Diamonds / Industry / Retail / Technology

Jewelry E-tailer Brilliant Earth Files For IPO


On Aug. 30, Brilliant Earth Group, owner of the San Francisco–based jewelry e-tailer of the same name, filed for an initial public offering (IPO) with the Securities and Exchange Commission.

The filing values the company at $100 million, but that number appears to be a placeholder; in a statement issued Tuesday, Brilliant Earth Group said that the “there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.”

Current plans call for the stock to be traded on the Nasdaq exchange under the listing BRLT.

The Form S-1 filing notes the following:

• Like most jewelry companies, Brilliant Earth has been enjoying a lucrative year. In the first half of 2021, net sales totaled $163 million, up 78% from the $92 million the company earned in the first half of 2020.

The company’s 2020 revenues totaled $251.8 million. In 2019, they were $201 million; in 2018, $148 million; in 2017, $112 million; and in 2016, $83 million. Its current average order is $3,152.

• The company is presently profitable, though that’s a relatively recent development.

It posted an $11 million profit for the first six months of 2021, and a $22 million profit for the year 2020. In 2019, it posted a $7.8 million loss. It has $65 million outstanding borrowings under a term loan.

• The company is owned by private equity fund Mainsail Partners III, as well as its founders, CEO Beth Gerstein and executive chairman Eric Grossberg. (Grossberg served as co-CEO until March 2021.) After it goes public, Mainsail and the two founders will have more than 50% of the Brilliant Earth’s voting power, which classifies it as a “controlled company” under Nasdaq rules.

• Brilliant Earth’s site lists more than 100,000 diamonds, though, like other e-tailers, the company has an “asset-light” model with “very little inventory.” Since 2018, its general inventory turn has averaged 10 times a year.

Like many digital-native brands, Brilliant Earth has heavy advertising costs: In 2020, its marketing expenses totaled $47.1 million, and in 2019, they were $57.1 million.

• Also, like many e-tailers, the company is expanding its physical footprint. It currently has 14 showrooms. The filing says that metro areas with a Brilliant Earth showroom boost local revenue an average of 80% their first year, and that approximately 50% of customers who have a showroom appointment ultimately purchase. On average, its showrooms yield approximately $8,000 in sales per square foot.

“We believe that we can achieve near-national showroom coverage with under 100 locations,” the company said in the filing.

• Other future plans include growing Brilliant Earth’s international business—overseas sales currently comprise only 6.8% of its revenue—as well as offering more fine jewelry.

Stanford University Graduate School of Business classmates Gerstein and Grossberg founded Brilliant Earth in 2005, sensing the need for a socially conscious diamond e-tailer.

Explained Gerstein in the filing: “[When I] was shopping for an engagement ring, I knew it would be a once-in-a-lifetime purchase, and I wanted a ring that I could truly feel good about wearing. And yet, when I went into different jewelers and asked, ‘Where do your diamonds and jewelry come from?’ I could never get a straight answer.

“Meanwhile, Eric was researching the jewelry industry in business school and hearing from friends who were disenchanted with their own jewelry shopping experiences. They felt unwelcome in luxury stores that seemed out of touch, or ignored in mall jewelers sandwiched next to fast-food chains.”

The company’s first order was shipped out of Gerstein’s apartment. The company originally sold only Canadian diamonds, but it now also offers diamonds from Russia, Namibia, South Africa, and Botswana. It also sells lab-grown and recycled diamonds and Moyo Gems.

Brilliant Earth prides itself on tracking diamonds and ensuring they are ethically sourced and “Beyond Conflict Free.” In its filing, the company stated it now offers “more than 10,000 blockchain-enabled diamonds [which are tracked from] the mining operator, through cutting and polishing, to the customer,” in partnership with Everledger. It also offers GIA Diamond Origin reports.

The company employs 345 people and 14 part-time employees. It appointed Zack Kramer, a former vice president of audio company Sonos, as president in March, according to LinkedIn.

Current board members include the two founders; Ian Bickley, the former president of global business development and strategic alliances for Tapestry, which owns the Coach, Kate Spade, and Stuart Weitzman brands; Jennifer Harris, the former chief financial officer at Q2 Holdings, a digital banking company; Attica Jaques, the current head of global brand marketing, consumers apps, at Google; Beth Kaplan, former president and chief operating officer of Rent the Runway; and Gavin Turner, founder of Mainsail.

Top: A Brilliant Earth showroom (photo courtesy of Brilliant Earth)

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By: Rob Bates

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