Prospectus Summary
This summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all the information that you should consider before buying shares in this offering. You should read the entire prospectus carefully, including our consolidated financial statements and the related notes included elsewhere in this prospectus.
Gaiam is a lifestyle company providing a broad selection of information, products and services to customers who value natural health, personal development and renewable energy. We offer our customers the ability to make purchasing decisions based on these values while striving to provide products at prices comparable to conventional alternatives. Our direct customer base is 80% female and 70% college-educated, has a median age of 44 and has an average annual household income of approximately $60,000.
The Gaiam lifestyle brand was built around our ability to continuously develop content that establishes Gaiam as an authority in the Lifestyle Of Health And Sustainability (LOHAS) market. Our content provides solutions that improve quality of life, promote personal development and protect the environment. It also forms the basis of our proprietary products, on which we realize our highest margins, and drives demand for parallel product and service offerings. We sell our content in the form of television broadcasts, on-demand visual media programming, DVDs, videotapes, music CDs, books and other media. We also provide content through our catalogs, on the internet, at point of purchase and as part of the packaging for our products. Our content together with the Gaiam brand creates barriers to entry for competitors.
We market our products and services direct-to-consumers and business- to-business through five sales channels: our catalogs, the internet, retailers, media and corporate accounts. Our products are sold by leading retailers including lifestyle stores such as Discovery Channel Stores and The Walking Company; women's beauty stores such as Ulta and Origins; sporting goods chains such as Sports Authority and Big 5; home furnishing stores such as Bed, Bath and Beyond; natural food stores such as Whole Foods Market; book stores such as Borders and Barnes & Noble; music stores such as Musicland and Wherehouse Music; sporting good stores such as Dick's and mass merchants such as Target, Kohl's and Wal-Mart; and e-tailers such as Amazon.com. A number of our retailers display our products in store-within-a-store Gaiam lifestyle shops. We believe we have an opportunity to become the single source solution for LOHAS products for our retail accounts. Our media channel includes television broadcast, on- demand visual media programming coverage to more than 600,000 hotel rooms in North America, video streaming, video tapes, DVDs and three music labels. Our media partners include the Discovery Channel, Universal Studios and On Command. Our corporate account customers include The White House, NASA, Disney, Sony, AT&T, Mercedes Benz, the U.S. Departments of Energy and Defense and the Government of Brazil. We distribute our products in each of these sales channels from a single fulfillment center.
Gaiam has a highly centralized, scaleable business model. Gaiam's operations are vertically integrated from content creation, through product development and sourcing, to customer service and fulfillment.
The LOHAS market, which represented $227 billion in sales in 2000 according to Natural Business Communication, consists of five main sectors:
. Sustainable Economy. Renewable energy, energy conservation, recycled goods, environmental management services, sustainable manufacturing processes and related information and services.
. Healthy Living. Natural and organic foods, dietary supplements, personal care products and related information and services.
. Alternative Healthcare. Health and wellness solutions and alternative health practices.
. Personal Development. Solutions, information, products and experiences relating to mind, body and spiritual development.
. Ecological Lifestyles. Environmentally friendly cleaning and household products, organic cotton clothing and bedding, and eco-tourism.
Gaiam provides lifestyle product solutions for all segments of the LOHAS market. We offer solutions for a sustainable economy such as renewable energy systems, energy efficient lighting and products made from recycled materials; healthy living solutions such as nutrition content, air and water filters and personal care items; alternative healthcare solutions such as back and neck care products, stress relief and wellness information; personal development solutions such as mind-body fitness information, fitness accessories and performance wear; ecological lifestyle solutions such as natural cleaners, organic cotton bedding and bath products and organic cotton clothing.
We intend to pursue the following strategic initiatives in order to continue to grow our business and serve the LOHAS market:
. Strengthen Our Lifestyle Brand . Capitalize on Our Multi-Channel Approach . Expand Our Proprietary Product Selection . Broaden Our Content Through Growth of Gaiam Media . Complement Our Business with Selective Strategic Acquisitions From 1996 to 2000, our revenues increased from $14.8 million to $60.6 million. Our direct customer file has increased from 300,000 at the end of 1996 to approximately 1.7 million at the end of May 2001. Our retailer channel grew from its inception in 1998 to 25,500 stores at the end of May 2001.
The name Gaiam is a fusion of the words "Gaia," the name for Mother Earth in ancient Greece, and "I am." Gaiam was founded in Boulder, Colorado and organized as a Colorado corporation on July 7, 1988. Gaiam's principal office is located at 360 Interlocken Blvd., Broomfield, Colorado 80021, and its telephone number is (303) 222-3600.