A Beacon in Affordable Luxury: Kendra Scott CEO Tom Nolan Elevates the Jewelry Unicorn and Its Customers
IPO Edge had a wide-ranging interview with Tom Nolan, CEO of fast-growing jewelry brand Kendra Scott
Mr. Nolan, CEO since 2021 and director since 2015, hails from Ralph Lauren and Condé Nast
Kendra Scott has grown in valuation quickly, from $20 million in 2012 to $1 billion valuation in 2017
Sold mostly via e-commerce and owned stores, designed to be timeless, endure evolving fashion trends
Also works with wholesale partners ranging from Neiman Marcus to upcoming Target collab
Customers run the gamut of incomes, with focus on the 87% of population earning less than $100,000 annually
Kendra Scott revenue was north of $400 million in fiscal year through January 2023
By John Jannarone and Karen E. Roman
Shortly after joining fashion-meets-philanthropy jewelry brand Kendra Scott as a director in 2015, Tom Nolan saw the company become a unicorn, commanding a $1 billion valuation in a private equity funding round. Eight years later, he’s at the helm as CEO with eyes to reach even greater heights, stewarding the company’s mission of reaching customers who are vast in number but often are neglected.
“This audience of constituents we focus on are being overlooked by the media,” Mr. Nolan told IPO Edge in a wide-ranging interview on subjects from style to financial performance. “Anytime I hear about luxury goods I get it, but the majority don’t live in that space.”
Kendra Scott CEO Tom Nolan
Indeed, Mr. Nolan embraces the same values founder Kendra Scott had when she started her eponymous company in her Austin, Texas home in 2002. At the time, Ms. Scott had a vision of making customers across the income spectrum feel beautiful, having noticed a chasm between pricey luxury brands and lower-end items that were poorly made.
Reflecting on his own upbringing, Mr. Nolan pointed out that he was brought up working class and was the first in his family to graduate from high school. “My life has been predicted on hard work and output,” he said. “I’ve been an underdog my whole life.”
In turn, he’s resistant to the idea of luxury feeling intimidating or too hard on a customer’s wallet. Elite luxury brands like Hermès, he says, can make even wealthy customers feel “uncomfortable” when visiting opulent stores like the French brand’s Paris flagship.
“No one wants to go into any store and feel like they overpaid for anything,” he said. “True luxury isn’t necessarily about money it’s about feeling. The right piece can have just as much meaning as a Birkin bag.”
The majority of Kendra Scott’s pieces are within financial reach of its shoppers but also designed to instill a feeling of luxury. “We make people feel good. We want them to feel elevated,” Mr. Nolan said. “It works because many wind up being repeat customers.”
Mr. Nolan’s journey to Kendra Scott included a role at storied media conglomerate Condé Nast, where he was Publisher of Golf World (he’s also co-owner of a golf course in Tennessee) followed by a pivot to fashion. At Ralph Lauren, he was Senior Vice President and learned under the tutelage of fashion industry legend Roger Farah, who retired as Executive Vice Chairman in 2014. He’s also on the board of Tommy John, a comfort-focused lifestyle brand along with Made In, which brings restaurant-quality cookware to at-home chefs.
When Mr. Nolan arrived at Kendra Scott, the brand had a strong wholesale footprint but only about a dozen stores. It had expanded steadily but was on the cusp of truly explosive growth having secured funding from Palo Alto private equity firm Norwest Venture Partners in 2014 that valued the business at $100 million. Soon after, Kendra Scott was crowned a unicorn with another investment from Berkshire Partners valuing the business at $1 billion, making Ms. Scott one of the wealthiest self-made women in the world.
Fast forward to 2021, when Mr. Nolan became CEO, and the expansion has continued apace. The company’s sales have grown a mid-teens annualized percentage, reaching more than $400 million in the fiscal year through January. The company has 2,600 employees and its store count reached 134 stores as of August, with a sales mix of roughly 50% retail, 35% e-commerce and 15% wholesale.
“It’s pure omnichannel,” Mr. Nolan said, pointing out that e-commerce can get a serious bounce from the presence of a brick-and-mortar store that serves as a showroom. The same phenomenon has been observed at other fashion brands such as white-hot preppie label Rowing Blazers, whose CEO described the effect in a recent interview.
Kendra Scott skews younger, with 80% of its customers in the Gen Z, Millennial and Gen X range. It also commands a powerful social media following, with influencers donning pieces in viral videos. Take Kylan Darnell, a “sorority Tok” star who posed with Kendra Scott pieces she paired with Gucci earrings.
While wholesale is a minority of Kendra Scott’s sales, it has landed partnerships with some of the country’s largest retailers. Later this month, the company will launch a collaboration with Target Corp. featuring over 200 items. At the other end of the spectrum, Neiman Marcus sells dozens of Kendra Scott pieces, which are slightly more expensive but most items are a few hundred dollars or less.
Those partnerships reflect Mr. Nolan’s mantra of reaching as many people as possible, regardless of income. “Our customers are everyone from police officers to CEOs to schoolteachers,” he said. “We want aspiration among all customers.”
Of course, Kendra Scott does have a fine jewelry line, with some pieces $1,500 and up. “When we launched fine jewlery it was a bit of a risk,” Mr. Nolan said. “But we saw customers stretch up and also a pull down.”
The brand is also dedicated to doing good through the Kendra Scott Foundation. It also offers events at local stores where community members can hold shopping events for charities, with 20% of sales going to donations.
Earlier this year, the company hired advisors to seek more growth capital as it continues to expand across channels. There’s been no word on plans to go public, but as the IPO window reopens, investors are on the hunt for high-quality growth stories. With Mr. Nolan at the helm, Kendra Scott is one to watch.
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