Amdp final reupload

 To: Professor Clark Hansen, CEO, AMDP

From: Angelita Chew, Research and Development Date: March 8, 2024

Subject: Bombas LLC. Recommendation Memo

As a member of AMDP’s Research and Development team, I recommend that AMDP does not invest in Bombas LLC. until further investigation of their financial statements is completed.

In this memo you will find:

1. Definitions of AMDP's standards

2. An overview of Bombas as a company, their sustainable practices, and their financial

timeline

3. Two expert opinions on Bombas

4. My concluding recommendation

AMDP Standards

At AMDP, we aim to partner with companies that align with our commitment to conducting business in a socially responsible, environmentally sustainable, and profitable way. We evaluate potential partners based on the following criteria.

Triple Bottom Line (TBL): A sustainability framework that expands upon the original concept of a company’s bottom line which typically focuses on profit. The concept consists of the 3 Ps listed below.

People: An organization’s level of social responsibility and its corresponding positive or negative impact on its employees, vendors, and customers.

Planet: An organization’s environmental responsibility. This can be evaluated based on the impact of a company’s transition from one mode of production or service to another more eco-friendly method.

Profit: An organization’s financial responsibility in generating profit while adhering to ethical and fair practices such as paying their fair share of income taxes (Kenton, 2023).

Corporate Social Responsibility (CSR): A business model that helps companies hold themselves socially accountable and be more conscious of their impact on the people involved with the company, ranging from the general public to its stakeholders, and the economic, social, and environmental aspects of society. By engaging in CSR, companies work to contribute to

 society and support the environment rather than detract from them. There are four primary types of CSR including environmental, ethical, philanthropic, and financial responsibility (Fernando, 2024).

Social Enterprise: A business that focuses on not only generating profit but also fulfilling a societal need. They are not focused on profit maximization for the sake of shareholder benefit as they reinvest their generated revenue to continue funding their social mission (The Investopedia Team, 2022).

Carbon Footprint: The amount of greenhouse gas (such as CO2 and methane) emissions generated directly and indirectly by a business (Selin, 2024). It can be measured in a few ways for companies. One way is by considering a business’s supply chain, use, and disposal of its products. Another way is by calculating the emissions of greenhouse gasses across a product’s life cycle - from the byproduct of obtaining materials to the fuel burned when it is disposed of (Kaufman, 2011). It is important to reduce a company’s carbon footprint because greenhouse gasses negatively affect air quality, can harm human health, contribute to global warming, and lead to economic losses overall (Candanosa, 2021).

Overview of Bombas

Company Overview and Values

Bombas LLC. is a New York based Certified B Corp apparel and fashion brand that focuses on selling comfortable socks, underwear, t-shirts, and more while also supporting those experiencing homelessness through their commitment to their one purchased = one donated mission. The name “Bombas” represents the company’s values as it comes from the Latin term for bumblebee. This name reflects the company’s goal to work together in making their hive, community, and world a better place.

The company was founded in 2013 by Randy Goldberg and David Heath after they discovered that socks were the No. 1 most requested item in homeless shelters. This led the pair to also realize that the sock industry had minimal innovation, so they worked to redesign the sock, opened a crowdfunding pre-sale campaign with over $140,000 in presales, and eventually accepted an offering on the TV show Shark Tank from Daymond John (Utley, 2017).

Sustainable Practices - Company Claims

Since their founding, Bombas has donated over 100 million new clothing items to those in need with the help of their 3500+ Giving Partners (partner organizations that support at-risk individuals experiencing homelessness) across the United States. Bombas caters to the top needs

 of homeless shelters by donating specially designed socks, underwear, and t-shirts that are meant to be highly versatile, flexible, and antimicrobial so they can best serve their recipients (Bombas).

In Bombas’s Impact Report, the company claims that they fulfill their one purchased = one donated promise within 12-months of a customer purchasing an item. The corresponding donation product is sent out after Bombas adds up the materials needed to produce the products, receives feedback from their Giving Partners on the most demanded sizes and types of garments needed, and coordinates when would be the best time for communities to receive them (Bombas).

Bombas also claims to be both community and planet conscience. They show that they are environmentally more friendly by creating longer lasting clothing, using recycled materials in some of their products, shipping packages in 100% recycled materials, and by offering Take Back Bags for unwanted clothing through their partnership with For Days to reduce the amount of clothing going to landfills (Bombas).

Financial Track Timeline

- 2013

- Within the campaign’s first 30 days Bombas made $150,000 in sales and

$500,000 by the sixth month

- To fund inventory, Bomaas raised $1 million from angel investors (Breen)

- 2014

- Bombas presents on Shark Tank and receives deal of $200,000 for 17.5% equity

stake from Daymond John (Breen) - 2022

- Bombas’s operating revenue was approximately $22.7 million (Orbis) - 2023

- Bombas’s annual revenue was 8.3 million

- Bombas makes approximately $22,740 a day and $691,667 a month

- The company employs around 201 people and the revenue per employe ratio is

$41,294 (Zippia)

Expert Opinions

Opinion 1: Jeff Fromm & Jimmy Keown

According to Jeff Fromm, an expert on consumer trends, sustainability, and innovation from Forbes, Bombas is notable for upholding its promise of cultivating a positive brand culture which

 has in turn helped them connect with their customers. Jimmy Keown, the VP and Growth Strategy Director at Barkley, comments on Bombas’s brand culture. He explains that Bombas’s culture is “healthy and thriving” with employees who believe and advocate for the brand’s purpose. As a result of this internal harmony, Keown claims that the brand has been able to connect emotionally with their customers and fans, which helped them with sales during the pandemic as they turned their focus to making a positive impact by lending their distribution networks to other social organizations overwhelmed by the influx of demand for goods in homeless shelters during the pandemic (Fromm, 2020).

Opinion 2: Stifel 2023 Sustainability Survey Report

According to the global wealth management and investment banking company Stifel’s “Sustainability Survey Report of Key Findings” in December of 2023, Bombas ranks first place across all sustainability perception metrics which are expanded on below. The company evaluated sustainability perceptions across 50 brands ranging from Columbia to YETI.

- Overall sustainability

- Rank: #1 for its third consecutive year

- How it is measured: Based on the sustainability index which averages “brand

scores on Environmental Sustainability, Ethical Business Practices, and Social Sustainability.” Each of which reflect responses in interviews with Active/Casual Lifestyle Brand Purchasers.

- Environmental Sustainability

- Rank: #1

- How it is measured: Based on responses of Active/Casual Lifestyle Brand Purchasers who were asked “how good of a job do you think each of the following companies are doing with regards to environmental sustainability?”

- Ethical Business Practices

- Rank: #1

- How it is measured: Based on responses of Active/Casual Lifestyle Brand purchasers who were asked “how good of a job do you think each of

- the following companies are doing with regards to ethical business practices?”

- Social Sustainability

- Rank: #1

- How it is measured: Based on responses of Active/Casual Lifestyle Brand purchasers who were asked “how good of a job do you think each of the following companies are doing with regards to social sustainability?”

 My Recommendation

While Bombas LLC embodies many of the values AMDP seeks in their companies through their dedication to maintaining their corporate social responsibility and their positive impact on their community and employees, the lack of clarity on the company's precise financial standing is a cause of concern. Before potentially reconsidering investing in Bombas LLC, AMDP would need to obtain additional details regarding the company's finances. Thus, for the time being, I recommend AMDP does not invest in Bombas LLC at this time.

Thank you,

Angelita Chew AMDP R&D Analyst

 Works Cited

“THE BOMBAS IMPACT REPORT.” Bombas, Bombas, beebetter.bombas.com/impact#appendix. Accessed 5 Mar. 2024.

BOMBAS LLC, orbis-r1-bvdinfo-com.libproxy2.usc.edu/version-20231204-5-3/Orbis/1/Companies/report/Index ?backLabel=Back+to+Segment+data+-+Business+lines&format=_standard&BookSection=KEY FINANCIALS&seq=0&sl=1709706197854. Accessed 8 Mar. 2024.

Breen, Amanda. “Bombas Is the Most Successful ‘Shark Tank’ Brand. Here’s Why.” Entrepreneur, Entrepreneur, 30 Oct. 2023, www.entrepreneur.com/starting-a-business/bombas-is-the-most-successful-shark-tank-brand-here s/464309.

Candanosa, Roberto Molar. “Reducing Emissions to Lessen Climate Change Would Yield Dramatic Health Benefits by 2030 – Climate Change: Vital Signs of the Planet.” NASA, NASA, 1 Dec. 2021, climate.nasa.gov/news/3134/reducing-emissions-to-lessen-climate-change-would-yield-dramatic -health-benefits-by-2030/.

Fernando, Jason. “Corporate Social Responsibility (CSR) Explained with Examples.” Investopedia, Investopedia, 14 Feb. 2024, www.investopedia.com/terms/c/corp-social-responsibility.asp.

Fromm, Jeff. “On Bombas, Brand Culture, and Creating True Believers: How to Win inside to Win Outside.” Forbes, Forbes Magazine, 8 Dec. 2020, www.forbes.com/sites/jefffromm/2020/12/08/on-bombas-brand-culture-and-creating-true-believe rs-how-to-win-inside-to-win-outside/?sh=69dff33d7202.

The Investopedia Team. “Social Enterprise: What It Is, How It Works, and Examples.” Investopedia, Investopedia, 11 June 2022, www.investopedia.com/terms/s/social-enterprise.asp#:~:text=A%20social%20enterprise%20or% 20social,used%20to%20fund%20social%20programs.

Kaufman, Leslie. “Companies Get New Tools for Calculating Emissions.” The New York Times, The New York Times, 4 Oct. 2011, www.nytimes.com/2011/10/04/business/corporations-getting-new-tools-for-calculating-emission s.html.

Kenton, Will. “Triple Bottom Line.” Investopedia, Investopedia, 17 Dec. 2023, www.investopedia.com/terms/t/triple-bottom-line.asp.

 Selin, Noelle Eckley. “Carbon Footprint.” Encyclopædia Britannica, Encyclopædia Britannica, inc., 15 Feb. 2024, www.britannica.com/science/carbon-footprint.

Stifel. “Sustainability Survey Report of Key Findings.” Stifel, Dec. 2023, www.stifel.com/Newsletters/InvestmentBanking/BAL/Marketing/StifelSays/2022/2022%20Stife l%20Sustainability%20Survey.pdf.

“Sustainability.” Bombas, shop.bombas.com/pages/sustainability. Accessed 5 Mar. 2024.

Utley, Tori. “Meet Bombas, the Social Impact Company That Gave 2 Million Pairs of Socks to the Homeless.” Forbes, Forbes Magazine, 23 Nov. 2017, www.forbes.com/sites/toriutley/2017/02/06/meet-bombas-the-social-impact-company-that-gave- 2-million-pairs-of-socks-to-the-homeless/?sh=3bda03288b4f.