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Jewelry brand Kendra Scott prospects for capital

A woman wear's necklaces and rings featuring lab-grown diamonds.

Photo: Courtesy of Kendra Scott

Kendra Scott, an Austin, Texas-based lifestyle brand, is seeking capital to fund its expansion plans, CEO Tom Nolan tells Axios exclusively.

Why it matters: The company has one of the most compelling financial profiles in fashion and accessories and is certain to attract suitors.

Zoom in: It would not be surprising if Kendra Scott enters into a transaction this year, which would give it "gas" to put on the "fire," Nolan says.

  • "We would make a great public company," he notes.
  • He declined to comment, however, on which options it is exploring, such as a sale or a transfer of shares. Nolan also declined to say if Kendra Scott is working with or interviewing investment banks.

Catch up quick: PE firm Berkshire Partners announced in 2016 plans to acquire a significant minority stake in the business, which valued the company at $1 billion.

  • Norwest Venture Partners remained a minority investor at that time.

What they're saying: "We look at best-in-class public companies and operate that way as a private company," Nolan says.

  • "We are private today and not worried about what the future looks like," he says.
  • "For us to do the things we want to do and achieve, we need capital," he adds. "Right now we have a strong financial balance sheet, low debt, and free cash flow. When/if we need access to different forms of capital, we will evaluate."

By the numbers: Kendra Scott's revenue increased nearly 20% year over year to around $500 million, the CEO says.

  • It grew EBITDA — already at a healthy margin — by more than 30% last year, he says.
  • E-commerce traffic grew 26% year over year, while the company plans to expand its store count from 138 to 200 over the next three years, Nolan says.
  • The company has also given back $65 million since 2010 via its philanthropic efforts.

What's next: Kendra Scott expects sales will continue growing by double digits for the foreseeable future. The company plans to open at least 15 stores this year.

Driving the news: Kendra Scott has been introducing new products, including a Southwest-inspired jewelry collection called Yellow Rose.

The latest: Kendra Scott is now offering a lab-grown diamond collection to make fine jewelry more accessible price-wise to its customers, the company said.

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