Madhappy, in the process of building its 14-month-old brand through pop-ups, e-commerce, parties and positive messaging, is seeking to raise outside funding for the first time.

The Los Angeles-based retailer of T-shirts, hoodies, caps, shorts and denim, often adorned with peace signs and feel-good phrases such as “local optimist,” started modestly with a $25,000 investment, according to the partners. Now, it’s in conversations with venture capital firms and private investors for funding to fuel growth and provide expertise in such areas as manufacturing, scaling e-commerce and brand building.

“The $25,000 investment got us going but everything’s been self-funded,” said Peiman Raf, one of the four cofounders of Madhappy. “It made us have to decide what was most important because we couldn’t just produce crazy amounts of inventory. Now, as we look to scale, there’s so many different avenues with the e-commerce. We see international sales growing and then, as far as retailers, we tested it a bit last year (through a collaboration with the now defunct Colette in Paris) but just feel like we don’t have any control over the user experience.

“We’re a super new company so everything changes all the time. We’re still trying to adapt and learn. We have limited experience,” Raf acknowledged, noting that the average age of team members is 22 or 23.

Raf added that Madhappy would be open to taking on two or three main investors with a few smaller ones if they brought the right skills to the table.

The other partners are his brother, celebrity stylist Noah Raf; Mason Spector and Joshua Sitt.

Madhappy on Melrose Place. 

 

Madhappy currently bookends the country with two pop-ups, one that opened May 5 at 136 North 6th Street in Williamsburg, Brooklyn, and another launched June 2 at 8441 Melrose Place in Los Angeles.

The Melrose pop-up (open till July 1) launched with a block party, and in addition to selling the Madhappy line, sells hoodies and hats co-branded with Alfred Coffee, the popular coffee shop on Melrose just across from the pop-up. Alfred Coffee, as well as Bennett’s Ice Cream, are served in the pop-up.

The Brooklyn space (open till Sept. 1) will sell hoodies and hats co-branded with Lucali, the popular pizza restaurant on Henry Street in Brooklyn. The products are scheduled to be unveiled at a private viewing inside the Williamsburg space on July 10.

In another collaborative effort, bikes from tokyobike, a small, independent bicycle company from the Tokyo suburb of Yanaka, are displayed in the Melrose and Williamsburg shops.

Two more Madhappy pop-ups are being planned for December, and the company will have a mural created in Coney Island, Brooklyn by around July 10.

Previously, pop-ups were staged in Aspen, Colo., Los Angeles, and the Meatpacking neighborhood in Manhattan. Typically, they are minimal in display and exude a gallery-like ambience.

“We don’t want to be known as a streetwear brand. We create tangible experiences to curate ourselves as a lifestyle brand and to build long-term customers,” said Sitt, who is the son of Joseph Sitt, chief executive of Thor Equities real estate, which is providing some property on Coney Island for the mural.

“I look at a lot of companies like Glossier and Outdoor Voices [and] how they started to build their communities,” said Raf. “If you notice, they all make a move, whether it’s physical stores or just organizing events. At the end of the day, you can reach the most number of people online, but doing things around communities and areas where you have a lot of customers and supporters is the only way to differentiate. That’s how we’ve tried to think about it in everything we do and I think it was important to keep that frame of reference even though stuff gets harder as you get bigger.”

Madhappy originally began with small releases of sweatshirts bearing the brand’s signature stitch detailing on the hoods in a hearty 14-ounce organic cotton, along with T-shirts and hats. Most of the line is unisex though pieces such as cropped tops and sweatpants specifically for women were recently added.

A Madhappy display. 

The company isn’t ruling out permanent retail, likely in the Los Angeles area given that’s where the company is building new headquarters in downtown’s Arts District. However, it’s still too soon to call that, Raf said.

“We’re only 14 months old so I would say everything is still on the table,” Raf said. “Right now, we love the pop-up model because it allows us to have one retail location but spread out over many cities and over time periods that are really hot. Aspen doesn’t make sense for 11 months of the year but in December it’s one of the hottest places to be for anything.”

“We’re really, really focused on building our community which I think a lot of people say they’re doing, but I think evidence will show that we’re trying to back that up with all of our events, which are completely free,” Raf said. The Melrose block party, he said, drew over 1,000 people outside, with about 100 people in the store at any given time. “If you love the brand, you could support it but we’re just trying to make good associations and happy times, and I think that’ll pay off in the long run.”

“We are making money on the pop-ups, but most of our sales are online,” said Sitt. “It’s about incorporating different collaborative and in-store experiences to curate us as a lifestyle brand.”

Inside the Madhappy pop-up in L.A. 

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