Retail news that keeps industry pros in the know
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D2C home goods brand Brooklinen said yesterday it raised $50 million from private equity group Summit Partners. For Summit, the decision to invest in Brooklinen was way easier than folding a fitted sheet:
- Brooklinen’s profitable—and has been for three of its five years in business. Revenue increased 40% to nearly $100 million in 2019.
- Shoppers are loyal. 40% of Brooklinen’s daily revenue comes from repeat customers.
Another bonus: Brooklinen practices restraint. Its last reported funding round was in 2017, when it raised $10 million from venture capital firm FirstMark Capital. And unlike other brands we only use at bedtime, Brooklinen cut back on marketing channels that “weren’t carrying their weight,” CEO Rich Fulop told TechCrunch.
Where the money’s going: Brooklinen’s eyeing textbook growth methods like wholesale distribution, international expansion, and new stores (up to 30 total over the next three years). Its first permanent store, which opened last month in Brooklyn, is already profitable, excluding initial startup costs.
My takeaway: Investors have wised up to the perils of backing unprofitable brands, no matter how convincing their branding. As 2020 continues, the brands that respect the bottom line should be in a better position to score new investments.