Kent Underwear
DEAL
EPISODE SUMMARY
🕓 Air Date: September 23, 2022
Asking For:
$200,000 for 5%
Investor:
Daymond John
Deal:
$200,000 for 15%
PRODUCT SUMMARY
Kent is a line of compostable underwear made from organic materials that can be transformed into nutrient-rich soil after use, addressing the issues of landfill waste and microplastics in the fashion industry.
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Background Story
Stacy and Jeff, the founders of Kent, introduced their innovative product on “Shark Tank” with a mission to revolutionize the apparel industry and address the environmental issues caused by conventional clothing materials. Stacy had spent a decade in the fashion industry and was concerned about the massive amounts of underwear ending up in landfills daily, coupled with the widespread use of plastic-based fabrics in clothing. Unable to find 100% natural underwear, Stacy and her friends decided to take matters into their own hands.
Jeff and Stacy came up with the idea of creating the world’s first verified compostable underwear, and Kent was born. Their product, made from organic pima cotton and featuring a trade-secret design for elasticity, is not only environmentally friendly but also comfortable and durable. Their aim was to tackle two major issues: reducing landfill waste at the end of a product’s life cycle and decreasing microplastic pollution.
The Product
Kent’s compostable underwear is a breakthrough in sustainable fashion. Made from 100% organic and plastic-free materials, including organic pima cotton, these underwear are designed to be environmentally friendly from production to disposal.
What sets Kent apart is its trade-secret product design that gives the underwear its elasticity without relying on synthetic materials. When it’s time to dispose of Kent’s compostable underwear, customers can simply place them in their compost pile.
Within approximately 90 days, the underwear will break down, turning into nutrient-rich soil, which can be used for gardening and other purposes. This eco-friendly approach to clothing disposal addresses the issues of landfill waste and microplastic pollution.
Kent’s underwear is known for its comfort, durability, and softness, comparable to traditional cotton underwear. Although priced slightly higher at $20 to $24 per pair, it’s manufactured entirely in the USA, ensuring high-quality craftsmanship and ethical production practices.
How It Went
The company’s position before Shark Tank
Kent had a promising trajectory despite being a relatively young company. At the time of their “Shark Tank” pitch, they had achieved $99,000 in sales year-to-date, with projections of reaching $500,000 by the end of the year. Their revenue had been steadily increasing, starting with $30,000 in their first year of operation and rising to $120,000 in the second year.
The company’s primary distribution channel was direct-to-consumer e-commerce, accounting for 85% of their sales. They had also partnered with one wholesale distributor, and they were on the verge of launching their products with a significant retailer, Nordstrom, indicating the potential for rapid expansion.
Kent’s founders had bootstrapped the business, demonstrating their commitment and belief in the product. At the time of the pitch, they were at the break-even point in terms of profitability. However, they expected a substantial increase in sales during Q4, which typically represented a significant portion of their annual volume.
The Negotiations:
The negotiations for Kent’s compostable underwear business were filled with excitement and competitive offers from the Sharks. Stacy and Jeff initially entered the tank seeking $200,000 in exchange for 5% equity in their company. However, they quickly garnered interest with their unique and environmentally friendly product. After showcasing their compostable underwear and explaining their mission, they received multiple offers.
Daymond John, the fashion guru of the Sharks, was the first to make an offer. He proposed investing $200,000 for 20% equity, citing his extensive experience in the fashion industry and a track record of building successful brands. Barbara Corcoran was next, offering $200,000 for 15% equity. She emphasized her belief in the company’s potential and its room for growth, referencing her previous success with a single-product company that reached $100 million in sales.
With offers on the table from Daymond John, Barbara Corcoran, and Lori Greiner, the founders chose to partner with Daymond John, as he was the fashion expert they had initially targeted. Stacy and Jeff agreed to accept Daymond’s offer of $200,000 for 15% equity in their company, marking a successful negotiation that would help Kent continue its mission of promoting sustainable fashion.
