Fresh Cash, New Strategy for BaubleBar
Amy Jain and Daniella Yacobovsky are more than three years into building their business. And they've hit a stride: Baublebar, their jewelry retail website, is a standout in fast-fashion online. The company employs more than 150 people in New York City, who post roughly 150 new BaubleBar-created necklaces, rings, and other sparkly embellishments, to its site each week.
But online isn't the only future for BaubleBar. With an infusion of $10 million in venture-capital funding it is now announcing, the company is expanding its offline presence. Perhaps most interestingly, this means taking a swing at working with existing stores, rather than creating new ones.
It's a different approach from one chosen by many of BaubleBar's peers--those other fast-growing, venture-funded online retail startups making retrograde moves into traditional retail. A typical first step is dipping a toe into physical retail by opening one's own flagship store in New York. Instead, BaubleBar is forging partnerships with existing and large-scale retailers, including Nordstrom and Anthropologie, a women's clothing retailer owned by Urban Outfitters.
"Our offline strategy is taking a new life of its own this year," Jain tells me, referring to the company's nascent partnership with Nordstrom, which will place BaubleBar products in more than 100 department stores across the country. "We have always planned to go at it on our own in physical retail, because touching and feeling our products can be important."
Other online retail startups--among them Birchbox, Makerbot, and Warby Parker--have experimented with bricks-and-mortar retail locations. Birchbox, a subscription startup that sends members sample-sized beauty products and also sells full-size versions of those products, recently opened its first bonafide retail shop, in New York City's SoHo neighborhood. Makerbot has a SoHo showroom as well, and is branching out to other cities. For its part, Warby Parker has a mixed strategy, with a few of its own stores, a few partnerships with existing retail shops, and a few showrooms sprinkled across the country.
The new funding--the company's third round--comes from a mix of new sources and firms that have already invested in BaubleBar, including venture heavyweights Accel Partners and Greycroft Partners. New investors include Aspect Ventures, a brand new firm seeking to invest in mobile marketplaces, along with the venture arms of more established firms, Triplepoint Ventures and Comcast Ventures. Perhaps most significantly, the round, which brings the company's total VC funding to $15.6 million, is led by serial fashion entrepreneur Chris Burch's Burch Creative Capital.
Jain and Yacobovsky say they met Burch--the billionaire known for co-founding womens-clothing company Tory Burch and creating the brand C. Wonder--through one of their employees, whose father knows Burch well. Once they sat down to talk with him, they say the conversation was extremely helpful in clarifying BaubleBar's scaling challenges.
"He's an operator who understands marketing and new channels of distribution," Jain says. "He's built a lot of businesses himself and has always been interested in jewelry. We knew in meeting him there was something potentially really special there."
BaubleBar brings a mastery of "fast-fashion" to its large retailer partners. The company's production cycle, from design and creation of a new necklace to shipping the finished product to a customer, can be as short as a month.
Jain says despite that speed, the designs BaubleBar creates aren't stabs in the dark. "The biggest driver of our success to date is our attention to our customer. We listen to her any way she talks to us, passively, or actively: We pay attention to how she is shopping our site, and what she's looking for."
With the new venture capital infusion, the BaubleBar team is looking to increase headcount--and also beef up the rest of its offline presence. But instead of building its own retail stores, that means locating, staffing, and growing into a new distribution center in the New York City area. "Being able to scale with these partnerships," Yacobovsky says, "requires a tremendous amount of resources on our end."
Jain says the company is open to new retail partnerships--if they’ll benefit top-line revenue--anywhere on the globe: "We are always talking to other retailers, including those both domestically and internationally."
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.