Sneaker Company Greats Raises $10 Million in Series B Funding

171003_royale-perf-w-09033-2.jpg

A private equity firm based in San Francisco, California, JH Partners invests in consumer brands and helps them to accelerate growth. In 2017, JH Partners led a $10 million Series B round of financing for Greats, a direct-to-consumer, digitally native sneaker company in Brooklyn, New York. Several new and existing investors also assisted with the financing, including Searchlight Capital Partners’ Eric Zinterhoffer, Resolute Ventures, retired NFL star Adrian Wilson, and others in the retail, fashion, and entertainment sectors.

According to JH Partners founder and partner John Hansen, his company invested in Greats because it was attracted by its reimagining of classic silhouettes and the value proposition that it brings to customers. Hansen said that Greats represents a prominent example of the future of specialty retail by combining differentiated offerings with an e-commerce strategy that supplements direct-to-consumer sales with targeted wholesale and retail distribution. Greats founder and CEO Ryan Babenzien also endorsed the partnership with JH Partners and expressed his excitement about what the future holds.

“JH Partners has an incredible track record of helping brands reach their potential. They understand our vision and have the expertise to help us take our brand to the next level,” Babenzien said in a statement.

The successful financing will help to expedite Greats’ growth, fund investment in new technology, and build a successful team. Greats also plans to use the funds to open at least 10 pop-up retail stores in key cities across the country over the next two years. While digital will remain the company’s primary channel of product distribution, its plans to open retail stores will appeal to consumers who prefer to touch and feel a product before making a purchase.

Progress toward a retail presence initially transpired in October 2017, during which time the company made a foray into the wholesale market through a partnership with the American department store Nordstrom. The sale of Greats products in Nordstrom stores will uphold the company’s dedication to quality and affordability, with prices matching those sold directly from Greats’ online storefront. In addition, Nordstrom’s scale and reputation can benefit Greats by increasing its exposure and helping the brand to reach new customers.

In 2013, Babenzien started Greats alongside sneaker industry veteran Jon Buscemi. The company was launched with the goal of selling high-quality, classic Italian-made styles at a lower price to consumers. While products are produced in the same factories as designer brands, Greats can offer its products at a third of the price by relying on a direct-to-consumer sale model for the majority of its inventory. The model succeeded in increasing revenue and resulted in the company becoming one of the fastest-growing sneaker companies in the country. Revenue doubled month over month in the first quarter of 2017, despite a challenging retail market.

Greats’ profitability provided it with the necessary revenue to expand its product offerings and reach new groups of consumers. For instance, the company expanded its product offerings from two styles to over a dozen in the last three years. The company added a women’s collection to its lineup in March 2017. Prior to this, product offerings were exclusive to premium men’s shoes.

Advertisements