Sarah Oliver Handbags
DEAL
EPISODE SUMMARY
🕓 Air Date: December 4, 2015
Asking For:
$250,000 for 20%
Investor:
Robert Herjavec, Lori Greiner, Kevin O'Leary (33.3)
Deal:
$250,000 for 30%
PRODUCT SUMMARY
Hand-knit handbags made by seniors, known as the Purlettes Plus One, with a unique manufacturing model.
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Background Story
Sarah Oliver, the founder of Sarah Oliver Handbags, grew up learning to knit from her mom and great-aunt. Inspired by her passion for knitting, she decided to knit gifts for every woman in her family one holiday season. The positive response led her to turn her knitting into a business. As the demand grew, Sarah brought in a group of senior knitters, known as the Purlettes Plus One, who became the backbone of her business.
The Purlettes, aged between 79 and 94, are integral to the company’s success, using their passion and nimble fingers to create hand-knit handbags. Sarah’s vision is to combine the joy of knitting with meaningful stories behind each bag.
The Product
Sarah Oliver Handbags are all hand-knit with love and care in the USA, featuring a unique manufacturing model. The Purlettes Plus One, a group of senior knitters, contribute to the handmade quality of the bags.
The handbags come with a personal touch, as each knitter’s story is attached to the bag. The bags include various styles, such as wristlets and crossbody bags, and are adorned with removable brooches, making them versatile.
The bags primarily use knit material, and the “O” on the bags is a removable brooch. The handbags are priced at $225, with a cost of $47 to make the best-selling Resort bag.
How It Went
The company’s position before Shark Tank
Sarah Oliver Handbags has achieved lifetime sales of $1.9 million, with $360,000 in sales last year. The company has 90 store accounts across the country and also sells online. Currently, there are two retirement communities with about 30 knitters, producing approximately 4,000 bags a year, generating around $900,000.
The company is seeking $250,000 in working capital to scale production further. Sarah’s goal is to expand to five retirement communities in the next two to three years. While there is no detailed information on profits, losses, or current funding sources, Sarah emphasizes the need for working capital to meet the growing demand.
The Negotiations:
Sarah initially asked for $250,000 for 20% equity, presenting her business as a commercial venture rather than a charity. Lori Greiner makes an offer on behalf of herself, Robert Herjavec, and Kevin O’Leary – $250,000 for 25%, with each shark receiving 5%. Robert expresses enthusiasm for the cause and notes the potential impact on consumers when a product touches their hearts. Mark Cuban appreciates the emotional connection but opts out, seeing it as falling between a cottage industry and a charity.
Barbara Corcoran and Daymond John also decline. Kevin O’Leary proposes an alternative offer – $250,000 for 30%, with him receiving 10%. Lori adjusts her offer to match Kevin’s. After some negotiation, Sarah accepts the offer from Lori, Robert, and Kevin for $250,000 for 30%, with each shark getting a 10% stake. The deal is finalized, and Sarah expresses excitement about having the support to grow her business and hire more seniors.
