story by Kim Souza
ksouza@thecitywire.com
In just under three years Kourtney and Beau Barrett have disrupted the fitness headband segment with Junk Brands, a growing custom headband manufacturing operation based in their hometown of Bentonville.
Their finished products have resonated with fitness enthusiasts garnering Junk Brands a key partnership in the National Reebok Crossfit Championships, and a new licensing deal gives Junk an inside opportunity with the NBA. Junk is also has working deals in the collegiate realm with the NCAA and other licensing groups.
“We’ve come a long way from the days since my only outlet was selling these headbands out of the back of my Landcruiser,” said founder and CEO Kourtney Barrett.
This year she expects her burgeoning company will produce and sell between 300,000 and 500,000 custom headbands with the help of the 40 full-time employees she’s added since the summer of 2012. The headbands retail between $16 and $22, a price point that includes enough margin for Junk to continue its growth.
JUNKING IT
Some seven months pregnant with child No. 3 in the fall of 2011, Barrett said she and Beau were driving through a Starbucks for coffee when the barista complemented the headband she was wearing. The couple had just sold their real estate business with Grubb & Ellis and were looking for other opportunities.
“Beau looked at me at that drive thru window and said, ‘Headbands are going to be your next business and I am going to give you one year of my time to get it off the ground,’” Barrett said. “We have never looked back.”
The baby was born in February 2012. By that summer she recruited a seamstress via Craigslist because Kourtney did not sew. She had merely been folding the fabric for her own use, but said in order to sell a finished product she had to find some help with the sewing.
At that time, Barrett was ironing on the Junk logo. The Junk name came about because she was looking for something that was counter culture, but also cool and simple.
“In those early days I was hiring the sewing out and then ironing on the logos in my kitchen. When the baby was just a few months old, we loaded up the RV and trekked across the country setting up as a vendor at Crossfit competitions. Selling direct to consumer was best way for us to market our new brand and it’s something we still do today,” Barrett said.
GROWING PAINS
Early on Barrett said customers began to contact her saying the Junk logo had cracked and was peeling off after several washes.
“They didn’t want to return the headband. They just asked us to re-affix the label because they thought it was cool. This got Beau and I to thinking that there must be a better way. It literally kept us both up at nights,” she said.
Junk Brands by that point was up to 12 employees all working out of the couple’s garage at home. She said luckily her neighbors were great about the disruption and three large Junk Brands vans being parked in the drive.
During this period the couple experimented with the distributive work model, supplying sewers the equipment and allowing them to cut and sew the headbands in their own homes.
“That really didn’t work. We were getting the products back with coffee stains, smokey, covered in pet hair, and there was no way for us to control the quality of the product. We knew if our product was going to be made in the USA the quality had to be excellent. That’s why Junk Brands also became a manufacturer,” Kourtney Barrett said.
Junk Brands imports its raw fabric which is a polyester blend, not weaved in the U.S. The large fabric rolls are white or gray typically because the colorful designs on the headbands are created in-house by a team of five designers who are graphic artists. The colorful and proprietary designs are first printed on a special type of paper and run through a machine that infuses the image that includes the Junk logo into the fabric.
Barrett said it’s not like screen printing, but rather the ink is vaporized and burned into the fabric weave, so that it becomes one with the fabric and there is nothing to crack and peel over time.
“This process encompasses at least 17 variables for perfect execution. It was very expensive equipment and it took lots of trial and error, but we have perfected the process which allow us to customize as few as 10 headbands with the quality that is unheard of in this category,” Barrett said.
She said this process was exactly what they needed to disrupt the market in this category because most fitness quality headbands are made by major sports apparel companies who just use a solid color fabric, given that it’s such a small part of their overall sales.
Junk Brands headbands feature brilliant colors and designs that the company says hold up over time, which means a lot to the Barretts given they are made in Bentonville, Ark.
WHAT’S NEXT?
Junk Brands has already found a following in several sporting areas such as crossfit, lacrosse, field hockey, tennis, running, biking and yoga. The headbands are sold nationwide in dozens of small specialty stores and boutiques and locally in Lewis & Clark and Rush Running. Junk has a large e-commerce business and also sells on Amazon.com.
Barrett said Junk has just signed national deals to get their product in Dick’s Sporting Goods and Hibbett Sports stores. It recently got on the shelf in Lid’s, and Lid’s Team, Reebok and Fithub stores as well as Shields Sporting Goods.
“We worked hard to get into the national retailers and will continue to expand on these wholesale relationships this year and next. I have four sales people working this area daily. We also have a higher margin retail business and our growing customer business returns good margins too. Our events segment is also a revenue producing element of this business, which is ridiculous given that it’s also our marketing spend,” Barrett said.
Junk Brands has managed to grow its annual sales between 275% and 330% year-over-year since 2012,” Barrett said.
All of the money outside of payroll is being invested back into the business. She declined to provide investment startup details saying only that the couple has bootstrapped most of the expense cashing in equity from real estate owned and also buying, remodeling and selling 13 real estate properties in recent years.
“We are always buying and selling it’s just what we do. Beau also works full-time for Citrix which is what supports our family. We are not pulling any income from Junk Brands at this time, choosing to reinvest back into growing this company,” she said.
In January of this year Barrett said the couple took on an angel investor.
“We just had to do it. There were some big investments in equipment and infrastructure that had to be made if we were going to grow,” she added.
The couple in early 2014 purchased the Cox Communications building at 1006 N.W. 11th St. in North Bentonville. The 3,000 square-foot facility is at full capacity with 40 employees, packing, designing, printing, manufacturing, sales and back-office staff. The Barretts purchased the building next door (1004 N.W. 11th St., just of North Walton Boulevard) for $650,000 in November and have renovated 9,000 of the 15,000 square feet.
“We are planning to move into the 9,000 square foot space within the next week. They are finishing up the painting and cleaning at this point. The other 6,000 square feet of space is presently leased and we will have access to that space later this year as we work out a deal with those tenants,” Barrett said.
BRAND EXPANSION
The Barretts said Junk is their brand and all of their efforts have been building equity there, but that doesn’t mean there are can’t be sub-brands at lower price points in the future that could appeal to mass retailers like Wal-Mart or Target, perhaps more as a fashion item than fitness apparel.
“I don’t think you can walk into a big retailer off the street. We are a manufacturer and it has taken some time to get that process down. I feel like there is a place for a sub-brand of Junk on those shelves in due time. Junk is a woman-owned business and we are made in the U.S.A. which resonates well with several large retailers this day and time,” she said.
She told The City Wire that she comes from a long line of entrepreneurs and she and Beau always knew they wanted to make something. Today, that’s custom headbands, but who knows what products Junk Brands may produce from their Bentonville factory.
“Our customer base will let us know when they are ready for something else. I know hard work pays off and we have a creative team eager to tackle new challenges. There is not better place to start and run a business than Northwest Arkansas,” Barrett said.
Matt Fifer, CEO of Selling to the Masses, said what the Barretts have been able to do with Junk Brands is astounding. Despite being based just 1.5 miles from Wal-Mart’s headquarters, Junk Brands has focused elsewhere but found plenty of helpful resources for retail in channels that fit their pricing model and niche marketing area.
He likened them to Fran Free founder of Oh Baby Foods in Fayetteville who has managed to grow an organic baby food business into a national name without ever gracing the shelves at Wal-Mart.