PEHub.com – July 9, 2009
“Revolutionary” Shoe Biz Seeking Money
PEHub.com – Erin Griffith, 2009-07-09
Unless you’ve picked up a box of Wheaties or browsed a Sky Mall lately, you may not have heard of Spira Footwear. It may be time to pay attention-its managers are attempting to position the company to “revolutionize the shoe world” with its WaveSpring technology.
That is, “if we don’t screw this up,” said CEO and co-founder Andy Krafsur.
Designed by a former aerospace engineer, the technology has been endorsed by Dick and Rick Hoyt and has even raised controversy over whether it was legal to wear in races like the Boston Marathon, given claims that it gives wearers an unfair advantage.
The El Paso, Texas-based company has been slowly and steadily growing since it began in 2000. It’s raised $8 million from angel investors to date and is seeking an additional $5 million from institutional investors as it expands the use of its technology into work boots, military footwear and other types of shoes. The company had $6.4 million in revenue last year and expects $7 to $7.5 million this year. Spira’s initial gross margins are 55%, which is higher than the industry average of 35%, Krafsur said.
Given its profitability at a small size, the business has attracted interest from both venture capital and private equity investors, Krafsur said. The firm is in “somewhat advanced” discussions with investors from both asset classes for cash infusions, and has received at least one letter of intent.
One atypical avenue the company is considering is a reverse merger with a publicly traded shell company. Krafsur said the benefits of such a deal could outweigh the costs and time that come along with public listings. Such a listing would raise the company’s profile, attract talent with options, offer existing shareholders an opportunity to invest more, and give the company currency to expand. Besides, he said, “We have 270 investors so we act like a public company already.”
Note: The Hickory Group, LLC is performing general financial advisory work for Spira Footwear, Inc.