The Exchanges

Q And so you open up, and, and what happens? Do people start to come in from day one?

A Um, not really. Um, it was, you know, it was a slow, let's just call it a slow build, guys. There wasn't the demand for hats that I really had dreamt that there would be. We tried a lot of really creative out-of-the-box marketing tactics, but at the end of the day, we'd sell some hats, but it was, it was tough. I mean, I remember a lot of days, call my dad just crying and being like, Dad, I sold one hat today, you know, and I had been there like 12 hours, and I sold a hat. I was so determined to make this hat business work, um, which I didn't. I mean, five years after eating Top Ramen, um, and, like, struggling and working seven days a week and open to close, and I couldn't really afford to have anybody, I had to shut it down, and I mean, I failed.

AI assessment note: “Um, not really. Um, it was, you know, it was a slow”

Q And they were like Bracelets and, and pendants, and what were they? Necklaces?

A We did bracelets, we did necklaces, um, but I was known for my earrings, um, like chandelier earrings, and really pretty drippy stone, you know, earrings, and long shoulder dusters, and so yeah, I, I, I put those little pieces that I made, and I, I literally took 500 dollars, um, to get all the supplies I needed to, to create this collection, which was a big deal for us. Um, you know, our, Mortgage. I remembered at the time being around 1500 dollars. So, um, 500 dollars is a lot, and we, you know, we have a newborn baby, and, you know, it was like, here's Kendra, one of her crazy ideas, you know, the hat box had failed. My husband's probably like, what is she doing? Um, but I was like, I promise I'm gonna bring home a thousand dollars.

AI assessment note: “We did bracelets, we did necklaces, um, but I was known for my earrings”

Q And, like, this showroom in New York, like, sells jewelry from, from, like, a bunch of different designers?

A Yes. So this is a wholesale showroom, so they'll carry multi-lines. Some carry Multiple lines of jewelry. Some would carry handbags, jewelry, other accessories, footwear, whatever, and this is where buyers, so the buyers of department stores, buyers of boutiques, would go in. So this isn't direct to consumer. This is not a store. This is a actual showroom for wholesale, right? And so this was a really great one, and, um, again, not too big, so I felt like I wouldn't get lost, and he was a tough New York guy, um, and, you know, he wasn't kidding about the 20 minutes, and I went in, and Showed him my collection and tried to explain to him what my goal and vision was for the brand, and he said, you know, like, I'll look it over, I'll talk to the rest of the folks that work with me, and we'll get back to you, kind of thing. And, you know, 22 minutes later, I walked down, kind of deflated, thinking, ah, you know, I don't think he's gonna, like, I don't think that went as great as I wanted it to. And it was about three days later, and I was driving on Loop One in Austin, Texas, and, you know, my cell phone rang, and He said, Kendra, um, we want to carry your line, and I had to pull over, like, on the highway, which was not safe. But yeah, it was, uh, so then that, you know, we got a New York showroom, and we really, we sold into Nordstrom, the next market.

AI assessment note: “Yes. So this is a wholesale showroom, so they'll carry multi-lines.”

Q How did you, how were you able to scale up from that one store? Did you have to eventually get outside investment?

A So, not with the second store, um, or the third store. So we didn't bring in investment capital until 2012, very small amount. I mean, I was running a business every day that was bigger than it was the night before. I didn't know what I was doing. Um, and I knew I needed to bring in a more qualified team. So, you know, in 2010, we still only had seven people. Wow. You know, we were all green, right? We were young, we were hard working, we definitely Were, you know, passionate and excited, but I needed to get some gray hair in the building, so to speak, um, and in order to do that, you know, we needed to also have money to do that, and so we brought in, um, a COO who is fantastic and with me to this day, um, and, you know, I stopped paying myself actually when I hired him, uh, because I knew we had to have him. I knew I needed that, you know, expertise, and I remember going to our controller, who's now my VP of HR, And, um, and saying, you know, Christine, like, we gotta hire this guy, and she's like, Kendra, we can't afford him, and I was like, we can't not afford him. I said, stop paying me. We're hiring him, and, um, and they did, and then finally, you know, our, my COO, Lon, who is with me still, he laughed. One day he realized that I wasn't getting paid, because I was like, it wasn't that long, but he's like, um, I think we need, I think you should Maybe get paid. I'm like,…

AI assessment note: “we didn't bring in investment capital until 2012, very small amount.”

Q Yeah. And what about your own life? Like, I mean, were you, were you married at that point?

A Yes. Um, got married in 2000, so about the time that was all going bad. I did have that one, you know, bright light of, of getting married, and um, and then in 2001, having our first son. So, that was really a catalyst for me because the job that I was doing, you know, at the magazine required me to travel a lot. So, I really knew at that point that I needed to figure out something else, and I realized that, you know, what I loved was I love fashion. I love design. And with the hat box, I saw what a difference what I loved could do to help other people with, you know, the hats for women undergoing chemotherapy. And I thought, God, if I create a company that could also do something really good, that that would be success for me. And that literally was the foundation of Kendra Scott.

AI assessment note: “Yes. Um, got married in 2000”

Q Yeah. What do you think when you're like walking through an airport or in some city and you see somebody wearing your jewelry?

A Oh my god, I get so excited. I still get, I mean, I see people all the time, and you know, I used to, uh, carry my business cards around, and I used to get, like, I'd see somebody, and I'd write 15% off, and I'd sign my name, and I'd be like, go into the store, show them, like, you're, I love you, you know, you're wearing my, you're wearing your Kendra, you look so beautiful, and so now we have caught you in your Kendra cards, they're like a gold ticket, and we give them to all of our employees, and so if you are wearing Kendra Scott, and one of our Kendra Scott employees see you, they, like, literally will run up to you and be like, we Hi, you and you're Kendra. You look so great, and we give you this golden ticket, um, and that came from my business card, but I love it. I always go up to people. I'm like, you look so great. Thank you so much for wearing our jewelry. It never, ever, ever gets old. Ever.

AI assessment note: “Oh my god, I get so excited. I still get, I mean, I see”

Q Wait, you, you, you started to, to, to make the hats?

A Yeah, so initially I wasn't making the actual hat, so I was buying hats, and then I kind of started thinking about it, and I'm like, you know, there are no, I was trying to buy hats, and I couldn't find them anywhere. I'm like, no one is selling hats. Where are all the hats? And so my first business was creating a hat store with the intention that I could also have a space and a place for people undergoing chemotherapy to come that was private, so they could have a private area to try hats on. And I had this big Fantasy that it was going to be like, 1930 again, and everyone was going to wear hats, and there was going to be this big movement of people wearing hats again.

AI assessment note: “initially I wasn't making the actual hat, so I was buying hats”

Q Wow. How did you, how did you get the idea?

A So, you know, there were times when, you know, we'd be in the hospital, you know, and he's in for treatment, there could be seven hours in a procedure, so sitting in a waiting room is really, really hard to do for seven hours, so we would go out, we would meet people, we'd be in the cafeteria, we'd meet women and families, and I could just see, one, you know, it's so devastating for, um, anyone who's going through cancer treatment, um, but for a woman, you know, to lose your hair as well, it's a part of your identity, and, You know, there weren't great options for these women, and I just started hearing this struggle, and I loved hats, and I loved fashion, and I thought, you know, I could take some hats, and if I could, you know, put in some cotton linings, comfortable headbands, things that would make them more comfortable to wear, because a wool, you know, hat is not comfortable when you've lost your hair, right? So this could be great.

AI assessment note: “I loved hats, and I loved fashion, and I thought, you know, I could”

Q How did you even know, for example, like, how to price things and, and how to do all that stuff?

A I didn't, Guy. I mean, come on. Um, I kind of learned as I went along. Um, then when we went overseas, we were able to buy better, you know, through volume. We were going direct to stone manufacturers versus going through importers and exporters and, you know, all these other middlemen. So, so it worked out that we were able to actually really price smartly. And for me, the more direct I could go, I could pass that value on to our customer and she could get the most beautiful stone quality handcrafted jewelry. But, you know, Under a hundred dollars for a pair of earrings, and it really was about, like, getting out there and trying to source, you know, uh, the manufacturers and the stone cutters to do it.

AI assessment note: “I didn't, Guy. I mean, come on. Um, I kind of learned as I went along.”

Q What did you, at that point, I mean, your stepfather was, he was battling cancer, um, himself, and at the same time you launched this, this company, this business?

A Yeah, so, you know, it was a really crazy thing. I remember talking to my father and my mother and my stepfather and saying, you guys, I want to, I want to do this. And, you know, my, unbelievably, and I look back now, like, that my parents were like, okay, do that. I mean, I think my mom was going through a lot, so maybe she wasn't in the right state of mind, but she's like, you know, do it, honey. And my dad was the same way, and he said, look, you're not spending the money I'd save for college, you know, and it wasn't much. I remember it being like 20,000 dollars. That I bought my first inventory and signed a lease and all that kind of stuff.

AI assessment note: “I remember talking to my father and my mother and my stepfather”

Q How did you finance that? I mean, the recession hits. You are, you know, kind of profitable, but you're not really making crazy amounts of money. So how were you able to put the money into getting a retail space and going that route?

A So a great thing happened. I was with, when I was with this bigger bank, and we're not going to name any names, but when they were about to call our line, we had a local Texas bank who loved me, loved our brand, um, and took our line of credit on, gave us some extension, uh, in addition to the line of credit that they took on, which was phenomenal, and really helped us. Um, fortunately, because of the recession, all these stores were shuttering. So I was, you know, South Congress, which is now the hottest, hippest place in Austin, in In, in, in, in, in, in, in, in, in, in, in, in, in, in, Burly guards at the gate, you know, the door. It's, it's not exactly your warm and fuzzy feeling when you walk in, and so we wanted to take all the scary out of, out of it, and so the cases were open. Jewelry was freely displayed on, you know, tables, and you could touch and feel it, and we had signs that said, have fun, try on. Uh, you know, we had the color bar where you could sit at the bar and customize your own piece of jewelry and pick the stones that would go in the setting, and then our girls right in front of you Would set the stones while you're drinking a glass of champagne. It was fun. It was fun, and it was fresh, and it was, the jewelry was attainable. And I think in the recession, it was refreshing for people because it was something that they could afford to do, and it made the…

AI assessment note: “we had a local Texas bank who loved me... took our line of credit on”

Q Yeah. When did you, when did you decide to, to open a brick and mortar shop?

A So, do you remember I said I would never go into retail again after the hat box? Um, those are like famous last words, but, uh, I didn't for a long time. I was honestly really scared, uh, really, really scared, and I thought this is much better. I can design, you know, we're manufacturing, and I'm selling to these wholesale partners. They have the product, and they have to sell it, right? Like, it was safe, and we were growing, but we weren't growing dramatically. It was like, We were at about a million, 1,000,005 a year. You know, at this point now, I was a single mom. So, you know, I, I was able to pay our rent and do the things I needed to do.

AI assessment note: “We were at about a million, 1,000,005 a year.”