Assembled Brands Insights: Q2 Portfolio Growth

In the first quarter of 2020, we released our first business insights report focused on key growth metrics identified within our portfolio. After a second quarter unlike any other, our team was keen to review financial and sales data to see the ultimate impact of COVID-19 on our portfolio. Today, we are releasing the insights we gleaned from this review.

Before we dive into these metrics, it’s important to note the macro trends that continue to affect businesses’ behavior. For example, in April when the federal government introduced $600 per week unemployment insurance, sales for brands in our portfolio jumped 24% vs the prior two week period. The amount and duration of this stimulus program are currently uncertain, leaving many unemployed Americans reluctant to continue spending.

During April and May when uncertainty around the economy reopening was at its peak, brands tightened budgets by reducing headcount, decreasing ad spend, and general administrative expenses. This resulted in significantly lower operating expenses.

With E-Commerce first brands reducing their ad spend, cost of customer acquisition dropped significantly in April by an average of $7 vs. March, and another $3.5 in May. With fewer dollars spent, brands were driving higher profit.

Online sessions grew 96% across our portfolio in Q2 2020 — indicating a direct correlation between stay-at-home orders and time spent on the Internet. Notably, tracking online sessions as opposed to unique monthly visitors (UMV) is a better index of a customer’s buying intention because each session presents a distinct, independent shopping event.

Across all categories, U.S. e-commerce sales will jump approximately 18% year over year in 2020, according to a June TechCrunch report. Assembled Brands’ portfolio companies grew 118% in the second quarter of 2020 as compared to the same period in 2019.

Given the metrics discussed above, it’s no surprise that many of these brands are trending towards profitability. The confluence of these changes led to a significant increase, 3x, in portfolio brands generating operating profit.