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Revolution Dancewear CEO Tells Middle-Market Business Owners to Pay Oceans No Mind

It seems that more lower-middle-market firms these days are opting to make the move overseas ever earlier. Here’s why a dancewear company from the Chicago suburbs decided that Europe couldn’t wait.

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Asked why his Niles, IL-based firm opted to make its first acquisition in the United Kingdom rather the United States, Revolution Dancewear CEO Robb Lippitt recalls the sigh of relief that one European customer produced when she realized that she would no longer be tasked with having to make 2,000 dance costumes by hand for her studio’s end-of-year recital.

“What we had learned though research and by spending some time in Europe was that the dance costume market was very immature; in fact, costumes were primarily still being made with hand stitches and seamstresses,” explains Lippitt, who says that potential U.S. acquisition targets quickly lost their luster when the market penetration numbers came under consideration.

So last summer, Revolution Dancewear acquired Dance Direct, the largest online retailer of dance apparel in the United Kingdom and Europe. While the terms of the deal were not disclosed, the buyout expanded Revolution Dancewear’s workforce ranks to 93 employees, up from 55 at the end of 2011.

Unlike Revolution Dancewear, which sells its labeled apparel exclusively through dance studios, Dance Direct is characterized by Lippitt as a direct-to-consumer, multibrand, e-commerce business.

“We saw Dance Direct as a great platform for going into the European market and leveraging the knowledge that they have when it comes to reaching European customers,” says Lippitt, who quickly mentions that the middle-market company remains committed to its dance studio channel inside the United States.

Still, it would seem that one of the other big plusses that a European acquisition offers a U.S.-based firm is the diminished possibility of any immediate conflict between U.S. and Europe distribution channel strategies.

“The core model for Revolution Dancewear is to only sell to and through the dance studio. Revolution’s insight was that the dance studio was really not just where students came for lessons. The studio owners often became role models, so the original innovation was the notion that any studio could act as a direct retail outlet,” explains Lippitt, who first served as an advisor to Scott Harris, who originated the model after establishing the firm in 1996.

It was as a board member that Lippitt helped Harris to consider possible private equity partners, leading to a July 2010 recapitalization by Incline Equity Partners of Pittsburgh, PA.

Robb Lippitt Headshot 12 12 300 DPI“Along the way, I had plenty of opportunities to not choose to work with them. They just do it the right way. They understand that it’s the people and not just the numbers,” says Lippitt, who had an earlier stint working with private equity partners when he was COO of e-Prize of Detroit, MI.

“I thought it was exciting to take on what Scott had built over 16 years — this really interesting company — and one that is focused on growth and changing how business in this intriguing industry was done,” recalls Lippitt, who was named CEO in 2011.

Today, Revolution Dancewear boasts of having 12,500 active customers, up from 11,100 in 2010 — a 12 percent increase.

As for growth inside the U.S. market, Revolution’s fortunes may be tied more to Harris’s original selling model than to dancewear itself.

Says Lippitt: “There are other activities that engage kids, where there is a studiolike environment, where they are taking classes from people who are passionate about their discipline, and they need to be outfitted — so there are some potentially logical areas where we can grow beyond dance.”

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