Dive Brief:
- After hiring a new chief financial officer in March, hair color brand Madison Reed announced it has raised $33 million in new financing, according to a company press release. The money will go towards growing the company’s “successful omnichannel business.”
- The funding was led by Sandbridge Capital and included participation by Marcy Venture Partners, which was co-founded by music artist Jay-Z.
- Madison Reed plans to have 80 Hair Color Bar locations opened by the end of the year, hire 850 new colorists with full-time benefits and invest in innovative products to expand its portfolio.
Dive Insight:
As in-store shopping bounces back, Madison Reed is doubling down on its omnichannel strategy to reach customers anywhere they are. The company hired former Dollar Shave Club CFO Jose Zuniga as its new CFO in March, with the intent to support digital and physical growth.
“Madison Reed’s innovative omnichannel approach maximizes convenience while delivering a compellingly modern consumer experience across the board,” Ken Suslow, Sandbridge Capital founder and managing partner, said in a statement.
The company has over 60 Hair Color Bar locations open and is planning to grow its presence specifically in New York City, South Florida, California, Chicago, Washington, D.C. and Texas. Madison Reed is also planning to expand its wholesale business, which includes partners like Ulta (as well as its Target shop-in-shops) and Amazon.
Madison Reed has been focused on rapid growth over the last few years, raising $52 million in February 2021. This latest round brings the company's total capital raised to nearly $250 million to date. The company began offering free virtual hair color consultations last year and started selling men’s hair products in 2020. This is in addition to the company’s subscription at-home hair color offering. Like many retailers who have subscription-based models, Madison Reed has focused on adding other shopping options to diversify its business.
The hair color market is only continuing to grow, expected to surpass $40 billion by 2023, according to Statista. In fact, Madison Reed previously said it grew in 2020 by 130% and almost doubled its customer base. Despite the pandemic’s impact on in-store retail, the company has bet big on physical stores over the past couple of years while maintaining a strong digital presence, positioning itself to provide an experience tailored to different customer preferences.
