Rihanna’s Savage X Fenty Lingerie Brand Raises $125M in Series C Funding After Opening First Retail Store
As she sings in To serveall Rihanna sees are dollar signs, this time from her lingerie company, Savage X Fenty.
Synchronized with the opening of the company’s first-ever brick-and-mortar store over the weekend,Wild X Fenty announced a new $125 million funding round led by Neuberger Berman.
Previous investors L Catterton (a private equity firm backed by Bernard Arnault of LVMH), Avenir, Sunley House Capital and Marcy Venture Partners (the venture capital firm co-founded by Jay-Z) also participated in the Series C. This brings total funding to date to $310 million for the intimate apparel brand, which Robin “Rihanna” Fenty debuted in 2018 with TechStyles Fashion Group and then split in 2019.
Rihanna became a billionaire last year when Forbes estimated his net worth at $1.7 billion, with most of his wealth rooted in his cosmetics company, Fenty Beauty, which is worth around $1.4 billion. The remaining $270 million comes from the lingerie brand, as well as her music and acting career.
Last February, Savage X Fenty raised $115 million in Series B. Rihanna, at the time, held a 30% stake in the Savage brand. Savage X Fenty, Neuberger Berman, L Catterton and Marcy Venture Partners did not respond to requests for the company’s review.
The latest funding will support the fashion company’s foray into physical retail, its overseas expansion plans and the launch of new product lines. The Series C announcement coincides with the highly anticipated opening of Savage X Fenty’s first boutique at the Fashion Show Mall on the Las Vegas Strip.
The company plans to open four more stores in the first quarter of 2022 and a total of ten by the end of the year, according to Savage X Fenty co-presidents Christiane Pendarvis and Natalie Guzman, who also serve as chief commercial officers. and marketing director. officer, respectively.
The next store will open in Culver City in Los Angeles (where the company is based), followed by the Galleria Mall in Houston, King of Prussia Mall outside of Philadelphia, and Pentagon City’s Fashion Center in Arlington, Virginia.
“We will start with a limited number of stores,” says Pendarvis. “It will be a small percentage of our business. It’s about making sure we get the right formula and the right assortment in the stores. It’s been an extremely curious year of testing and learning for us, and then you’ll see us ramp up next year.
Since its inception as a direct-to-consumer company in 2018, Savage X Fenty has seen a CAGR of 150% every year, according to Pendarvis. She and Guzman report to Rihanna, CEO. The company declined to comment on earnings.
The women’s lingerie market, meanwhile, has grown since pre-pandemic 2019, according to the NDP Group. The women’s lingerie market in the United States reached $15.8 billion in 2021, a 34% increase in dollar sales from 2020.
Jessica Ramirez, retail research associate at Jane Hali & Associates, says the brand has great timing and star power. “Savage came at a time when the sector of the lingerie market was being challenged to change, abandoning this idea of sexy and redefining what it means. Victoria’s Secret left that aside for a while, leaving it up to new brands with new ideas to seek market share.
“Following Rihanna is also part of this win,” she adds. “With her massive following, there can be gold in anything she touches.”
While a total VC of $310 million in its treasure chest is impressive for a young brand like Savage X Fenty, Victoria’s Secret expects to end 2022 with nearly $6.8 billion in revenue, still controlling around 40 % of lingerie market.
“Victoria’s Secret has been hailed as a dead brand despite its $5 billion in revenue during the pandemic,” says Simeon Siegel, equity research analyst at BMO Capital Markets. “But he wasn’t dead, just very sick and very fat.” He says that after its spin-off from parent company L Brands last year, the legacy global brand is now positioned to respond to new market trends. “Victoria’s Secret is much healthier as a smaller brand because we’ve seen their profits skyrocket.”
Instead of following luxury lines like Agent Provocateur and La Perla, Savage X Fenty’s move toward Victoria’s Secret mass-market appeal has been evident since February, when LVMH and Rihanna shut down the ready-to-wear line. high-end wear from Fenty, like Forbes reported. The locations of the first lingerie stores offer insight into Savage X Fenty’s retail strategy, opting for traditional malls rather than high-end shopping areas like New York’s Fifth Avenue or Miami’s Design District. .
Guzman says the company waited for its customer loyalty program to reach one million members before opening the first store. “Our locations are based on where we have a high density of VIPs and are close to where they shop,” Guzman explains. “Data is very important to us and fuels how we grow this business.”
For its IRL stores, Savage X Fenty has partnered with Fit:Match, an app that uses full 3D body scans to measure customers and help them find the best fit and styles. “We want to access customer needs like we did online,” says Guzman.
But Savage X Fenty isn’t the first to bring tech touches to intimate gaming. True & Co, Knix and Thirdlove, all founded around 2013, followed by the launch of Aerie and Lively, were all pioneers in harnessing data for inclusive prototyping, as well as online quizzes and digital tools for a precise fit.
Similar to its startup peers, Savage X Fenty also emphasizes inclusivity and body positivity. Bras are available in over 50 sizes, while sleepwear and lingerie are available in sizes XS to XXXL.
While many bra startups like ThirdLove and CUUP were also built on the idea of inclusive sizing, Co-Chairman Pendarvis says every fashion piece, from its strappy corsets to its intricate lace teddies , is manufactured in all sizes.
“Unlike other intimate apparel brands, Savage X Fenty fully caters to both ends of the size spectrum, from missy to plus,” says Pendarvis. “We’re not just going to offer 40% of the assortment to our plus size customers, we’re going to offer everything, even this crotchless jumpsuit.”
“Body inclusivity is a real driver for many brands,” says Kristen Classi-Zummo, fashion apparel analyst at NPD Group. “It’s important that consumers see themselves in the stores where they shop.”
Before Savage X Fenty opened its first store, it relied on its Emmy-nominated fashion shows to get its diversity message across. Available to all customers through Amazon Prime, the purchasable events double as star-studded performances featuring Bella Hadid, Travis Scott, Halsey, Big Sean, Lizzo and Paris Hilton, to name a few. Equally important are the hundreds of other models, a cast of all sizes, ages, sexual orientations and skin tones.
Simeon says the adoption of ESG (environmental, social and governance) values is becoming mainstream and a positive sign of the times. But it’s not enough. “At the end of the day, it’s retail and telling a diversity story isn’t enough,” he says. “The product must always be a good product and must resonate.”
When it comes to echoing and generating buzz, having Rihanna as founder and CEO, so far, has made it a breeze. “We talk about confidence and what it means to be sexy and beautiful,” Guzman says. “No other brand leans into sensuality like we do, nobody focused on fit like we do.”