Drew Field
Direct Public Offerings
Case StudiesBlue Fish Clothing, Inc.

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.