Perfect Moment Ltd. 10-K

ITEM 1. BUSINESS Overview Perfect Moment Ltd., a Delaware corporation (“Perfect Moment,” “we,” “our,” or “us”), is a high-performance, luxury skiwear and lifestyle brand that fuses technical excellence with fashion-led designs. We create apparel and products that feature what we believe is an unmatched combination of fashion, form, function and fun for women, men and children. The idea for the Perfect Moment brand was born in Chamonix, France in 1984, when the professional skier and extreme sports filmmaker, Thierry Donard, began making apparel for his team of free-ride skiers and surfers. Donard used his experience to create designs that were characterized by quality, style and performance to enable his athletes to achieve their perfect ski-run or perfect wave-ride: that “perfect moment.” His designs – combining high performance materials with daring prints and colors – were inspired by his team of free-ride skiers and surfers. Today, the brand continues to draw on its rich heritage of performance garments and statement designs. Retro-inspired vivid and bold color palates complement technical fabrics to deliver fashion, form and function for women, men and children. Initially known for its on-and-off the slopes skiwear, in 2016 we developed a summer range inspired by the island of Ibiza to bring its unique style to swimwear and activewear. We believe our bold fashion and technical proposition resonates with the modern fashion-conscious consumer that sees value in authentic European heritage and statement-design tailored for an active and healthy lifestyle at a compelling quality-to-value price point. Our Industry We operate at the intersection of the global luxury skiwear, outerwear, and active lifestyle markets, which are large, resilient, and undergoing structural growth. Our core addressable market segments benefit from rising demand for premium, functional fashion with a distinct brand identity. Luxury Skiwear and Outerwear The global luxury skiwear market was valued at $1.6 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 6.35%, reaching $2.4 billion by 2028, according to EIN Presswire. This market serves a niche yet affluent demographic, typically located near ski regions or with a strong interest in recreational winter sports. This consumer group prioritizes both fashion and technical performance and has demonstrated consistent demand for luxury offerings in alpine apparel. The global luxury outerwear market, a larger and more geographically diverse category, was valued at $15.9 billion in 2022 and is expected to grow at a CAGR of 6.51%, reaching $23.2 billion by 2028 (Research Reports World). Within this segment, we believe consumers are increasingly seeking heritage-driven, functional outerwear that delivers both performance and aesthetic appeal, especially in urban and lifestyle contexts. Lifestyle and Athleisure In addition, Perfect Moment is also targeting the broader leisure markets for swimwear, activewear and lifestyle products. Both the global luxury ski wear market and global luxury outerwear market share some key consumer demographics and purchasing behavior with the broader leisure markets. We believe these markets stretch beyond skiing and winter sports to a range of healthy and athletic pursuits, with products increasingly being worn as part of a broader day-to-day lifestyle statement. We also believe the growth of this market goes hand-in-hand with broader cultural shifts, such as a greater emphasis on health, exercise and well-being, as well as a relaxation in dress codes at work and for social occasions. Based on the characteristics of these respective markets, we believe Perfect Moment has the right brand profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant share. Market Trends We believe that several macroeconomic and demographic shifts are shaping the future of the global luxury apparel industry. These trends support our growth strategy and validate our digital-first, lifestyle-oriented brand positioning: ● Acceleration of Online Luxury Sales : The luxury industry has historically lagged behind other retail sectors in digital adoption; however, this dynamic is shifting rapidly. According to Bain & Company, online sales accounted for 22% of global luxury purchases in 2021 and are expected to represent between 32% and 34% by 2030. This channel expansion is being driven by evolving consumer preferences and increased digital investment by luxury brands. As a digitally native brand, we believe Perfect Moment is well-positioned to capitalize on this shift. ● Generational Demographic Transition : The spending power of Generation Y, Generation Z, and Generation Alpha continues to increase. According to Bain, these generations accounted for all of the luxury market’s growth in 2022 and are expected to comprise 80% of total global luxury spending by 2030. These consumers demand authenticity, digital engagement, and values-driven branding—all core elements of our business model. ● Geographic Expansion of Luxury Demand : Historically, the luxury market has been concentrated in North America and Europe; however, demand is shifting eastward. Mainland China is expected to become the world’s largest luxury market by 2030. In November 2024, we conducted a limited market entry in China through Tmall and are currently evaluating joint venture structures to support longer-term expansion in the region and capitalize on emerging consumer demand. 1 Our Brand: Heritage and Evolution Over the last 40 years, the Perfect Moment brand has evolved from its origins as a small business founded by Thierry Donard—producing apparel for his team of free-ride skiers and surfers—into a global luxury lifestyle brand. Built on a foundation of luxurious, distinctively designed, and high-performance ski apparel, we have continued to expand the brand into new categories and across multiple seasons while maintaining our heritage of technical excellence and bold aesthetics. This foundation has enabled us to extend our product offering beyond core skiwear into surfwear, swimwear, activewear, lifestyle apparel, and accessories. We apply the same disciplined approach to design, product development, and merchandising across all categories, ensuring that each item aligns with our brand’s identity—fusing function with style, and performance with fashion. In parallel, we have expanded our distribution beyond a network of regional distributors to include a curated group of premium multichannel retail partners and a growing direct-to-consumer (DTC) business. This strategic evolution in both product and channel mix has positioned Perfect Moment as a year-round brand with growing relevance across sport, leisure, and lifestyle use cases. We remain committed to offering apparel that reflects the demands of alpine performance while meeting the expectations of today’s fashion-conscious global consumer—delivering a distinct brand experience that resonates on the slopes, in the city, and everywhere in between. Competition Perfect Moment competes in the global luxury apparel and outerwear market, which includes a range of premium lifestyle, sportswear, and heritage brands. Our direct competitors include both luxury skiwear specialists and broader luxury outerwear players. Most competitors tend to specialize in either technical performance or high fashion. Perfect Moment is uniquely positioned at the intersection of these two pillars, offering products that combine elevated design with technical integrity. This dual positioning allows us to differentiate ourselves from heritage performance brands that prioritize function over form, and from fashion brands that lack alpine credibility. Our brand also competes with emerging DTC brands focused on active lifestyles, as well as traditional wholesale-driven outerwear players. We believe our distinct heritage, design philosophy, and rapidly scaling digital footprint allow us to compete effectively across both luxury and performance categories. 2 Our Strengths ● Balanced Fashion and Performance Positioning . Perfect Moment’s affordable luxury brand positioning bridges the gap between pure fashion and high-performance apparel. Our products integrate technical design with elevated aesthetics, enabling both alpine functionality and everyday style. This dual focus differentiates us from many competitors who are more narrowly focused. ● Heritage-Driven Brand Identity . Founded in Chamonix in 1984, our brand draws from over four decades of ski and surf heritage. This foundation underpins our credibility in luxury outerwear and appeals to a global consumer base seeking authenticity and timeless design. ● Direct-to-Consumer and Selective Wholesale Distribution . We operate a digitally native, direct-to-consumer ecommerce platform that allows us to control the customer experience, optimize pricing, and drive margin expansion. Our wholesale partnerships are selective and aligned with our premium positioning, providing additional reach while preserving brand integrity. We complement these channels with short-term physical retail activations to test new markets and deepen engagement. ● Scalable Operating Model . With in-house control over design and development and a flexible, asset-light manufacturing base, we are able to scale seasonally and geographically while maintaining margin discipline. ● Experienced Leadership. Our senior team brings leadership experience from global apparel and lifestyle brands, guiding our disciplined growth strategy with an entrepreneurial approach. ● Established Partner Relationships . As of March 31, 2025, we have two luxury marketplace partners, Farfetch and Amazon Luxury, and 160 wholesale partners, of which 16 are luxury department stores (including those we believe are the most sought-after and prestigious names in the fashion industry), 18 operate as exclusively online multi brand retailers and 90 are respected specialty stores with a focus on either sports or winter goods, which is key to our branding strategy. ● Strategic Retail Expansion: . We are testing physical retail through short-term, low-risk formats such as pop-up stores and shop-in-shops, with plans to scale selectively based on performance. Our Business Strategy and Product Perfect Moment sits at the intersection of three large and growing markets (luxury ski apparel, premium outerwear and lifestyle). Based on the characteristics of these respective markets, we believe we have the right brand profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant market share. We believe we are also well-positioned to drive sustainable growth and profitability by executing on the following strategies: Grow Brand Awareness and Attract New Customers Expanding brand awareness and deepening customer engagement remain central to our growth strategy. While Perfect Moment has built strong loyalty among existing customers and achieved meaningful global traction, we continue to see significant opportunity in underpenetrated and emerging markets. Rooted in our rich ski heritage, Perfect Moment appeals to a global audience that values both high-performance apparel and elevated design. Skiing’s association with affluence and lifestyle has enabled us to position the brand as aspirational, particularly on social media, where our visual identity and storytelling strongly resonate. By combining our signature aesthetic with high-impact marketing, celebrity endorsements, influencer partnerships, editorial features, and collaborations, we have crafted a compelling brand narrative that aligns with the values of our target audience. 3 This brand narrative has translated into meaningful global media presence. In FY2025, we achieved record-breaking brand visibility, with global media coverage and social traction significantly outpacing prior years. Notable achievements included: Metric FY2025 FY2024 YoY Change Global UVPM (Unique Visitors per Month) 16.6 billion 8.0 billion +108% Total Social Audience (KOLs) 934 million 480 million +95% Social Audience During Ski Season (Q3–Q4) 597.1 million 297 million +101% Global Print Circulation 25.6 million 12.4 million +106% Celebrity/Influencer Posts Multiple including Priyanka Chopra Jonas, Anitta, Miranda Kerr, and more Similar tier but lower frequency Significant increase Key Media Features Vogue, Harper’s BAZAAR, ELLE, WWD, Tatler Vogue, WWD, GQ Expanded global reach The recent announcement of our strategic collaboration with Alpine generated additional momentum, reaching over 1.1 billion in global PR (UVPM) and delivering high-impact social media performance across both brand channels. These results reinforce our position at the intersection of luxury performance and lifestyle, and demonstrate the effectiveness of targeted collaborations in amplifying reach and engagement. Customer Acquisition and Market Expansion Strategy Attracting new customers while deepening engagement with existing ones remains a foundational pillar of our long-term growth strategy. Perfect Moment has built a loyal customer base and strong brand equity in core markets such as the United States, the United Kingdom, and the European Union, while still seeing significant untapped potential across emerging regions and underpenetrated demographics. In FY2025, we expanded outreach across continental Europe and initiated a market test in China via Tmall. We are actively exploring deeper market penetration opportunities, including potential joint ventures or partnerships, particularly in China where we seek to balance growth potential with local market complexities. Our international growth strategy is closely integrated with our marketing and customer engagement approach. We leverage our brand’s unique heritage—rooted in performance-driven ski apparel with a distinctive retro-modern aesthetic—to connect with affluent, style-conscious consumers who engage deeply with lifestyle content. Skiing remains an aspirational category, and our ability to tell culturally relevant, visually compelling stories has been central to growing awareness in new markets. To support customer acquisition and global reach, we execute a multi-channel marketing strategy that blends aspirational brand storytelling with data-driven performance marketing. This includes premium editorial placements, influencer activations, celebrity collaborations, and visibility in luxury destinations, as well as robust paid social, search engine marketing (SEM), SEO, programmatic media, and retargeting campaigns. Our proprietary data and customer insights allow us to refine targeting, optimize customer acquisition costs, and improve return on advertising spend (ROAS). Looking ahead, we plan to further invest in digital community development by enhancing engagement across both core and emerging social platforms and scaling our network of social media ambassadors. In parallel, we are committed to offering a localized customer experience in priority markets through language-specific content, local currency pricing, and improved shipping and distribution capabilities. Complementing our digital expansion, we are developing a selective network of Perfect Moment-owned retail locations in key global cities. These physical touchpoints are designed to serve as immersive brand destinations that foster loyalty and drive community engagement. This holistic, multi-channel approach—anchored by strong creative execution, performance discipline, and a globally resonant brand voice—remains central to our strategy for customer acquisition, market expansion, and long-term value creation. Elevating Brand Equity and Market Positioning We continue to enhance brand desirability by deepening strategic partnerships and cultivating cultural relevance through collaborations with globally resonant brands. These alliances are complemented by curated cultural touchpoints designed to reinforce the brand’s aspirational positioning. To further strengthen brand exclusivity, we are expanding access to premium, invitation-only experiences, limited-edition product capsules, and bespoke VIP programs. These initiatives are designed to reinforce scarcity-driven value and deepen emotional affinity with our most engaged customer segments. Our brand amplification strategy includes highly selective alignments with globally recognized influencers and tastemakers, as well as targeted celebrity endorsements. These efforts are bolstered by high-visibility editorial placements in tier-one publications. 4 Enhancing Product Storytelling and Technical Credibility We are investing in elevated storytelling formats to articulate our product innovation and craftsmanship. This includes the use of advanced content technologies, such as CGI and AI-powered educational tools, to bring our product narratives to life across digital channels. We continue to validate the performance and functionality of our products through strategic endorsements by elite athletes, subject matter experts, and professionals in relevant fields. This expert-led validation reinforces product credibility and supports the brand’s premium technical positioning. Accelerating Customer Retention and Lifetime Value We are launching a high-touch VIP loyalty program designed to reward our most valuable customers with elevated services including personal styling, concierge shopping experiences, and curated ski retreats. This program aims to drive repeat engagement and strengthen brand loyalty. In addition, we are deepening customer relationships through exclusive community engagement initiatives, which focus on fostering a sense of belonging and shared identity among our luxury consumer base. These efforts are designed to support long-term customer retention and maximize customer lifetime value. Enhance Our Wholesale Network Although in the next five (5) years we will be mainly focused on accelerating digital growth and our direct-to-consumer channel, we still intend to continue broadening customer access and strengthening our global foothold in new and existing markets by strategically expanding our wholesale network and deepening current relationships. In all of our markets, we have an opportunity to increase sales by adding new wholesale partners and increasing volume in existing retailers. Additionally, we are focused on strengthening relationships with our retail partners through broader offerings, exclusive products and shop-in-shop formats, which are dedicated spaces within another company’s retail store on a short-term rental basis. We believe our retail partners have a strong incentive to showcase our brand as our products drive customer traffic and consistent full-price sell-through in their stores. Broaden Our Product Offerings We continue to develop new product categories to engage customers across all seasons and expand our share of wallet. These include: ● Fall/Winter Lifestyle : Less technical but equally premium outerwear, loungewear, and accessories. ● Spring/Summer Expansion : Activewear, surfwear, swimwear, and transitional layering pieces. ● Multi-Seasonal Lifestyle Collection : Launching a new lifestyle collection to complement our core skiwear line, designed to support year-round customer engagement. ● Accessories Expansion : Investing in the growth of our accessories business, working with expert vendor partners to capture commercial uplift and enhance brand exposure. ● Style Expansion : Increasing annual style count from approximately 75 styles to 220–240 styles. ● Pricing Architecture : Establishing a Good / Better / Best pricing model to improve value perception, broaden customer access, and support luxury tier collaborations. We believe this strategy supports year-round engagement, reduces seasonal revenue concentration, and enhances gross margin through full-price, high-margin items. FY2025 marked the launch of our first spring/summer capsule under this strategy, with additional lines planned based on customer response and inventory performance. Establish Perfect Moment Owned Physical Retail We are actively redefining the après-ski lifestyle as a distinct luxury category, transcending its traditional association with winter sports. Our product strategy includes broadening the après assortment to incorporate versatile knitwear, accessories, and transitional outerwear suited for both urban and alpine environments. To support this repositioning, we are deploying high-impact experiential activations, including luxury pop-up stores and immersive brand experiences in strategic mountain and resort locations. These initiatives are designed to increase customer engagement, drive retail conversion, and extend our physical brand footprint in high-value markets. In FY2024 and FY2025, we tested temporary physical retail spaces to evaluate customer response and operational learnings. In FY2026, we plan to open two concession locations in high-profile markets. Our physical retail rollout is focused on near-term milestones and aligned with our broader brand experience goals. This approach is designed to strengthen customer touchpoints and deliver a consistent luxury retail experience across channels. 5 Other Strategies to Improve Margin We intend to focus on the following other strategies to improve our margin: ● Shift towards direct-to-consumer revenue (such as ecommerce and physical retail). We expect that rebalancing from wholesale to direct-to-consumer, coupled with the other margin initiatives, would result in a double-digit percentage point improvement in our gross margin over time, driven by favorable channel mix. ● Reducing product range within skiwear. We believe the current range offers too much choice, resulting in reduced economies of scale and higher levels of markdowns and discounts. Rationalizing the range is expected to improve both margin and sell-through. ● Review and modify supplier base. We expect our supplier base to evolve as we source fabrics and trims more efficiently and introduce new finished goods suppliers with better commercial terms. This includes shifting production to regions with lower labor costs or more favorable duty rates, such as the EU, UK, or Vietnam. ● Review and revise price positioning. We are introducing more structured pricing discipline and processes, with a focus on assessing margin by product, country of manufacture, and country of sale. We believe our industry and customer segment exhibit relatively inelastic demand, allowing for modest annual price increases in line with luxury market expectations. These pricing strategies will support margin expansion as we grow. ● Focusing on reducing costs relating to crossing borders. As a global brand, Perfect Moment incurs significant costs from freight, duty, couriers, and other logistics fees. We are focused on improving cost efficiency by shifting more volume to sea freight from air freight, relocating production to lower-duty countries, and reducing broker and customs-related costs through improved planning and process. ● Implementing a Good / Better / Best pricing model. This tiered structure enhances customer value perception and supports product and price accessibility across a broader consumer base. It also enables luxury-tier expansion for high-profile collaborations and licensed projects. These margin enhancement initiatives are central to our efforts to increase profitability, streamline operations, and create a scalable business model that can support long-term growth and brand equity. Operations and Supply Chain Perfect Moment’s global supply chain strategy is designed to support premium quality, timely delivery, and scalable growth across all major product categories. We work with a curated network of manufacturing partners in Europe and Asia, selected based on their technical expertise, material sourcing capabilities, and alignment with our brand values. We have implemented a hybrid sourcing model that balances high-performance technical partners for outerwear with more agile suppliers for lifestyle and accessory categories. This approach enables product differentiation while supporting cost-efficiency and flexibility. Our supply chain is structured around regional fulfillment centers that serve North America, the UK, and continental Europe. We also produce a portion of our products in China, alongside our established manufacturing partnerships in Europe and broader Asia. This setup reduces lead times and supports localized customer experience. In fiscal 2025, we began implementing initiatives to improve margin by consolidating shipments, introducing duty optimization measures, and shifting a portion of logistics from air to sea freight. As part of these efforts, we have also begun assessing the impact of international tariffs on sourcing decisions, which will be further discussed in the Risk Factors section of this Annual Report. Looking forward, we aim to further diversify our supplier base to reduce concentration risk, optimize raw material procurement, and improve inventory turnover through tighter integration between merchandising, production, and logistics planning. 6 Technology Technology is at the core of our business strategy, powering our operational capabilities and the sustainable scalability of our platform. We believe that continuous investment in our technology has given us a competitive advantage and enabled fast innovation. Our technology platform with MACH architecture is designed to provide Perfect Moment with longer term ease of integration, stability, performance, and scalability based on three main components: (1) Service Oriented Architecture facilitates design and maintenance of partner integrations: ● Key enabler of omni-channel ● Able to cater to evolving business needs ● Decreases Total Cost of Ownership and increases efficiency (2) Cloud-focused strategy designed to: ● Improve scalability and cost efficiency ● Allow for better accessibility and performance in markets around the worlds (3) Headless Architecture allows: ● Rapid build of differentiating user experience without impact to the backend systems ● Innovative new user experiences build on headless building blocks ● Evolution of front-end over time to take advantage of new technologies and innovations Trademarks and Other Intellectual Property We protect our intellectual property through a combination of trademarks, domain names, copyrights, design rights/design patents and trade secrets, as well as contractual provisions and restrictions on access to our proprietary technology related to our ecommerce platform. Our principal trademark assets include the trademark “Perfect Moment,” which is registered in the United States and targeted foreign jurisdictions, as are our logos and taglines. We have applied to register or registered many of our trademarks in the United States and other jurisdictions in all classes relevant to our business, and we will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. We actively oppose and defend our position on the trademark registers and subscribe to a trademark watch service for our key assets. Further we subscribe to an online monitoring system to search for infringements of our intellectual property rights and, in addition, act on any reported to us by customers or employees. We are the registered holder of multiple domestic and international domain names that include “perfect moment” and similar variations. We also hold domain registrations for many of our product names and other related trade names and slogans. We own or have control over relevant social media handles which contain our key assets. In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with our employees, consultants, contractors and business partners. Where appropriate we enter into relevant license agreements to allow others to use our Intellectual Property or where we need permission to use Intellectual Property of third parties. We further control the use of our proprietary technology and intellectual property through provisions in both our customer terms of use on our website and the terms and conditions governing our agreements with other third parties. Government Regulation In the United States and the United Kingdom and in the other jurisdictions in which we operate, we are subject to labor and employment laws, laws governing advertising, privacy and data security laws, safety regulations and other laws, including consumer protection regulations that apply to retailers and/or the promotion and sale of merchandise and the operation of stores and warehouse facilities. Our products sold worldwide are subject to tariffs, treaties and various trade agreements as well as laws affecting the importation of consumer goods. We monitor changes in these laws, regulations, treaties and agreements, and believe that we are in material compliance with applicable laws. 7 Licenses, Certificates and Approvals The Company has obtained all licenses, certificates and approvals required for carrying on its business activities during the two fiscal years ended March 31, 2025 and 2024. Employees and Human Capital Resources As of March 31, 2025 and 2024, we had a total of 50 and 39 full-time employees, respectively, as well as a limited number of temporary employees and consultants. Our employees are neither unionized nor covered by collective bargaining agreements, and we consider our current employee relations to be good. Website and Available Information We file annual, quarterly and current reports; proxy and information statements and other information with the SEC. We also make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all related amendments, available free of charge through our website at www.perfectmoment.com as soon as reasonably practical after they have been filed with the SEC. We also provide to anyone, without charge, copies of the documents upon written request. Requests should be directed to the attention of the Corporate Secretary at our address on the cover page of this Form 10-K. We are an electronic filer. The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, such as us, that file electronically with the SEC.