidd and Wings and Horns, after emerging with Herschel Supply Co.
Early trading in the stock was solid, with an 18.5% jump in early trading Thursday, up to $0.19 from the $0.16 debut.
The company’s ‘smart luxury’ offerings include a briefcase, pouch and handbag on opening day, with the technological aspect being a chip that uses crowd-sourced GPS to tell you where your bag is, allowing you to use an app to track it, an alarm to hear it, or even use your bag to find your phone should that go missing. Upgrades to that tech are coming soon, as are a variety of new products.
The Mezzi line is all produced in the US, using just in time production that eliminates oversupply and frees capital. From sale to delivery, online customers will expect a three-week turnaround.
When the product hits stores, likely next year after online sales have shown demand and name recognition, the lines will include celebrity-backed products that the company expects will benefit from extensive social media pushes to multi-million user followings.
Chairman, CEO and Director Keir Reynolds has widely established celebrity links running back to his days as a founder of LX Ventures (now social media play Mobio –
TSX:V.MOB,
Stock Forum), which he lined up with the Kardashian family, soccer God Cristiano Ronaldo, and a long line-up of teen heartthrobs, musicians, actors and models. Reynolds left that company to bring Mezzi to market.
Publicly held fashion companies have been growing in leaps and bounds over the past several years, with stars such as Michael Kors (
NYSE:KORS,
Stock Forum) ramping up from a sub-$25 IPO in 2011 to $80-$90 today, and a whopping $16b market cap.
In the same timeframe, Brown Shoe Incorporated (
NYSE:BWS,
Stock Forum) rose from $6 to $27 today, with a $1.2b market cap. Christopher & Banks (
NYSE:CBK,
Stock Forum) was a $1 stock in mid-2012, and delivered a 6x multiple to investors in the time since.
Mezzi opens the show with a $6.5m market cap and just 38m shares out.
The Canadian junior markets are decidedly thin on fashion stocks. In fact, a search of the Venture exchange for apparel manufacturers shows only a handful, including the $100m market cap specialty bra house iFabric Corp (
TSX:V.IFA,
Stock Forum) (a ten-bagger since mid-2012), troubled performance sportswear manufacturer Respect Your Universe (
TSX:V.RYU,
Stock Forum), and uniform manufacturer Unisync (
TSX:V.UNI,
Stock Forum), formerly ComWest.
Michael Newton, a portfolio manager and director at Scotia Macleod, told the Wall Street Journal last year, “The TSX already has a deficit of consumer stocks, specifically in fashion and clothing,” which makes Mezzi not just an interesting new tech play, but also potentially the great white (or black patent leather) hope of the TSX-V.
--Chris Parry
https://www.twitter.com/chrisparry
FULL DISCLOSURE: Mezzi Holdings is a Stockhouse Publishing client.