Grace and Lace
DEAL
EPISODE SUMMARY
🕓 Air Date: November 22, 2013
Asking For:
$175,000 for 10%
Investor:
Barbara Corcoran
Deal:
$175,000 for 10%
PRODUCT SUMMARY
Grace & Lace transforms ordinary socks into lacy, fashionable statements for women's boots.
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Background Story
Grace & Lace, a company founded by Rick and Melissa Hinnant, hails from the vibrant city of Austin, Texas. Their journey began when Melissa, inspired by a desire for fashionable yet functional footwear, embarked on a creative endeavor to enhance the mundane sock worn under women’s boots. Spending nine hours at the sewing machine, she painstakingly crafted her first pair of lacy, frilly socks. The initial creation garnered immense attention wherever Melissa went, with strangers clamoring to know where they could purchase such unique footwear.
This overwhelming demand prompted Melissa and Rick to test the market by selling the socks online, where they experienced instant success. Rick and Melissa’s background is one of passion and innovation, driven by a shared entrepreneurial spirit. While their journey into entrepreneurship may have been accidental, their dedication and creativity propelled Grace & Lace into a thriving business. Prior to founding Grace & Lace, Rick and Melissa’s experiences varied; however, their shared vision for creating innovative fashion accessories united them in their pursuit of business success.
Based on their experiences and the market demand they encountered, Rick and Melissa recognized an opportunity to revolutionize the sock industry by infusing it with style and flair. Their commitment to quality craftsmanship and their keen eye for fashion trends have positioned Grace & Lace as a leader in the industry, with a loyal customer base and a growing presence in both online and retail markets.
The Product
Grace & Lace specializes in transforming traditional socks into stylish fashion statements. Crafted with intricate lace designs, their socks add a touch of elegance and femininity to women’s footwear, particularly when worn with boots. Made from high-quality cotton, Grace & Lace socks offer a luxurious feel akin to cashmere, ensuring both comfort and style.
The socks are designed to be versatile, complementing various boot styles and outfits, from casual to formal. Their lace detailing adds a chic and sophisticated touch, making them suitable for both everyday wear and special occasions.
Customers can purchase Grace & Lace socks directly from their website or through select retail partners, including over 230 stores where their products are currently available. The price point for a pair of Grace & Lace socks is $34, offering affordable luxury to fashion-forward individuals.
One of the key benefits of Grace & Lace socks is their ability to elevate any outfit effortlessly. Whether paired with jeans and ankle boots for a casual look or worn with a dress for a more formal occasion, these socks add a stylish flair that sets the wearer apart. Additionally, their durable construction ensures longevity, making them a practical and fashionable investment for any wardrobe.
How It Went
The company’s position before Shark Tank
Grace & Lace has demonstrated impressive growth and financial health since its inception. With annual sales exceeding $1 million, the company’s performance reflects strong consumer demand for their unique products. Their profitability is evident from their reported profits, with over $300,000 in profit generated during their peak sales year. The company’s success can be attributed to their strategic partnerships and distribution channels. Grace & Lace has forged partnerships with major retailers like Nordstrom, allowing them to expand their market reach and gain access to a wider customer base. Additionally, their presence in over 230 stores indicates a growing demand for their products in the retail sector.
In terms of funding, Grace & Lace has primarily relied on revenue generated from sales to fuel their growth. This self-sustaining model has enabled them to maintain control over their business operations while reinvesting profits to support expansion efforts. Their customer base primarily consists of fashion-forward individuals who appreciate the unique designs and quality craftsmanship of Grace & Lace products. With a strong online presence and a growing social media following, the company has effectively engaged with their target audience and cultivated brand loyalty.
As for the company’s structure, Grace & Lace is likely organized as a privately held corporation, with Rick and Melissa Hinnant serving as the founders and key decision-makers. Their successful negotiation in the Shark Tank suggests a savvy approach to strategic partnerships and business development, further solidifying their position in the market. Overall, Grace & Lace’s performance reflects a thriving business poised for continued success and expansion.
The Negotiations:
The negotiations in the Shark Tank for Grace & Lace were dynamic and competitive, showcasing the sharks’ interest in the company’s innovative product and impressive sales figures. Rick and Melissa initially sought $175,000 for a 10% equity stake, presenting their business as a thriving venture with over $1 million in annual sales. Robert Herjavec made an offer matching their initial ask, providing the requested funding for the desired equity stake. However, the negotiation quickly escalated as other sharks also presented compelling offers.
Barbara Corcoran proposed $175,000 investment, with half of the amount structured as a line of credit, in exchange for a 10% equity stake. Kevin O’Leary also put forward an offer of $175,000 for a larger 20% equity stake, which would reduce to 10% once the investment was repaid. The founders were faced with a challenging decision, weighing the different offers and considering the strategic value each shark could bring to their company. Ultimately, they chose to accept Barbara’s offer, valuing her experience and vision for the company’s growth.
Barbara’s deal provided immediate funding while also offering the flexibility of a line of credit, aligning with Grace & Lace’s long-term goals. Overall, the negotiations demonstrated the sharks’ recognition of Grace & Lace’s potential and the founders’ ability to secure a favorable deal that would support their continued success and expansion in the fashion industry.
