Spanx Reshapes Itself

Spanx Reshapes Itself

Sara Blakely’s Atlanta firm has a new majority owner, the Blackstone Group.

In 2013, Sara Blakely was declared the youngest self-made billionaire by Forbes magazine.
In 2013, Sara Blakely was declared the youngest self-made billionaire by Forbes magazine.

Sara Blakely, whose Atlanta-based shapewear company Spanx created a new category of women’s apparel over 20 years ago, has sold a majority interest in the business to the Blackstone Group, a major private-equity Wall Street investment firm.

Until now, Blakely had grown the company without outside investment. “People have been asking me for 20 years when I will sell Spanx, and for 20 years I have said I’ll just know,” Ms. Blakely said in a prepared statement, “I operate very much based on instinct.”

After the deal closes, Blakely will remain as the executive chairwoman of the firm and manage its business operations. Blackstone is said to have valued the corporation, which is headquartered in the heart of Buckhead, at $1.2 billion.
In recent years, the company has shifted its business strategy to sell directly to the consumer, with only about 30% of the company’s sales coming through traditional retail outlets such as department stores and discount retailers, which is where Spanx built its initial success.

Blakely with a coffee cup that features the ethos that built her business.It has cut out the middleman, in effect, and strengthened its personal relationships with consumers by expanding its offerings on the web.
Shopping malls and big box stores have been heavily impacted by a new retail environment that emphasizes more personalized service based on the ready availability of extensive marketing data and targeted digital ads. With its new financial backing, Spanx is expected to expand its direct-to-consumer strategy and grow more aggressively, both domestically and abroad. The industry-wide shift in strategy has paid off for several other clothing manufacturers, including Nike and Levi Strauss.

Blakely told CNBC that expanding her company’s product offerings during a major shift in consumer shopping habits will continue to drive future growth.
“We kind of defined a category and revolutionized it, and we’re now doing that in apparel and active. Our consumers have been saying, ‘Put the magic of Spanx in the clothing that I’m wearing.’”

Following the recent trend for more informal, comfort-forward clothing, Spanx has expanded from women’s foundation garments to denim, activewear, and even products for men. But it remains committed to the female base that first made it successful. According to the Wall Street Journal, the lawyers who worked on the deal were all female, as were the bankers from JPMorgan Chase & Co. Blakely has repeatedly said that she wants the board of directors to be composed entirely of women.

The company began in Blakely’s Virginia-Highland apartment in 2000 with $5,000 she had made selling fax machines door-to-door. She developed the initial Spanx product after finding herself dissatisfied with how she looked in a pair of slacks she had purchased for a party. As the story goes, she cut the feet off a pair of control-top panty hose, put them on under her slacks, and thought she looked sleek and shapely that evening.

One of Blakely’s first big breaks came early in the company’s history, with a ringing endorsement from Oprah Winfrey on her nationally syndicated television program. The exposure led to a big order from the Neiman Marcus department store, and Spanx was off and running.

Blakely’s husband, Jesse Itzler, is also a highly successful entrepreneur.

By 2012, Blakely was on Time Magazine’s list of the 100 most influential people in America. The following year, she was featured on the cover of Forbes as the youngest self-made billionaire in the world. In 2015, she and her husband, Jesse Itzler, joined Tony Ressler, a prominent Wall Street figure, as part of a group that purchased the Atlanta Hawks for a reported $850 million.

In recent years, through her Spanx by Sara Blakely Foundation, Blakely has become an active philanthropist and outspoken advocate for women in business. During the past year and a half, she has contributed $5 million to help female business owners survive the pandemic.

The success of Spanx has attracted a growing list of competitors, many of them female entrepreneurs. Among the most prominent is Kim Kardashian West, who in the past couple of years has parlayed her celebrity and huge online following to build Skims, a company now valued in the same billion-dollar category as Blakely’s brand. According to Grandview Research, the intimate apparel industry is worth some $2 billion world-wide, and growing fast.

Blakely, who converted to Judaism, is married to Jesse Itzler, a successful entrepreneur who grew up Jewish in Long Island. In 2009, Itzler sold Marquis Jets, an aircraft rental firm, to Warren Buffet’s Berkshire Hathaway Inc.; Itzler was also an early partner in the Zico beverage brand, which Coca-Cola eventually purchased. Today, he’s also a keynote speaker and best-selling author who often appears at conferences with Blakely. They have four children and reside in Georgia.

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