1. Company Profile

Altar’d State is a retailer with a social conscience rooted in Christianity. The private company was cofounded by two former Goody’s employees, Aaron Walters and Brian Mason, a little over six years ago with the expressed goal to “fill a gap in the retail industry and change the world for the better.” Today, the retail brand has over 60 stores in the southeastern US and an e-commerce site, www.altardstate.com, that sell women’s apparel and accessories and home décor items. Altar’d State successfully distinguishes itself from competitors through its combined focus on social causes and fashion.

From Altar’d State’s LinkedIn Profile

“Altar’d State is an energetic fashion boutique that offers a distinctive shopping experience for women interested in the latest fashion finds, the most anticipated accessories and that next great gift. Whether she is 16 or 60, the common thread is her desire to share her personality through stylish, comfortable, on-trend clothes, shoes and accessories. Altar’d State customers can enjoy supporting an organization that promotes confidence, civic involvement and positivity through its merchandise and philosophy of giving back. Altar’d State is more than a store, it is a movement.”  

2. Retail and Apparel Disruption Provide the Opportunity

Since the Great Recession, US youth retailers Abercrombie & Fitch, Aéropostale and American Eagle Outfitters have seen their sales growth slow and stall as their target audience has opted for fast fashion, yoga pants and IT—smartphones and tablets. Gen X has moved from Gap (only a week ago, Gap announced the closing of another 175 North American stores) to T.J.Maxx and Marshalls or Nordstrom, in response to boring, overpriced merchandise and a heightened value focus. FBIC Global Retail & Technology sees the apparel market fragmenting while simultaneously providing ample opportunity for new, exciting, differentiated brands to capture share—at least for a little while, because brand loyalty is on the wane as well. Fashion is always about newness: the next season, a new silhouette, a new designer or a new brand. Today’s environment is frenetic, with new brands and online retail concepts being born daily. Altar’d State does stand out in this environment, and judging from its social media reception, it is well liked. The brand resonates with its shoppers. Given the number of store closures and retail brands that have announced bankruptcy in the past 12 months, REITs will be interested in this concept.

3. Customer Demographics

Based on Altar’d State’s brand positioning on its website and the products offered, FBIC Global Retail & Technology believes the company’s true target audience is a 20- to 45-year-old female, living in a mid- to upper-income household, who is both socially and fashion conscious. According to a report released by the US Census Bureau in 2013, there are approximately 52 million women in the US between the ages of 20 and 45. A 2013 survey by BCG Consulting Group on Millennials indicated that 48% of young Millennials “try to use brands of companies that are active in supporting social causes”. In addition, Millennials would be more likely to buy a product if they know that the brand helps those in need or is mindful of its social responsibilities.

4. Marketing

Grassroots marketing extending to explicit Christianity may turn off some consumers (and limit brand appeal if the retail footprint extends into the western and northern US), but standing for something is a way to stand out in a crowd of copycat merchandise. Moreover, brands that give back appeal to the millennial demographic. Altar’d State donates 1% of sales to local and international charities. In October 2013, it began donating to a registered 501(c)(3) not-for-profit organization that works to support the sustainable social development efforts of Coprodeli Peru. Cofounder, Chairman and CEO Aaron Walters told WBIR.com in May 2013 that a portion of the proceeds from the company’s private-label Altar’d State brand goes to feed, educate and shelter children around the globe. Altar’d State carried TOMS Shoes in 2013, which donated a pair of shoes to a child in need for each pair sold.

5. Merchandising and Online Assortment

Altar’d State has done well by matching its merchandise to its customers. The company’s merchandise and point of view are reminiscent of the Urban Outfitters’ Free People and Anthropologie brands, and of Francesca and Etsy, but are offered at lower price points. Altar’d State’s pricing is closer to Zara’s, with dresses generally $69.95 to $79.95, marked down to $49.99 to $54.88. Denim prices range from $69.95 to $79.95, or $19.88 on sale—higher than the aforementioned youth retailers, but similar to Buckle’s private-label BKE denim. Shorts run $39.95 to $49.95, and tops range from $29.95 to $79.95. In addition to its own branded merchandise, Altar’d State’s website lists seven brand partners that also believe in giving back. Online signage and visuals are a blend of Woodstock Nation, boho and turn-of-the-20th-century general store. Shopping the website is easy, as is sharing the site and its products with others. On product pages, the options “Add to Bag” and “Add to Wishlist” appear alongside options to share on Facebook, Twitter, Pinterest, Google+ and email.