“If you believe that doing good is as important as looking good” then you may consider investing in Aera stock. The quote is the actual pitch Aera uses on its website, and it is very catchy, but is Aera stock an interesting stock to invest in?
Aera is a luxury footwear company that is making certified vegan shoes with an emphasis on both quality and style. It makes sense — both aspects are important in the luxury industry. The materials are also as eco-friendly as possible, and Aera hopes to produce shoes shortly that will have a zero environmental impact.
The company is New York-based but the shoes are handmade in Italy. It is a recently established company with only two years of business, as the date of launch was 2018. The founders of Aera are Tina Bhojwani (co-founder and CEO), Jean-Michel Cazabat (co-founder and creative director), and Alvertos Revach (co-founder and investor). All founders have a long experience in the fashion and luxury industry and support social sustainability. 110% sustainable shoes.
How do they achieve that?
Aera measures with a scientific approach its impacts on the planet and then it offsets those impacts by 110%. Or as Bhojwani said in a Barron’s article, “If you’re 100 percent sustainable, you neutralize your environmental impact; at 110 percent, we are putting another 10 percent back into the planet.”
She further explained in an article for the Council of Fashion Designers of America, “This is achieved through a partnership with SCS Global, a leading third-party environmental certification agency. We are a transparent company and our lifecycle assessment is published on our website.”
Cazabat said, “The philosophy of the collection is to create timeless and seasonless silhouettes, which is ultimately more sustainable.”
The current product line has eight categories for women, such as ballerinas and boots, and only three categories for men, with boots, derbies and loafers. Their price is not cheap — the lowest-price ones start from about $300 — but their price should not be a problem as they are defined as a luxury, handmade and vegan shoe brand. For this combination of features, they target a niche market, and luxury by definition has a lofty price tag on it.
Aera Stock’s Problem, The Solution, Traction and the Business Model
Celebrity endorsement is a great way for companies to use as a marketing tool and increase their sales. Aera has gained traction and celebrities preferring and wearing its luxury vegan shoes, from Rosario Dawson to Meryl Streep (to name a few).
Sales, although it is still early to gather information about their trend, seem to have already grown. In the first quarter of 2020, the company had sales of $47,500 which represent 75% of the sales reported to be $63,000 in the last six months of 2019, the period of the soft launch. If the sales growth in 2020 continues with this momentum, it is not unreasonable to assume that overall sales in 2020 will be much higher than in 2019. The brand has been featured in several very large global publications such as Vogue and Forbes helping in building the brand name reputation.
The main problem Aera wants to address with success is that the fashion industry can negatively impact the planet in a number of ways, including climate change, working conditions, and even animal abuse. On Republic, the degree of environmental negative impact of the fashion industry is self-explanatory. “The fashion industry is the second-largest consumer of water worldwide, produces 20% of global wastewater and is responsible for 10% of global carbon emissions – more than all international flights and maritime shipping combined.”
The solution is to build and abide by a philosophy with a three-core focus. Actions should be:
- Good for You
- Good for People
- Good for the Planet
It is an interesting combination, especially with the motto at the very start of this article about Aera stock. The customers feel good, workers are paid with a living wage and the planet is not further environmentally polluted. Not bad as a concept.
The business model is primarily focused on online business, 80% of it, and the rest of 20% is on wholesale both in the U.S. and globally. The company claims that online shopping makes its prices being competitive compared to other luxury footwear brands. Free shipping is included on all orders and a few potential partnerships for wholesale business have already been discussed and may soon be announced. A focus on international sales is supportive of sales growth and Aera stock.
The Sustainability Market Growth
A report in The European Business Review takes a closer look at the momentum in growth for the sustainability market — which is expected to be a $12 trillion market by 2030. Another more moderate report published by Allied Market Research, titled, “Green Technology and Sustainability Market by Technology and Application: Global Opportunity Analysis and Industry Forecast, 2019–2026“ estimates that ” the green technology and sustainability market size was valued at $6.85 billion in 2018, and is projected to reach $44.61 billion by 2026, growing at a CAGR of 26.5% from 2019 to 2026.”
This growth is a positive for the Aera business model and its sustainability philosophy.
How to Invest in Aera Stock
You can invest in Aera stock on the Republic crowdfunding campaign, with a minimum investment of $100, a maximum valuation of $5,000,000, and a deadline in very early December 2020.
Some perks are given even from the minimum amount of investment. The risks are high for the stock, but the combination of eco-friendly materials, sustainability and the vision to help to fight environmental pollution makes it an interesting investment to consider.
As of this writing, Stavros Georgiadis, CFA did not hold a position in any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks