Kendra Scott Looks for New Investor
Kendra Scott is ready for a new partner.
The Austin, Texas-based accessories retailer is working with bankers to bring in a fresh investor.
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“As a founder-led growth company with private equity investment, at times of success we explore for new private equity partners that will help elevate the brand for future phases of our business,” chief executive officer Tom Nolan told WWD in a statement.
Berkshire Partners took a minority stake in Kendra Scott in a 2017 deal that valued the company at about $1 billion, but is now looking to bow out. The timing makes sense as private equity companies typically look to hold investments for three to five years, although in this case, the process ran headlong into the COVID-19 pandemic.
Berkshire did not immediately respond to a query on Thursday.
Scott, who founded the company in a spare bedroom with $500 of seed money in 2002, is still the company’s largest shareholder and remains active in the business as executive chairwoman and chief creative officer.
She is heavily involved in the company’s designs, new products and new businesses, including the January launch of the Yellow Rose by Kendra Scott brand, which now has a shop-in-shop in the brand’s flagship in Austin’s South Congress neighborhood.
Scott handed over the position of CEO in 2021 to Nolan, who had been president and has helped continue to grow the company.
Kendra Scott has a total of 134 stores, with plans to open six more this year, for a total of nine new doors in 2023. Sales have been growing by a percentage in the mid-teens since 2020 and are on track to hit roughly $500 million this year, representing nearly double-digit growth for 2023.
Fifty-five percent of the top line comes from retail with 30 percent from e-commerce and 15 percent from wholesale. The company continues to open more stores, build on a wholesale partnership in Mexico and is looking to open more international wholesale accounts.
The philanthropically minded accessories brand is known for its in-store events, which have helped it cultivate especially close relationships with its customers.
In a 2021 interview with WWD, Nolan, who previously held positions at Ralph Lauren and Condé Nast, said he is guided in part by a finely tuned sense of just who was in charge.
“The customer is our boss and she ultimately signs all of our paychecks,” Nolan said as the world was opening back up from the pandemic. “As we move forward, we have to continue keeping our customer and her shopping preferences top of mind — meeting her where she is has always been our focus.
“At Kendra Scott, we’ve built a strong and loyal customer connection through our philanthropy efforts and the 15,000 charitable organizations we partner with across the country,” the CEO said.
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