Kendra Scott, an Austin, Texas-based lifestyle brand, is seeking capital to fund its expansion plans, CEO Tom Nolan tells Axios exclusively.
Why it matters: The company has one of the most compelling financial profiles in fashion and accessories and is certain to attract suitors.
Zoom in: It wouldn’t be surprising if Kendra Scott entered into a transaction this year, which would give it “gas” to put on the “fire,” Nolan says.
- “We would make a great public company,” he notes.
- He declined to comment, however, on which options it is exploring, such as a sale or a transfer of shares. Nolan also declined to say if Kendra Scott is working with or interviewing investment banks.
Quick catch up: PE firm Berkshire Partners announced in 2016 plans to acquire a significant minority stake in the business, which valued the company at $1 billion.
- Norwest Venture Partners remained a minority investor at that time.
What they’re saying: “We look at best-in-class public companies and operate that way as a private company,” Nolan says.
- “We are private today and not worried about what the future looks like,” he says.
- “For us to do the things we want to do and achieve, we need capital,” he added. “Right now we have a strong financial balance sheet, low debt, and free cash flow. When/if we need access to different forms of capital, we will evaluate.”
By the numbers: Kendra Scott’s revenue increased nearly 20% year over year to around $500 million, the CEO says.
- It grew EBITDA — already at a healthy margin — by more than 30% last year, he says.
- E-commerce traffic grew 26% year over year, while the company plans to expand its store count from 138 to 200 over the next three years, Nolan says.
- The company has also given back $65 million since 2010 via its philanthropic efforts.
What’s next: Kendra Scott expects sales will continue growing by double digits for the foreseeable future. The company plans to open at least 15 stores this year.
Driving the news: Kendra Scott has introduced new products, including a Southwest-inspired jewelry collection called Yellow Rose.
The latest: Kendra Scott is now offering a lab-grown diamond collection to make fine jewelry more accessible price-wise to its customers, the company said.