Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.
South Congress Avenue is one of Austin's most beloved and heavily trafficked streets, illustrating the breadth of the city's creative scene. Down the road from quirky variety store Parts & Labour, you'll find both Austin institution Guero's Tacos and Feathers, a popular spot for vintage.
There's also the Hotel San José, a beautifully designed, achingly hip collection of bungalows with an outdoor pool area regularly filled with locals and out of towners alike. Walk a little further and you'll find an outpost of By George, the designer boutique that sells international brands like Isabel Marant and Tome.
And just around the corner from By George is Kendra Scott, a girly wonderland of baubles and bling that's outfitted much like a candy store. But instead of filling their baskets with gummy worms and sno-caps, customers aged 8 to 80 browse what feels like thousands of pieces: bold geometric earrings, chunky pendant necklaces, baroque double rings — plenty of which are priced under $100.
In one corner there's the Color Bar (Color BarTM, mind you) where one can customize a pair of earrings, from the style to the metal to the stone color. Little girls wander around, assisted by a bright-eyed staff dripping in drusy and sharply-cut chunks of jade. Mothers nod yes or no to their daughters' picks, while choosing a few pieces for themselves. The look is "statement," the sort of preppy-girl jewelry meant to jazz up an Oxford shirt and skinny jeans or nicely decorate a DVF wrap dress. Accessible, pretty, and yes, basic.
Even if you think you've never heard of Kendra Scott, the brand can be hard to escape, with its 38 stores (most of which are sprinkled throughout the South and Midwest), its notable presence at major department stores like Nordstrom and Bloomingdale's, and its booming e-commerce business. In Texas, where Friday Night Lights isn't just great TV but an actual way of life, it has become de rigueur to wear Kendra Scott earrings in your team colors to football games. The trend has trickled down to high schools and spread across the country.
After I take a spin around the South Congress store, Scott, a 41-year-old mother of three with honey-tan skin and Barbie-blonde hair, emerges from the upstairs offices to greet me. She has that warm, yet almost unearthly, energy that vibrates off famous people. Essentially, she's a Disney princess come to life. Or Miss America, without the sash. "Her personality is intoxicating," says Denise Chumlea, Scott's vice president of design, who has been with the company for a decade.
It has become de rigueur to wear Kendra Scott earrings in your team colors to football games.
Up in the Kendra Scott offices, everything is light and white and just a teensy bit ornate, a sort of measured spin on the wacky interiors of a Kelly Wearstler-designed hotel. Boxes of product are stacked here and there. Photos of Scott's family dominate her office. "Our three core values are family, fashion, and philanthropy," Scott says, her eyes wide. "I don't want our folks to miss anything. I want them to be at their kids' recital."
The company's new corporate headquarters, a 43,000-square-foot space that opens this May in Central Austin, will emphasize those values. There will be wellness rooms for nursing moms and game rooms for older kids. With a juice station, manicure bar, and plenty of other perks for the 150 corporate employees, the majority of whom are women, the next iteration of Kendra Scott HQ is significantly more ambitious than the current modest, if inviting, digs. "I want it to be Vogue meets Google," is how Scott describes it, sitting behind her desk, which is as perfectly polished as her nails.
The flashy new offices are a result of the nearly-impossible-to-believe success the company has experienced recently, bringing in an estimated $160 million in sales in the 2015 fiscal year, up from $74.8 million in 2014 and, even more wildly, $1.7 million in 2010. That's an almost 10,000 percent increase in just five years. While the company declined to give an official projection for 2016, sales are likely to top $200 million.
Kendra Scott's story isn't one of the "rags to riches" variety, but she does like to emphasize that her beginnings were humble. "I wasn't born with a silver spoon in my mouth," she says. Instead, Scott was born in Kenosha, Wisconsin. Her father was a "country lawyer" who started his own law firm, and her mother sold Mary Kay cosmetics. Scott describes her parents as entrepreneurial, and while they may have inspired her, it was her aunt, the fashion director at Gimbels department store in Milwaukee, that cemented her fate.
There was a point in retail history, in the middle of the last century, when regional department stores were powerful entities. Fashion directors from all over the US would head to Paris each season to view the couture collections. They would buy couture looks, and then make more affordable copies for their customers. (Visit any vintage store and you'll find labels that say things like, "Christian Dior for Saks Fifth Avenue.") This dynamic changed with the advent of ready-to-wear, when designers started producing their own semi-affordable garments. That shift led to the eventual consolidation of department stores. Macy's, for instance, bought up both Gimbels and Kaufmans, another regional chain, in the 1990s.
But in the ‘70s, the model still worked, and Scott's aunt schooled her on the ways of the runway. "She was the most fashionable, gorgeous woman that you could imagine," Scott says. "A boss lady in the 1980s, and a single mom too. She'd bring back her slides from Milan and Paris, and we'd sit there, clicking through the turnstile. She taught me how to trend-forecast." Scott's aunt also gave her a lesson in accessibility. "It was about taking these couture looks and making them something that every woman could understand and be excited about. To me, it was just magic. That's where it started."
When she turned 18, Scott enrolled in Texas A&M to pursue a liberal arts degree, despite a pull towards fashion. "People where I'm from didn't go to FIT," she says. "It just wasn't what people did." In 1993, at age 19, she dropped out of college and "followed a boy" to Austin. Her plan was to transfer to a school there, but it never happened.
Instead, she started making and selling hats, inspired by her late stepfather's battle with brain cancer, and donating a portion of the proceeds to a local hospital. The business took off, and she was able to open two Hat Box retail stores. This was the mid-'90s when e-commerce was still nascent, but she tried her hand at the web too, selling secondhand hats along with her originals.
"The Hat Box was my greatest education," Scott says with the enthusiasm of a life coach. "It was my master's degree in the school of hard knocks." It's easy to roll your eyes at statements like these, except that Scott delivers them with such confidence you can't help but believe that's how she really feels. She surely makes a case for the effectiveness of clichés; this is a part of her charm.
After nearly a decade of trying to make millinery succeed as a modern business, she shuttered The Hat Box. "I swore I would never go into retail again," she says. Instead, she began exploring the manufacturing side of things. In particular, the manufacturing of jewelry.
Scott's hunch that women would be willing to pay a premium — but not too high of a premium — for semi-precious stones ended up being correct.
Even before The Hat Box closed, Scott had begun tinkering with jewelry design. "It was my escape, my passion," she says. Her goal was to make pretty things with real stones for cheap since "everything I wanted was out of my reach." She was living, she says, on Top Ramen and pinto beans by the time The Hat Box bottomed out. "I couldn't afford a pair of $300 earrings in rose quartz. I realized that if there was a way I could design beautiful, handcrafted jewelry at an affordable price, I could fill a white space in the market."
She wasn't wrong. In the early aughts, the costume jewelry market was fairly barren. Claire's was for kids, Kenneth Jay Lane for more seasoned shoppers. The throwaway culture of fast fashion had not yet taken hold. Scott's hunch that women would be willing to pay a premium — but not too high of a premium — for semi-precious stones like drusy and mother of pearl ended up being correct.
Scott made her first collection in 2002 when she was pregnant with her first child. "Financially, we were in a tough spot, and I used $500 to create the collection," she says. Three months after giving birth, she hauled her son store-to-store in a Baby Bjorn peddling the collection around Austin. At the end of the day, she sold all of her samples so that she'd have money to produce the first orders.
From the beginning, Scott was smart about the way she sourced her stones, buying direct from suppliers instead of going through an agent. A friend from the accessories world, another small business owner, helped her get in with a supplier who took a chance on the small run. At first, Scott had to choose from the stone shapes on offer: she couldn't afford to make her own molds, which can cost thousands of dollars. "But I knew that we were going to have to cut our own shapes," she says. "I thought that if I could customize my own stone shapes, then our pieces would be identifiable."
It took six years for Scott to be able to make the mold for the Danielle, a $60 oval earring that is still her bestseller. "It was the tipping point for our growth," she says. "Now, every single piece is made from an original mold. Every facet."
Things were going well. Scott was represented by a Dallas showroom, and soon enough the local department store chain Harold's wrote an order for 9,500 units. She found a showroom in New York and started selling to Nordstrom. Then the recession hit, and the bottom fell out for department stores. Harold's, for one, filed for bankruptcy in 2008.
"My buyers were getting laid off, and I realized that all of my eggs were in one basket," Scott says. (Another cliché, but again, true!) "I realized that everyone was speaking directly to my customer except for me."
"My buyers were getting laid off, and I realized that all of my eggs were in one basket."
By 2009, Scott's business was flat. She told her seven employees that she planned on investing what little profit the company had made into a website, where she could build a direct relationship with the Kendra Scott customer. "I said to the girls, ‘It's go big or go home,'" she recalls. "‘It's time to put all of our chips on the table.'"
It was the best decision she ever made. That same year, she pulled out of her New York showroom and opened her own, a move made possible by the cheap, post-crash rents. On the website, she debuted the Color Bar. She found affordable retail space on South Congress that happened to be connected to some office space too. Still weary of retail, Scott was determined to make the experience unique: "We built a real Color Bar, and made sure there was a party going on every day with cupcakes and champagne. We wanted to offer a different experience, and it worked."
Some of Scott's store parties were just for fun, while others raised money for different causes. Like her hat company, which was mission-driven, it was important that Kendra Scott build a reputation for altruism. Thus far, the company has donated more than $1 million through its Kendra Gives Back initiative. "I promised, no matter who called, I wouldn't say no," she says. "Even when I was operating out of the extra bedroom in my house, I knew that giving back was going to be a component of the business."
This charitable bent may have brought about the intended halo effect, but what it really did was illustrate Scott's understanding that it was the community that would make or break her brand. While she never adopted the direct-selling model, she gained some insight from her mother's stint selling Mary Kay. Along with in-store events, Scott and her team started working with college sororities to host shopping parties. This is how that "wear your Kendra Scott to the big game" trend began. While Scott's customer base has moved beyond those sorority sisters, she she still spends 30 percent of her time visiting stores outside of Texas, often making scheduled personal appearances.
As her grass-roots marketing took off, Scott made her first big-league hire: Lon Weingart, a retail veteran with Macy's and Starbucks on his resume. She and Weingart established a merchandising strategy that would allow the company to scale. "When I started, we were distributing more broadly into discounters," says Weingart. He put an end to that. Scott rejiggered the design schedule to accommodate four collections a year instead of six, and worked with the team to create strong visual presentations to communicate each collection's vision. As the team's point of view became clearer, sales increased.
"We've bought the equivalent of a mountain's worth of drusy. The customers can't get enough of it."
"She has done a great job evolving her brand over the years, while staying true to the brand identity," explains Marlaine Stankus, the vice president and divisional merchandising manager of jewelry and watches at Nordstrom. "Her collections have a strong foundation in her iconic, signature pieces, but she'll mix in new ideas through colors or new trends so there is freshness there. They appeal to a broad range of our customers."
Erica Russo, the Bloomingdale's executive vice president and fashion director who oversees accessories and beauty, uses similar language to describe Scott's appeal: fresh, accessible. "Our customers love Kendra's earrings, both studs and statement pieces," says Russo, who recently worked with Scott to develop an exclusive capsule collection of earrings for the store. "Pendant necklaces are also very popular."
The specialness of the natural stones is another quality buyers like to point out. Sourcing directly from countries like Brazil, Madagascar, China, and Mongolia, Scott has had record success with four stones in particular: drusy, abalone, magnesite, and mother of pearl. "We've bought the equivalent of a mountain's worth of drusy," Weingart says. "The customers can't get enough of it."
The numbers speak for themselves — and loudly. By the end of 2016, the company's brick-and-mortar stores will contribute to about half of that estimated $200 million in sales. Another quarter will come from wholesale, and another quarter from e-commerce. To be sure, one of the smartest things Scott did was invest online. Along with clever email marketing campaigns targeting the micro-communities that the brand fostered, the brand was also quick to embrace bloggers, hosting dinners and other events with RewardStyle, the Dallas-based platform that helps bloggers monetize their content through affiliate links.
Blog and Instagram posts abound. "Kendra Scott. I just can't quit her. AND I'VE GOT ANOTHER Kendra Scott CODE!" declared Pinterest Told Me To blogger Lauren Sheaffer Sims in a May 2014 post. "That dang Color Bar is just so fun you have to do it!" wrote Emily Fogarty, the blogger behind The Style Hunter, in June.
"As a blogger, you get a lot of free crap. It's the stuff that really resonates that you end up wearing a lot and showcasing on your blog and social media."
But it's not just the naturally effusive types that are willing to declare their love of Kendra. Los Angeles-based actress and blogger Grasie Mercedes, whose more than 46,000 Instagram followers covet the way she wears cool basics like a Schott motorcycle jacket and high-waist trousers from hip Australian label Finders Keepers, is as interested in Scott as the dozens of Southern belles that have traditionally made up the designer's core contingency.
"As a blogger, you get a lot of free crap," says Mercedes, whose favorite piece is the $130 Naomi double ring in platinum drusy. "It's the stuff that really resonates that you end up wearing a lot and showcasing on your blog and social media. Kendra's stuff is sturdy, looks and feels good, but it's not astronomically priced. A lot of these jewelry brands are so expensive, and they're not really good quality."
It makes sense that the influencer community would love Kendra Scott right back. Fashion bloggers, in general, are not elitists. They adore high-low dressing. Scott, with her accessible designs that complement current fashions instead of challenging them, is an easy ally.
In many ways, Scott operates as her aunt, the Midwestern fashion director, did all those years ago, taking runway trends and translating them for a broader audience. Until now, though, that audience has been relatively concentrated in the Midwest and the South, where a certain aesthetic reigns supreme. Now, as the company begins opening locations on the coasts, and eventually, New York City, Scott is eager to sharpen her fashion point of view.
The plan is for chunky colored stones and pendant necklaces to still make up the majority of the Kendra Scott SKUs, but the brand has begun introducing more delicate styles, including tiny earring studs and single-stone necklaces. There's a desire among the executive team to attract those outside of the Southern sorority girl world, even though those customers are among its most valuable.
The idea that Scott will be able to get more people to buy her jewelry is not unfounded. While her business is already impressively large, the company is eyeing the international market in addition to the expansion plans it has underway in the US. New product categories will likely be announced in 2016, including a foray into beauty.
But where exactly the next few years will lead Scott, the person, is unclear. In 2014, Palo Alto-based investment firm Norwest Venture Partners took a 20 percent stake in Kendra Scott, meaning that an exit is expected at some point down the line. The founder, however, won't entertain the idea — at least not to a reporter — and claims she has no interest in one of the most obvious outcomes, an IPO. "I definitely have no desire to go public," she says firmly. "I'm hoping to build a legacy, like Chanel or Prada. I love this business, and I hope that I can continue to do this for a long time."
Regardless of if she were to ever leave the company, it's clear that Kendra Scott is her brand's greatest asset. "A lot brands are trying to figure out how to be authentic," Scott says. "That's the one thing our brand is: authentic."
Lauren Sherman is a Brooklyn-based writer.
Editor: Julia Rubin