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Fine jewelry maker Kendra Scott plans to open 12 stores outfitted with space for events and experiences, CEO Tom Nolan tells Richard.

Why it matters: Retailers see physical stores as a major driver of growth after years of store closures.

Driving the news: As Axios previously reported, retailers opened more stores than closed them in 2022, the first time since 2016, and an early estimate suggests that 2023 could eclipse last year, according to analytics firm Coresight Research.

Catch up fast: In 2017, PE firm Berkshire Partners closed a minority investment in Kendra Scott, backing a management recapitalization of the brand that valued it at $1 billion, according to reports and data provider PitchBook.

The company's stated ambition is to become a lifestyle brand.

Forbes previously reported that the company had $360 million in revenue.

Details: The new store design, based on customer demand, gives more space for Kendra Scott's customizable jewelry experience it calls Color Bar, where shoppers can design their own jewelry and where pieces can be engraved.

Some of the new locations will also incorporate the brand's in-house cafe Sips & Sweets.

To date, the company has opened three locations, including one in Troy, Michigan, last year and two so far this year in Houston and in Garden City, New York.

What's next: Another dozen stores are planned in states such as Virginia, Florida, Pennsylvania and New Jersey.

While most of the new locations are an expansion of the jewelry brand's retail footprint, some may be relocations such as its store in The Woodlands in Houston.

Although the updated format was designed in-house, the brand tapped Detroit-based GH+A Design Studios to support the process.

Nolan declined to comment on how much each new store will cost to build but did say they will be financed from cash flow.

The intrigue: "We have been really fortunate to have landlords proactively approach us because they know our stores drive foot traffic," Nolan says.

The big picture: "We have created an ample runway for sustained, profitable growth," Nolan says.

"That said, we will assess opportunities and adjust our growth strategy on a case-by-case basis to move forward with that mission," he adds, in response to whether the company could raise more capital, go public or seek a sale.

The bottom line: "We see retail as a continued opportunity for growth and will continue to expand our physical presence while creating a unique experience for our customers," Nolan says.

Editor's note: This story has been corrected to note Kendra Scott plans to open 12 stores in 2023, not 14 stores.

1 big thing: Kendra Scott's building boom

The interior of new store opened by jewelry brand Kendra Scott.

The interior of Kendra Scott's new store in The Woodlands in Houston. Photo: Courtesy of Kendra Scott

Specialty grocer The Fresh Market is making a major bet on live commerce with the launch of its retail media network.

Why it's the BFD: Retail media networks, whereby brands can advertise on an assembly of digital channels through a retailer, have ballooned into a $45 billion market, Kimberly writes.

What’s happening: The Fresh Market's network allows brands to run sponsored video ads across its live video streams.

The company works with vendors to create tailored livestream content featuring their products on The Fresh Market’s live-streamed broadcasts.

This is a departure from most retail media networks because they rely on static display and search, the company says.

Consumers can purchase featured products directly from The Fresh Market’s website. 

By the numbers: RMNs are projected to reach $100 billion in terms of ad spending by 2026, according to McKinsey & Co. 

By 2025, McKinsey says social commerce could grow to more than $2 trillion.

Drawing from its experience, The Fresh Market says its shoppable videos had conversion rates that were over 300% more than what you would get from traditional digital advertising.

The Fresh Market says its first four livestreams drew 2 million views.

How it works: The Fresh Market has been partnered with livestreaming commerce platform Firework since 2021. 

The partnership allows the lift, monetary-wise, to be as light or heavy as The Fresh Market wants it to be, Miller says, but, he added, the company has posted new positions to support this team.

Of note: Firework was valued at around $750 million last year following its $150 million Series B round led by Softbank Vision Fund 2 in May.

What they’re saying: The live shopping retail media network has brought several revenue streams to bear for the company, CMO Kevin Miller tells Kimberly.

“We're selling more products more profitably,” through its streams, he says.

“We're also providing a terrific platform for our vendor community to be able to spend some real good quality time with our customers,” he says, because the level of engagement is extremely high.

2. The BFD: The Fresh Market's live commerce bet

Illustration of a bag full of groceries with a cursor over it

💵 Going private (again) is now en vogue, the Wall Street Journal writes.

Newly public companies are increasingly going back to private ownership after a volatile ride on the public markets train.

From the hundreds of companies that tapped the public markets in 2020 and 2021, 10 companies have agreed to sell themselves to private equity firms, per Dealogic.

📉Walmart’s tepid earnings outlook for the year is likely to be a bellwether for the rest of the industry.

The retail giant warned that the highly inflationary environment is causing consumers to be more cautious about their spending habits as it struggles to manage price increases demanded by product suppliers.

3. Retail therapy

Illustration of a brain in a shopping cart.

• GrainChain, a McAllen, Texas-based agricultural data startup, raised $29m from Overstock.com, Pelion Venture Partners and BYU Cougar Capital. www.grainchain.io

• Skin + Me, a subscription-based dermatology brand, has raised more than €11 million in Series B funding led by Octopus Ventures. https://axios.link/3Kuxtkc 

• Planetarians, an SF-based vegan protein company, raised $6m in new seed funding. Mindrock led, and was joined by SOSV, Traction Fund, TechStars and AB InBev. www.planetarians.com

• BlueTrace, a Castine, Maine-based seafood traceability startup, raised $3.2m in seed funding from York IE, Maine Venture Fund, Coastal Enterprise Ventures and SeaAhead. www.blue-trace.com

• Indera Mills, a Yadkinville, N.C.-based manufacturer of base layer and thermal apparel, was acquired by Intradeco Apparel. Terms were not disclosed. https://axios.link/3Em6d3l

• ICV Partners, an investment firm focused on middle-market companies, has acquired Desi Natural, Noga brands and related assets from Raymundo’s Food Group, which is a part of AUA Private Equity Partners’ portfolio. A new company will form called Desi Fresh Foods. ​​https://axios.link/3Z4Vv9g 

4. Retail transactions

• Yeti Holdings, an Austin-based retailer of outdoor goods, has appointed Mike McMullen as permanent CFO. He has filled the role on an interim basis since October. https://axios.link/3ICuNiP

• DoorDash vice president of finance and strategy Ravi Inukonda will become the next CFO. Prabir Adarkar, who holds the CFO title, will move to the role of president and COO, effective March 1. https://axios.link/41d8Sq0 

• Trove, the developer of online resale software platforms, has named Natalya Davick, who most recently served as CFO of residential solar platform Palmetto Clean Tech, as CFO, and Julia Cai, who was the head of engineering at digital health care platform K Health, as CTO. https://trove.com/ 

• Bubbakoo’s Burritos, a fast-casual food chain, has named Mimi Somerman, who has served as a VP of marketing for Marie Callender’s, as its chief marketing officer. https://axios.link/3YNR3vS

• Norms Restaurants, a Southern California family-dining brand, has tapped Eric Wyatt, who most recently served as the senior vice president for operations at Hardee’s parent CKE Restaurant Holdings, as its president and CEO. https://axios.link/3SnrK1h 

5. It's Personnel

✨ Welcome to the inaugural Retail Tech Tuesday, where we spotlight innovative startups and dive deeper into trends. See our BFD for your first taste. 

Programming note: Richard, who explores Kendra Scott's expansion plans today, is attending CAGNY this week in Boca Raton. If you see him, say hi!

🍩 What we're eating: It's Fat Tuesday and several on the Retail Deals team are enjoying festive treats like pączki, a traditional Polish donut.

🙏 Big thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

Thank you for reading Retail Deals. Catch you again tomorrow!

February 21, 2023

1 big thing: Kendra Scott's building boom