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Case Studies Blue Fish Clothing, Inc.
Jennifer Barclay made block-printed
T-shirts in her parents' garage when she was 19, selling them at a festival. Nine years
later, she had built a profitable business with $8 million in annual sales, 160 employees
and a goal "to encourage people to believe in themselves and to inspire creativity
and self-expression."
Blue Fish Clothing operated three of its
own stores and a catalog/telephone sales division, at the time it began its Direct Public
Offering. Over 75% of its sales, however, were through 600 wholesale accounts, from small
boutiques to Nordstrom and Neiman Marcus. We knew that Blue Fish customers were loyal,
enthusiastic and dedicated to both the clothing and the corporate goal. The problem was
how to let them know they could share ownership with Jennifer in Blue Fish.
Announcements of the offering followed the letter of SEC
Rule 134 (described in Chapter 6, "The Regulatory Framework"). While the wording
was totally traditional, the design and graphics were definitely not. Hangtags went out on
all clothing after the offering prospectus was declared effective. Shaped like a fish, and
in pastel shades of Blue Fish colors, the announcements did not at all have the look that
brought them the "tombstones" nickname to begin with.
Creativity was the theme of the Blue Fish business and
much of that creativity went into spreading the word about the share offering, without
going outside the lines of securities regulation. There had been a minimum offering amount
of $2,500,000 and a maximum of $4,000,000, with May 13, 1996 as the deadline for reaching
the minimum. By early April, prospectus packages had gone out to enough people to have the
offering sold out. Still, the subscription agreements had hit a bottleneck. We recommended
that the Blue Fish board decide to end the entire offering on the May 13 date for reaching
the minimum. That way, a message could go out that action was necessary right away, or
they'd miss the opportunity to buy shares directly from the company, at a fixed price and
no commission.
All $4,000,000 was subscribed by the May 13 date, with
half the amount coming in the last few days, and trading began on the Chicago Stock
Exchange. |