Knix, a direct-to-consumer intimate apparel brand, recently completed a $50-million minority Growth Equity funding run, which will help accelerate the retailer’s expansion plans.
The funding round was led by private equity firm TZP Group, with participation from existing Knix investors including Acton Capital and alongside new investor, supermodel and entrepreneur Ashley Graham.
Joanna Griffiths, Founder and CEO, who closed the round just three days before giving birth to twins, remains the largest shareholder of the company while TZP Group will take a minority stake in the business.
She said the round of financing will support Knix’s continued product innovation, brand building, and virtual fit program as well as expanding its retail store fleet in North America.
“We’re in heavy growth mode at the moment,” said Griffiths. “We’ve been experiencing tremendous growth over the past few years and are just getting started.
“We’ve been very capital efficient as a brand and especially when you look at us versus some of our US counterparts in the direct to consumer space. We’ve always been very, very intentional about our growth and what this round means for us is really leaning into the great momentum that we’ve been experiencing. It means that we are able to really serve our customers better which is what it’s all about. Create more products for them. Do larger brand campaigns and more storytelling and then scale up our ability to serve customers both (virtually) as well as through our retail store footprint.
“It’s really about doing more and more and more and leaning into the growth and the momentum that we’ve been experiencing so we can better serve our community.”
Griffiths said the company sees itself getting to about 20 retail stores over the next 18 to 24 months – half in Canada and half in the US.
“We’re really following where our customers are so you can sort of expect to see us growing as stores across the major Canadian cities over the next 24 months with our next Canadian store slated for Ottawa. That will open in the fall,” she said.
Toronto-based Knix was launched in 2013. The intimate apparel brand’s mission is to reinvent what the intimate category means both from a product standpoint, being hyper-focused on innovation and design of what suits consumers today in every stage of life and activity, and redefining the role a brand can play in the community by covering taboos and community storytelling to empower customers to be “unapoletically free.”
“Tactically speaking we’re a direct to consumer brand and a vertically integrated brand. Most of our sales come from online exclusively through our own website and in 2019 we began to open Knix retail stores. We have two stores at the moment. One is in Toronto and one is in Vancouver and in the process of opening more stores,” said Griffiths.
“We also have a little sister brand called KT. That is specifically a brand that is designed for teens and Gen Z that is centered around our first product that we ever launched at Knix which is leak proof underwear.”
Griffiths said the funding round marks Knix’s first significant financing round. With over one million customers and with an average five-year annual growth rate of 150 per cent, Knix is now surpassing $100 million in revenue over the last 12 months.
Knix was founded as a wholesale brand and switched to direct-to-consumer in 2016.
“Making the decision to pull out of over 700 retail doors and shift our focus to become a DTC brand was a turning point for Knix that led to just shy of 4,000 per cent three-year growth,” said Griffiths.
“We made that choice by listening to our customers and understanding how they wanted to shop and interact with us as a brand. That same focus of listening has driven every major decision we have made as a company and ultimately the success we experienced in 2020. We’ve always focused on innovative products that make our customers feel comfortable in their skin and they want more – more products, more retail stores and more breakthrough brand campaigns that challenge the status quo. To better serve our community we decided it was the right time to take on outside capital and accelerate our growth.”
Knix sells about two million pairs of leak proof underwear each year. The brand has leveraged its patented technology to expand its leak proof offering into swimwear, sleepwear, nursing bras and other products.
“We believe Knix is an authentic and innovative brand that is disrupting the women’s intimate apparel landscape. As pioneers in inclusivity and body positivity, with an expanding portfolio of high-quality products, the brand has amassed a large and growing community of engaged and loyal consumers. As a digitally-first brand, Knix is well positioned to seize the opportunity for continued growth, and we are thrilled to be partnering with Joanna and the team,” said Erin Edwards, Partner at TZP Group.
TZP Group is a multi-strategy private equity firm managing approximately $2 billion across its family of funds including TZP Capital Partners, TZP Small Cap Partners, TZP Strategies, and TZP Strategies Acquisition Corp.