This week, a look at Studs’ new elevated product and store concepts. Plus, when is fundraising necessary? Beauty leaders discuss. Scroll down to use Glossy+ Comments, giving the Glossy+ community the opportunity to join discussions around industry topics.
As luxury experiences turbulence, 5-year-old ear-piercing company Studs edges into the market with an elevated product line and a “fancy” new pop-up.
On May 9 in New York City’s SoHo neighborhood, Studs will open Fancy Studs, a three-week store exclusively featuring fine jewelry. More specifically, it will sell and offer piercings of 14-karat gold earrings featuring lab-grown diamonds priced at $150-$320. Piercing services will start at $35. Though Studs has 22 stores and an e-commerce site, Fancy Studs will be the company’s exclusive sales channel for the lab-grown diamond line. Studs’ core product assortment ranges in price from $18-$150 for a single earring.
“I wouldn’t characterize it as luxury, so I don’t think it’s subject to the declines we’ve seen [in the luxury industry],” said co-founder and CEO Anna Harman. “It’s higher-end for us, but it’s not high-end in the world. In some ways, it should be called Fancier Studs.”
Studs, which has raised $30 million since its launch in 2019, has experienced continued year-over-year revenue growth, with a 35% boost in 2023. According to a representative, the company has spent less than 5% of its revenue on marketing, with foot traffic and word-of-mouth serving as its top referral sources. Before Fancy Studs closes its doors on May 24, it is expected to hit the 1-million customer mark based on its number of orders. It has no plans to fundraise in the near future.
Fancy Studs’ opening was prompted by customer data showing a desire for a premium assortment from the brand, said co-founder and chief brand officer Lisa Bubbers. On the higher end of the spectrum, Studs currently sells a limited variety of earring styles that are 14-karat gold plated and feature pavé-set cubic zirconia stones. Bubbers and Harman expect that existing Studs shoppers will seek out Fancy Studs, plus the store will work to draw new-to-the-brand and slightly older consumers, including tourists. It’s situated in a high-foot-traffic location near a Ladurée and Happier Grocery. Studs solely sells earrings and piercing services.
“What Anna and I want and what we’re seeing a potential customer [gravitate toward] is a lab-grown diamond white-gold and yellow-gold piercing experience with [styles] that aren’t $2,000, but they’re also not titanium or [gold] plated or C.Z. jewelry,” Bubbers said. “This is our version of a fine premium experience.”
She added, “Lab-grown diamonds are making diamonds so much more accessible, and they fit with our ‘masspirational’ [focus]. You could get a couple of piercings and beautiful jewelry and leave, spending $300. That’s an investment, but it’s by no means a $5,000 handbag.”
The name “Fancy Studs” is in keeping with the brand’s fun, irreverent approach to marketing and will be limited to the pop-up, Bubbers said. Inspired by both a Roman arcade and an art installation, the store’s design — by Brooklyn-based Familiar Stranger, working with Overnight production agency — is unique and more feminine than other Studs locations. New elements include “a minty green palette and a bit of patina,” yet brand signatures including “archway work and a lot of LED and neon” are included, she said. Existing team members will run the store.
Studs originally entered the market with a store in Soho, which quickly gained buzz for its regular “it” girl visitors including Karlie Kloss and Kaia Gerber. The company has since continued to roll out locations across the country and is set to hit 30 stores by the end of the year. Its next store will open in Atlanta next week, followed by locations in NYC’s Meatpacking District, San Diego and Boston. At the same time, the company’s Studs on Wheels mobile pop-up has delivered its popular concept of “earscaping” to locations including the UCLA campus and BravoCon. Conch piercing is among ear-piercing trends gaining traction, Bubbers said.
Considering the influencer effect on Studs’ success, Harman said the company has made a habit of inviting big local names to its stores and will also do so for Fancy Studs. “However, you don’t know who’s coming until they come,” she said.
In addition, the brand will market the store through customer emails and posts on Instagram, where it has more than 330,000 followers. It will be positioned as “a fun spring activation,” Bubbers said.
The ear-piercing market has expanded since options were confined to kids-focused, mall-based Claire’s and tattoo shops. For its part, Claire’s has undergone a transformation inclusive of a new focus on retailer partnerships. For its fiscal 2021, it reported $1.4 billion in global net sales. There’s also Rowan, specializing in ear piercing by licensed nurses, which is set to have more than 60 stores by the end of 2024. Like Studs, it launched in 2019 and has raised around $30 million. In addition, several established retailers without a piercing focus, including Ulta Beauty and Five Below, have rolled out the service. According to Grand View Research, the global ear-piercing market was worth $1.2 billion in 2020 and was expected to grow at a compound annual growth rate of 7.5% from 2021-2028.
But even more so, the lab-grown diamond market is booming. Jewelry brands that have entered the market in the last six months include Kendra Scott, Jennifer Fisher and Mejuri.
“We’re looking at what kind of customer comes in and how much they spend,” Bubbers said, regarding the pop-up. “For us, 1 million customers signifies just how scalable Studs is and how much product-market fit it has. … As we look to the future, we’re [evaluating] how to meet all earscaping demands, and we think lab-grown diamonds will be part of that equation.”
When to fundraise, according to beauty leaders
For last week’s Beauty Leaders Dinner held in Los Angeles, Glossy and Listrak gathered top executives from some of beauty’s most influential brands for an evening of discussion around current opportunities and challenges in the industry. At one point, all talk turned to fundraising — specifically, whether or not brands should go there if they don’t have to. Edited highlights from the conversation are below.
The challenge:
“We’ve been operating for 14 years through retention, organic growth. We have not raised any money and I did not come from a wealthy background. We’ve grown one product, one sale, one customer at a time. Through Ulta, Sephora and Anthropologue, we have great distribution and great sales. But the pressure to raise money is real – from the industry. The industry is growing fast, it’s moving, and in order to stay relevant and keep up with marketing demands, I’m always wondering how much [money] we need and how much is enough. … Today, 100% growth is nothing. You need 300% growth to keep up with the standard. But is that necessary?”
What the leaders said:
“But you’re self-sustaining, which is awesome. … You’re owning your own destiny.”
“It depends on the goals for the business and where you are in the life cycle of the brand. If you wanted to exit tomorrow and you wanted to supercharge something, maybe [fundraising] would be worth that. If your end goal is an exit with a certain dollar amount, multiples are less important than the dollar amount. You could walk away with $100 million in your pocket with a smaller sale, or you could walk away with $100 million with the messiest cap table on the planet.”
“It also depends on how long you want to be in business. I would not bow to any pressure from the outside. It’s your company, your equity, your life. I wouldn’t take any money if I didn’t have to because money comes with strings: expectations, deliverables, board meetings. And [investors] are lovely when things are going well, but things change — no matter what. Because they have a goal: a liquidity event. So you might end up making decisions that may not be best for the business but are best for that particular goal. It‘s your money and you are in control. If you don’t need it, keep it.”
“As a VC-backed business, we’re really envious that you’re self-sustaining right now. That is incredible. The one caveat is: How long do you want to be in it? If you want to exit the business in five years, you need to show that speedy growth and it’s hard to show that without capital.”
“And that exit isn’t guaranteed, either. It depends on so many more factors outside of growth: What does your pipeline look like? What retailers are you in? There are so many variables that go with that.”
“It’s easy to take that money and spend it in your P&L and lose it by growing your topline, but you’re hurting your value. You should be 15-25% EBITDA. It doesn’t really matter the size; as long as you can maintain that EBITDA number and continue to grow, that’s a healthy business.”
“And it depends who you’re selling to. There are a lot of legacy companies that will start talking to you at the $50 million-$80 million mark and some that won’t. So get clear on the vision of who you want to sell to and when you want to sell, and that will lead you in the right direction.”
“I’ve been with two brands that have reached $80 million with no investment. The brands that have found a sweet spot between what they want for their brand and what the customer wants from their brand are the brands that have been able to supercharge [their growth] to hit that level.”
“Also, if you have an $80 million business and that EBIDTA, just take money off the table. You don’t have to sell.”
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