As she sings in Pour It Up, all Rihanna sees is dollar signs, this time from her lingerie venture, Savage X Fenty.
Timed with the opening of the company’s first ever brick-and-mortar over the weekend, Savage X Fenty announced a new funding round of $125 million led by Neuberger Berman.
Previous investors L Catterton (a private equity firm backed by LVMH’s Bernard Arnault), Avenir, Sunley House Capital, Advent International, and Marcy Venture Partners (the VC firm co-founded by Jay-Z) also participated in the Series C. The Company also received a new investment from LionTree, Abu Dhabi Growth Fund (ADG) and Multiply Group
This brings total venture capital funding to date to $310 million for the intimate apparel brand, which Robin “Rihanna” Fenty debuted in 2018 with TechStyles Fashion Group, then spun off in 2019.
Rihanna became a billionaire last year when Forbes estimated her net worth at $1.7 billion, with the bulk of her wealth rooted in her cosmetics company, Fenty Beauty, which is worth about $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 a valuation of the company.
The latest funding will support the fashion company’s foray into brick-and-mortar retail, plans to expand overseas 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 merchant officer and chief marketing 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, the King of Prussia Mall outside Philadelphia and Pentagon City’s Fashion Centre in Arlington, Virginia.
“We’ll start with a limited amount of stores,” says Pendarvis. “It will represent a small percentage of our business. This is about making sure we’re getting the right formula and assortment mix in stores. This is an extremely curious test-and-learn year for us then you’ll see us ramp up next year.”
Since its inception as a direct-to-consumer business in 2018, Savage X Fenty has seen a revenue CAGR of 150% each year, according to Pendarvis. She and Guzman report to Rihanna, CEO. The company declined to comment on revenue.
The women’s intimate apparel market, meanwhile, grew since pre-pandemic 2019, according to the NPD Group. The women’s intimates market in the U.S. reached $15.8 billion in 2021, a 34% increase in dollar sales, versus 2020.
Jessica Ramirez, retail research associate at Jane Hali & Associates, says the brand is benefiting from great timing and great star power. “Savage came at a time when the intimates market sector was being challenged to change, leaving this idea of sexy behind and redefining what that means. Victoria’s Secret left that out of the conversation for some time, leaving it to new brands with new ideas to go after market share.”
“Rihanna’s following is also part of that win,” she adds. “With her massive following there can be gold in everything she touches.”
While a VC total 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 close to $6.8 billion in revenue, still commanding some 40% of the 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 with BMO Capital Markets. “But it was not dead, just very sick and very large.” He says after its spin off from parent company L Brands last year, the global legacy brand is now positioned to respond to new market trends. “Victoria’s Secret is a lot healthier as a smaller brand as we’ve seen their profit dollars skyrocket.”
Instead of trailing luxury lines like Agent Provocateur and La Perla, Savage X Fenty’s move toward Victoria’s Secret’s mass-market appeal has been evident since February, when LVMH and Rihanna had shuttered Fenty’s upscale ready-to-wear clothing line, as Forbes reported. The locations for the first lingerie stores offer a peek into Savage X Fenty’s retail strategy, opting for mainstream malls rather than high-end shopping areas like Fifth Avenue in New York or Miami’s Design District.
Guzman says the company waited until its customer loyalty program reached one million members before opening the first store. “Our locations are based on where we have a high density of VIPs and are in close proximity to where they shop,” says Guzman. “Data is very important to us and fuels how we are expanding this business.”
For its IRL stores, Savage X Fenty partnered with Fit:Match, an app that uses 3D full body scans to measure customers and help them find the best fit and styles. “We want to access the customers’ needs the way we did online,” says Guzman.
But Savage X Fenty isn’t the first to bring touches of tech into the intimates game. True & Co, Knix and Thirdlove, all founded around 2013, followed by the launch of Aerie and Lively, were all pioneers in leveraging data for inclusive prototyping, as well as online quizzes and digital tools for accurate fit.
Similar to its startup peers, Savage X Fenty also emphasizes inclusivity and body positivity. Bras come in more than 50 sizes, while sleepwear and lingerie is available in sizes XS–XXXL.
While many bra startups like ThirdLove and CUUP were also built on the idea of inclusive sizing, co-president Pendarvis says every single fashion piece, from its strappy cami corsets to intricate lace teddies, are made 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 that crotchless catsuit.”
“Body inclusivity is a real driver for a lot of brands,” says Kristen Classi-Zummo, fashion apparel analyst at the NPD Group. “It’s important for consumers to see themselves in the stores they’re shopping at.“
Before Savage X Fenty opened its first store, it relied on its Emmy-nominated fashion shows to drive home its message of diversity. Available to all customers via Amazon Prime, the shoppable events double up 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 adopting 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 this is retail and telling a diversity story is not sufficient,” he says. “The product still has to be a good product and has to resonate.”
When it comes to resonating and generating buzz, having Rihanna as founder and CEO, so far, has made it a breeze. Perhaps it’s also the leadership behind the scenes. “We are about confidence and what it means to be sexy and beautiful,” says Guzman. “No other brand is leaning into sensuality the way we are, no one has focused on fit the way we do.”