Categories Consumer, IPO, Others

Brilliant Earth IPO: Here are a few points to note about this jewelry company that goes public next week

The company will offer 16.7 million shares at a price range of between $14 and $16

Jewelry has always played a significant role in people’s lives. As life begins to go back to normal after the pandemic and people start attending social events, they are looking to catch up on missed milestones and special occasions. This is driving demand for fine jewelry as they make for the best gifts.

Ecommerce gained massive momentum during the pandemic. Despite a slight slowdown owing to store reopenings, this convenient shopping method is pretty much here to stay. Bring these two factors – jewelry and ecommerce – together and you have Brilliant Earth Group. Here are a few facts to know about this company that is set to go public next week:

IPO details

Brilliant Earth Group Inc. is scheduled to go public on Thursday, September 23. The company will begin trading on the NASDAQ under the ticker symbol BRLT. It will offer 16.7 million shares at a price range of between $14 and $16. The IPO will be managed by a group of underwriters led by JP Morgan and Credit Suisse.

Company intro

Brilliant Earth describes itself as a “digital-first jewelry company and a global leader in ethically sourced fine jewelry.” The company was founded in 2005 and has 359 employees. It has sold to consumers in all US states and over 50 countries and has served more than 370,000 customers through its ecommerce platform and 14 showrooms. On average, the company’s showrooms yield approx. $8,000 in sales per square foot.  

Financials

Brilliant Earth generated net sales of $252 million in 2020 along with a net income of $21.6 million. This compares to net sales of $201.3 million and net loss of $7.8 million in 2019. During the first half of 2021, the company’s net sales grew 77.7% to $163 million compared to the same period in 2020. Net income increased to $10.9 million from $0.2 million in 1H20.

Market opportunity

Based on data from Euromonitor, the global fine jewelry market is estimated to be worth approx. $300 billion. In the US, it is worth approx. $61 billion. The global and US markets have grown at compound annual growth rates of 7.4% and 4.7%, respectively, from 2010 to 2019.

According to Bain, approx. 65% of the jewelry industry is made up of thousands of small and independent jewelers who are struggling to address the consumers’ rising preferences for personalization and online shopping.

Ecommerce is the fastest growing channel in the US. It has grown at a CAGR of 15% from 2010 through 2020 and has grown from 10% of sales to 31% of sales during the same period. These changes in the industry provide Brilliant Earth with plenty of opportunity to grow share.

Brilliant Earth gets a large portion of its business from the bridal category, which is the most resilient category in the jewelry industry. There is also vast opportunity within the branded fine jewelry segment, which is projected to grow at a CAGR of 8-12% from 2019 to 2025, based on data from McKinsey.

Within the jewelry industry, the largest opportunity comes in the form of millennial and Gen Z consumers, whose combined spending power was close to $3 trillion in 2020, according to YPulse. They represent the core of bridal-related products as well as a significant portion of the fine jewelry market.  

The number of people shopping for jewelry online continues to increase. As per data from Euromonitor, 31% of fine jewelry sales were online in 2020, up from 22% in 2019. To cater to millennial and Gen Z consumers, a business requires strong digital and omnichannel capabilities. Brilliant Earth believes it is well-positioned to serve the next generation fine jewelry consumer.

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