Red Dress Boutique is a women’s clothing business in Athens, Georgia, that sells retail online as well. It was featured on Shark Tank Season 6 and was offered a $1.2 million investment.
Diana Harbour started Red Dress Boutique in 2005. While working at three small clothing businesses throughout her college years at Columbus State University, she developed a passion for tiny fashion boutiques. Because of the area’s booming local business sector and absence of chain stores, she built her first boutique on Baxter Street in Athens, Georgia.
A second Red Dress Boutique opened, but it eventually closed. On December 6, 2009, an online store was opened. The company achieved $15 million in internet sales in 2014. Mark Cuban and Robert Herjavec split a $1.2 million investment in return for a 20 percent stake in the company during Season 6 of Shark Tank.
On Shark Tank, a Red Dress Store Makes a Pitch:
On January 17, 2019, Diana Harbour repurchased her stock from Mark Cuban. Their Instagram account was used to announce the news. The purchase price for the buyback has not been revealed. [ In Shark Tank episode 605, Josh and Diana Harbour pitch their hugely successful online clothing business, the Red Dress Boutique. After becoming unsatisfied with her “safe but soul-crushing” employment, Diana founded her own company.
She decided that fashion was her calling, so she started selling outfits on eBay from her basement. She had the itch to create her own store later that year, so she cashed in all her chips, moved to Athens, GA with her new husband, Josh, and opened the Red Dress Boutique. Her name was inspired by a red dress she wore as a child. The store worked well, but when she created an internet store in 2010, things really took off. The Red Dress Boutique now ships hundreds of dollars worth of merchandise every day.
Diana looks for “curated fashion” all over the world. She shops for clothes puts ensembles together, gives them imaginative names, and sells a lot of merchandise. The online store made $63,000 in 2010, and The Red Dress Boutique made $7 million in 2013. That’s quite a collection of gowns! Diana wants to start designing her own clothing line while running a thriving business and raising a family. She’s probably looking for a Shark to assist her with funding for additional product lines and manufacturing contacts.
Shark Tank Recap: Red Dress Boutique
Josh and Diana are looking for $600,000 in exchange for a 5% stake in the company. They are the nation’s fastest-growing online women’s clothing business, thanks in part to the fact that the majority of their inventory is under $50. They provide samples in their signature packaging. Diana illustrates how she creates entire outfits by suggesting complementary items for each item purchased.
Their typical consumer orders five times a year and their average sale are $75. They made $8 million in sales last year and are on course to make $12-$15 million this year, which jolts the Sharks awake. The Sharks are impressed by their four-year rise and their story of bootstrapping. Diana used aggressive social media marketing to grow her company. It gets a little teary in the Shark Tank as Diana starts talking about her father’s death as a motivator.
They claim that their sales will generate a profit of $2 million. Mr. Wonderful is out because he believes the route ahead entails “cloning” Diana, which he believes will be difficult. Lori isn’t the appropriate Shark for the job, therefore she’s gone. Daymond claims they are the FUBU of their category, but he is unable to assist, therefore he is eliminated. Josh claims to know how to expand a business, and the $300,000 will be used to revamp the website in order to improve back-end data and analytics. Robert claims to be an expert in that field and offers $600,000 for a 15% stake, but Josh and Diana decline.
Mark inquires about the bottom line. They say $600,000 for 10%, then Robert offers to partner with Mark for $1.2 million for 20% ($600,000 each), and they accept!
Shark Tank Update for Red Dress Boutique:
The Red Dress Boutique’s website crashed after the concert, resulting in thousands of dollars in lost revenue. Despite this, they sold a million dollars in the six days following their broadcast. The traffic on their old site is too much for it to handle. They attempted to revamp the existing site, but it did not meet their expectations. They calculated that fixing the old site and redesigning a new site would cost the same amount of money – roughly $250,000.
The good news is that sales increased by 100% to $14 million and profits increased by 100%. The average order size per consumer has increased by $10. When they tell Mark about the new site, he believes it will be disastrous. Changes to the site produce stability issues, which is one of the reasons. He believes that if they make too many changes, sales would suffer. Diana prefers larger photographs, while Mark believes that “perfection is the enemy of commerce.” He wants to make the current site faster.
Josh and Diana are still looking for a new website. Mark believes he understands their situation and that they should trust him. He has a team in place to maintain the previous site running, and they’ve done so (with a significant boost in revenue) since the agreement was struck, so he’s wary of changing things and perhaps crashing the entire site. Josh and Diana are still planning to launch the website and inform Mark that they’ve signed a contract. Mark is dissatisfied.
Josh recognizes the danger, but Mark believes that moving the site is still too dangerous. He’ll give the new site his advise and support, but he’s still not happy. After all, is said and done, Diana still views Mark as a mentor, but she will be the one to make the choice; her main focus is improving the website’s client experience. Mark doesn’t agree with their decision, but he has promised to support them.
Josh and Diana relive the website decision in an updated piece in episode 702 and disclose they didn’t go with a new site. They eventually followed Mark’s advice, and their sales have never been higher. They used the money they didn’t spend on the new site to fund the development of a Red Dress app and their own apparel line.
As a result, Red Dress grossed more than $14 million in 2014! They have built a physical store in Athens, Georgia called Fringe. Diana stated on Instagram on January 17, 2019, that she has purchased her equity from the Sharks for an unknown sum. The company is still doing well as of May 2022. The company’s annual revenue is $29 million.
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