Assets of Mobile Telephones and Equipment Retailer

LuMee, LLC is a well-known brand in the cellphone case market due to its unique technology that provides portrait quality lighting when snapping pictures. The typical customers are higher income women 16-35 who like to shop. The company has relied on Influencers to generate interest in the product, Kim Kardashian West being the most famous of the Influencers.

The company’s peak revenues were in 2016 when sales hit $16 million with a $4 million EBITDA. The previous CEO then switched strategies from Internet sales to attempt to enter retail sales in 2017 and the results were disastrous. The company also began to have quality and technical issues with their initial manufacturer (since solved with a new manufacturer) and the company entered into an ill-advised agreement for IP from a third party. These two events, along with a decrease in sales due to the strategy change, left LuMee with debts they could not cover.

The company was almost sold outside of bankruptcy in May for several million dollars. However, one creditor refused to agree to the terms, thus forcing the company into bankruptcy in order to sell the business with a clean title to the new owner.

The company is operating on a restricted budget at present but is still on course to have sales in the $8 million range in 2019. There are a few very interesting opportunities to expand the business once the bankruptcy is complete. One opportunity lies in expanding international operations. The second is a venture with a large media group (16 million readers in print, 21 million on their website and 17 million via social media) to market the LuMee brand worldwide for at least 2 years to their target audience which matches up with the demographics of the typical LuMee customer. The company will also focus on expanding their Influencer network.

At the end of May 2019, the balance sheet of LuMee showed non-cash assets at roughly $1.5 million. This includes account receivables, adjusted inventory, pre-paid accounts, furniture, fixtures and tooling.

The key value drivers of the business include the following:

· Unique premium priced offering that plays to the fashion consciousness of the LuMee target customer (customers rely on LuMee for fashion and photography expertise)

· Mailing list of roughly 400,000—which with a repeat customer rate of 21.4% and average order of $66.72—is quite valuable

· US and international utility patents, design patents and trademarks

· The average LuMee customer is a very desirable demographic who owns almost 3 LuMee cases and almost 8% of their customers own 5 or more LuMee cases

· Ability to leverage expertise to expand the product line: phone chargers, beauty lighting, etc.

· Opportunity to grow brand through international sales, joint ventures, expanding their Influencer network and with more marketing efforts.