Many fashion and beauty founders see scaling their brand from zero to $100 million as the hard part. But as more start-ups hit that milestone, they’re discovering their real challenges are just beginning.
Adding that next $100 million – or $1 billion – means finding a wider audience, without losing the qualities that hooked early customers. New sales channels must be developed, without sacrificing profits. And there’s almost guaranteed to be a new crop of start-ups claiming to offer an even better t-shirt, sneaker or serum.
Recent years have produced more difficult conditions for early-stage fashion brands: Investors have been wary of the category, and the quick growth once available via social media ads is no longer as affordable as it once was. Still, a variety of brands across price points in fashion and beauty have managed to cross the $100 million mark, including luxury womenswear brands Khaite and Toteme, men’s t-shirt maker True Classic, dupe brand Quince and customised hair care seller Prose.
In looking to their next stage, companies should focus on building long-lasting legacies and maintaining their differentiation, rather than hitting a lofty sales figure, founders and investors who have experience with brands at the $100 million mark say.
“As you seek to get over $100 million, you’ve got to move outside of your comfort zone, and understand where the brand extends to,” said Jon Owsley, a managing partner at LVMH-backed private equity firm L Catterton, where he’s backed brands like activewear maker Sweaty Betty, skincare label Tula and buzzy cosmetics upstart Dibs.
To keep growing sustainably, brands are blending new and old school brand-building tactics, such as using e-commerce data to determine where to open physical stores and introducing new products they’re confident customers will buy.
Product Propositions
While many brands get to $100 million with hero products, acquiring and retaining customers beyond that point requires them to regularly introduce new styles that simultaneously feel fresh but not off-brand.
“As some brands grow, they just revert to this generic, we want to be all things to all people,” said Kelly Goetsch, who was until recently chief strategy officer of e-commerce software firm Commercetools, which mostly works with brands that generate north of $500 million in annual sales. “As brands get bigger, they need to resist the pressure to homogenise.”
New product categories are an obvious option, but they carry risk of not resonating with shoppers: DTC footwear label Allbirds bet big on new lines of running shoes and apparel, but when customers didn’t latch on in the way they did with its signature Tree Runners, which are primarily worn as a leisure shoe, it led to excess inventory and a dip in sales.
For product expansion to hit the right note, the brand has to bring its distinct vision to a new category its customers actually want to buy. When Khaite launched sunglasses in 2023 in partnership with luxury brand Oliver Peoples, the silhouettes perfectly mirrored the structural and sophisticated cuts of its womenswear.
It’s a careful balance of creating products that can speak to new customer demographics while retaining the brand’s DNA. When Brazilian resortwear brand Farm Rio first entered the US in 2019, it launched collections created exclusively for the region that included heavier fabrics like velvet and knits in darker colours, to account for colder climates. They were a shift from the brand’s signature bold colours and light materials, but still had the playful patterns that Farm Rio is known for. Five years later, the brand’s US business now accounts for over 30 percent of annual sales and is on pace to generate north of $140 million in 2024, said Fabio Barreto, chief executive of Farm Rio’s international business.
Sometimes, it’s as simple as extending what a brand does best. Apparel brand Pact found success in October with a line of hoodies, shorts and cropped pants in a new organic velour material that it launched to see how its consumers would respond to fabrics outside of its standard organic cotton. The items sold out in two weeks, and in 2025, the brand plans to order four times more as it aims to increase revenue 30 percent to around $150 million, said Brendan Synnott, Pact’s founder and chief executive.
“We’re trying to give [our customers] fabrics that she loves, made in ways that she loves,” Synnott said.
A New Retail Tipping Point
Most brands that want to surpass $100 million in sales needs to have a brick-and-mortar strategy. But they also have to avoid opening too many stores and make sure those locations are profitable, said Taryn Jones Laében, president and founder of advisory and investment firm IRL Ventures.
To do that, brands should use e-commerce customer data to pinpoint where there is demand for a physical outpost, and be mindful not to expand too quickly. Apparel label Nili Lotan, for instance, aims to reach $200 million in annual sales by 2027, but plans to only open three new stores a year for the next three years, said Lotan, the brand’s founder and creative director, in order to manage costs. It also seeks out locations in residential neighbourhoods where they already have a base of shoppers, rather than high-trafficked commercial streets, with the aim of each store generating a profit within the first month.
“There is a personal relationship in the neighborhood between the residents and the store and the store stylist,” Lotan said. “A lot of my business is returning clients, those are clients that feel very comfortable in my store.”
International retail expansion, meanwhile, can be tested through wholesale partnerships before taking the risk of opening a standalone store in a region. Menswear brand Todd Snyder, which currently only sells DTC, both through its e-commerce channels and 19 storefronts, all in the US, hopes to launch at multibrand retailers in cities like London, Paris and Tokyo in the next two to three years to test demand in those markets before opening flagship stores, Snyder said.
“You need to be prepared to adapt your marketing and product strategies to some extent without obviously diluting or losing your brand values,” said Laében.
The Power of Brand
The companies that reached nine figures in recent years often did so with a clear point of view that attracted passionate fans. As these brands look to become household names, they have to amplify their brand awareness while preserving what made customers fall in love with them in the first place.
Todd Snyder built a following by offering an American preppy spin on slick European tailoring at entry-level luxury prices: Its Dylan suede jacket costs $1,000, while a similar model from Tom Ford is nearly $10,000. As the brand raises its profile with runway shows overseas and collections featuring bold hues and wider silhouettes, it believes its price point between ultra-luxury and fast fashion can help it remain differentiated, said Snyder, the brand’s founder and creative director.
“There’s nobody offering that middle ground. That’s really what our goal is but always pushing forward, and design is our number one priority,” Snyder said. “The world doesn’t need another brand, but I do think the world needs a menswear brand that offers great value and design.”
Still, a company’s ability to raise its prices — within reason — without harming sales, especially in a challenging economy, can serve as an indicator of the strength of its brand, said Brandon Yoshimura, a director at investment bank Solomon Partners, where he focuses on M&A and fundraising for next generation brands.
For example, luggage maker Monos has raised the prices of its suitcases 20 percent since its 2019 launch, due to demand, rising costs and improvements in design and construction, said Victor Tam, the brand’s co-founder and chief executive. The brand has seen sales jump more than 50 percent to north of $150 million in 2023, with a gross margin of over 70 percent. Yoshimura attributes a brand’s ability to up prices without significant backlash to their “customers’ willingness to pay a premium for a product because it’s a brand that matters [to them].”
A loyal customer base that will follow you through ups and downs is perhaps the ultimate key to reaching $100 million in sales — and beyond.
“As you get bigger, your chance of being blindsided actually goes down. The more diversification of channel and product, the more you de-risk your business, especially today,” Yoshimura said. “If you can scale past $100 million today, you’ve probably built something that’s got a runway to go well past that.”
