Madison Reed proved that women would buy hair dye online, but over the years, the company founded by Amy Errett opened over 60 hair dye bars across the country, established wholesale sales with Ulta, and then went on Deal Ulta with Target and also manages the Amazon website and sales.
The last time we checked on Errett was two years ago.when she discussed Madison Reid’s hair coloring strips, how the pandemic has affected the business and the possibility of creating a men’s color category.
Now that both direct-to-consumer retail and hair color lines are doing well, the eight-year-old company wants to forge even closer relationships with customers locally by increasing the number of colors it manages across the country. presence in retail stores where they usually shop. In salons, hair dye is applied by a licensed professional more quickly and at lower cost than traditional salons, the company says.
“I’ve been doing this for a while and don’t believe consumer brands can only be in one channel and succeed,” Errett told TechCrunch. “We serve consumers and they shop everywhere. We realized that we needed to keep track of where customers were, and that’s when our business exploded.”
With a new $33 million investment, we plan to add 20 more color bars and hire 850 new colorists by the end of the year, Errett said. She predicts that the company will have 100 stores by 2023. The company focuses on areas such as New York, South Florida, California, Chicago, Washington DC and Texas.
The new funding, which gives Madison Reed about $250 million in total funding to date, has been led by Sandbridge Capital with input from Marcy Venture Partners.
Errett described the funding as “very opportunistic” because the company was now actively raising money, but when she got to know Sandbridge, which is an investor in cosmetics companies like ILIA Beauty and Youth to the People, she felt they understood the consumer and the market. It’s the same with Marcy Venture, the Jay-Z fund that invested in Savage X Fenty – also known as Rihanna’s company – and is connected to the media.
“We’re glad they’re both on board,” she said.
In addition to the new color stripes, Madison Reed is investing new funding in additional product launches; Unfortunately, Errett didn’t say anything about what it was, but we can only speculate that the male color might be back on the table.
“We already had capital in the bank, but this gives us an arsenal to not give up and act. This is where the rubber meets the road,” she added.
Meanwhile, Errett said there are more options for global hair color industrywhich is expected to be valued at over $40 billion in 2023. In this sector, an estimated 40 million Americans have used permanent hair color products in 2020.
As such, Madison Reed’s gross margin has risen to over 80% and revenue has doubled in the past two years. Errett believes the company has established a strong foothold in the home goods market and is now beginning to gain share of the beauty salon market.
Meanwhile, in March, Madison Reid hired José Zuniga as CFO. Zuniga previously worked at the Dollar Shave Club and is leading the company’s multi-channel expansion.
“We were focused on finding someone with a background in consumer products, not the traditional way,” Errett said. “Dollar Shave Club destroyed an industry that no one was paying attention to. When I met José, he understood the financial model, understood retail shelves, and had content skills. We thought he would fit in nicely with our culture.”
Credit: techcrunch.com /