Sarah Blakely, founder of Spanx pulled off one of the most OG CEO moves of all time by announcing to her 500+ workers that she had bought them two first class tickets anywhere in the world along with $10k to enjoy their trip. Employees could be seen crying tears of happiness when Blakely made the announcement.
Sarah Blakely launched Spanx in 1998 with just $5,000 in her pocket, which she had earned from selling fax machines. Her vision at the time was to create a product for women to wear under clothing, that helped them feel more comfortable. She chopped the legs off a pair of control-top pantyhose to create her prototype and the resulting product was an immediate hit with women.
Last week Blackstone acquired a majority stake in the business valuing it at $1.2 billion.
Spanx is pushing into other categories of apparel — including denim — in hopes of making all clothing more comfortable for women.
The deal is Blackstone’s latest move to back women-run businesses. It follows investments in Whitney Wolfe Herd’s Bumble and Reese Witherspoon’s Hello Sunshine.
Short Squeez Takeaway: Spanx has done well by shifting its sales from distribution partners such as department stores to direct-to-consumer ("DTC") channel, which has higher margins. It's invested in its own website, similar to what other brands such as Nike and Levi Strauss have done. ~70% of its sales are from DTC now. Blakely's success goes on to show that sometimes it's better to build something slow and steady than try to chase overnight success & riches.