Starting out in a bedroom making her first jewelry collection with $500, Kendra Scott has grown her company into one valued at more than $1 billion. With strong roots in philanthropy, a family-friendly work environment and stores where employees hug their customers, Scott’s personal approach is clearly a key ingredient of her success.
Today, the Kendra Scott jewelry brand is sold in retailers such as Nordstrom, Neiman Marcus, Bloomingdale’s and Von Maur, as well as 600 specialty stores. Additionally, there’s a thriving web business and more than 50 freestanding stores across the U.S. As reported earlier this year, the company expects to generate $300 million in sales this year.
Speaking at the WWD CEO Summit, Scott took the audience on a journey back to the early days. She recalled how she started in 2002, driving her three-month-old son in her Toyota Sequoia, calling on the first jewelry store in Austin, Tex. “I don’t know if the store owner felt sorry for me, or if she really liked the jewelry,” Scott said. “But they gave me a chance.” She wrote an order that day and visited three more stores that afternoon. In the last store she visited, she sold all her samples for $1,200 so she would have enough money to produce the orders she had written that day.
When she arrived home, she announced, “We’ve got ourselves a business,” she said. “As you can imagine, everything was just smooth sailing from there,” she joked. “This was going to be a piece of cake, right?”
She plugged along, making jewelry in her extra bedroom. She said Nordstrom wrote a purchase order, she got a showroom in New York and they began building a little business. She said Nordstrom had no idea that she was literally packing and shipping their orders from her dining room table. She recalled once getting a call from someone at Nordstrom, saying he needed to speak with someone in their shipping and receiving department. She put the call on “hold,” and screamed “Mom!”
“I yelled down to my mom who’s down there in my dining room helping me,” she said. Her mom picks up the phone and says in a very professional voice: “Janet, shipping and receiving.”
“I can share this with you, Pete [Nordstrom]. We’re good now. We’ve come a long way,” Scott said.
Scott said they began by wholesaling the line, deciding that she didn’t want anything to do with having her own stores. She had a previous history running a hat store. “I thought hats were going to make a comeback. How many of you are wearing a hat today?” she asked, as no one’s hands went up. “Clearly that business didn’t work out and I said, ‘I am never ever going to get into retail again.’”
Things were moving along, she was opening new accounts, she didn’t turn down any purchase orders that came her way and she built the business on lines of credit and credit cards. She said she had no investment capital in the early days. She then became a single mom with a one-year-old and a three-year-old. She would schlep them to New York for the ENK shows and she would set up her booth, with a baby and a bassinet.
“But then a magical, wonderful thing happened in 2008,” she recalled, referring to the recession. “Wasn’t it fun? Wasn’t it just a warm and fuzzy time every day?” Scott said. She said she’d wake up and hear a buyer she had worked with was laid off, or a boutique she sold to shuttered its doors, and it was devastating. She was paying her bills on time and then his happened. “I’m on my kitchen floor, thinking I’m going to lose everything,” she said. She decided then and there that she needed to change her course since all her eggs were in one basket. “I loved my buyers and I was so worried about pleasing them, I forgot the most important thing was to please my customer,” she said.
“This beautiful gift, wrapped up with a big bow called the recession, forced us to do something radical: retail,” she said.
In 2010, they decided to open their first store, and put the rest of the money into an e-commerce business, and created a customization tool called Color Bar. Although she promised herself she would never go into retail again, she said when she opened the store she had no idea what was going to happen. “If we’re going to do it, we need to do it different from everybody else,” she said.
She recalled that when she would go into a jewelry store she would be terrified, and would ask if she could see something underneath the glass. “She said they would look at you, judgy…and ask, ‘Are you going to buy that?’ You’re intimidated.”
Scott wanted to take “all the scary” out of it. At her stores, jewelry is freely displayed and you can touch and feel it. There are no glass cases and there’s a color bar. She said on Saturdays, there was a line for people to come into the store.
She set out to build a company that would allow her to be a great mother. “It would allow me to have a culture to encourage other mothers that they could have a great career and have a company that supported them,” she said. Scott created an office environment that supports family.
“I wanted to create an environment for my people that they know they’re my family and when they come in, they feel loved. They feel like they’re in my home. Beautiful work spaces, and not just in our corporate headquarters. Our distribution center is something out of a magazine,” she said. They have a fitness center, a beautiful café and chandeliers. People have asked her why she has chandeliers in her distribution center, which could be a cost savings. “It’s because every employee needs to be valued and appreciated like my family. My mother works in that distribution center. I have 2,000 almost daughters who work there. They’re my family. I want them to have a beautiful place. Our backrooms and our stores look just as beautiful as the front of house,” she said.
Kendra Scott Design Inc. employs 98 percent women. One can get their nails done at company headquarters in Texas, in which there’s a wellness room for nursing mothers and a kids’ room with video games, toys and books. “Why do we do these things? Because I did it. I was a mom and my little son came with me some days. There were days I needed that. These women, mothers, work their asses off. Mothers can juggle a million things at once and they get things done. If you give them the respect and love and care, they’ll do anything for you….We are filled with super women,” Scott said.
She also said she treats her retail customers as family. She said at other stores, you go in and try to return something and are told that the manager is not in and will be back Friday, but they’re not sure. “What kind of experience is that? We want to change that. I want to give every single person the power to please in that moment,” she said. “I don’t care whether you’re a part-time sales associate or holiday help, you have the power to make that customer happy in that moment,” she said. “I will reward you for at least doing something. Treat her like your sister,” she said.
Scott grew up in Kenosha, Wis., and her aunt was the fashion director of Gimbels. On the other side of her family were farmers and coal workers. She learned about fashion in her aunt’s closet. “I knew I wanted to be in fashion since my first hat business,” she said. She said she loves semiprecious stones but couldn’t afford them. She said she wanted to make beautiful quality jewelry at attainable price points, and make it identifiable.
Having been in business 16 years, they’ve started to branch out organically, such as making trays and boxes. She started designing jewelry for one’s home. “We have colored gem stones. What girl doesn’t like her gemstones to match her nails?” She made the exact turquoise, rose gold or gun metal in a polish. “We’ll take our time. There’s no rush to jump into a category for the sake of rushing into a category,” she said.
Scott said they try to be approachable and relatable, whether the customer is shopping in New York; Kansas City; Kenosha, Wis., or London. “We want to be an approachable brand, a friendly brand and we stay true to that. I have a rule. Our models have to smile…we’re happy, we’re loving, we’re kind. When you come into our stores, you receive a warm hug — literally. If you don’t like hugs, you may not want to come to our store. It’s OK,” she said.
A key component of the company is philanthropy and giving back. Kendra Scott had 7,000 events last year and gave more than $3 million to charity. They donated more than 70,000 pieces of jewelry to organizations across the U.S. “We never say no at Kendra Scott. No matter who calls us, we always have something to give. It can be a large organization or a hometown crisis like the hurricanes recently, or it could be a friend in need. You can have a girlfriend who has her son is in the hospital and needs help with her medical bills. We can throw a Kendra Gives Back event for her,” she said. “Our customers are part of our philanthropy and we try to engage them personally and we try to be there for them in a really personal way,” she said.
As for her international strategy, she said, “We’re working on it. I think we have a lot to do still in the U.S. There’s so much opportunity here for us. We started in Texas, we’re building our brand out. We’re just getting to the Coast. I’m visiting our Georgetown store tomorrow. We just opened Century City in Los Angeles. We still are doing exciting things here. We are going international, through Nordstrom in Canada. We’re opening Selfridge’s. We’re doing our first shop-in-shop in London on Oxford. That will be happening at the end of November. We’re getting there. I feel 2019-ish will be a good year for us on the international scope,” Scott said.
She said when her company – which earlier this year sold a 20 percent stake to Berkshire Partners – was recently valued at more than $1 billion, it was hard to get her head around. “Now I know where we’re going. We’re building a legacy brand. It’s exciting. Not a lifestyle brand, a legacy brand. I want the Kendra Scott brand to be here long after I’m gone,” she said.