Hey, here’s a questionable idea…
So, I’ve got an idea for you. Care to invest in a totally saturated market? Where distribution is controlled by a handful of retailers who aren’t looking to replace their current offering? Where the supply chain is rife with social issues? And where product differentiation is nearly impossible?
Having initially connected as BCG alumni, I first met Gabriela Vinader in 2009. Our first real meeting was at a Pizza Express in Kensington Olympia. Gaby was immediately charming, thoughtful, and whip-smart — she clearly moved at a million miles an hour. After an impressive start at BCG and Merrill Lynch, Gaby had become one of Amazon’s first UK employees, followed by a stint as COO of a well-funded start-up.
I therefore paid close attention when she said she was considering moving to work with her sister on her eponymous jewellery brand, Monica Vinader.
I later met Monica at their lovely family home in Norfolk, where the business was first conceived. Monica was equally whip-smart, warm, welcoming, and had unbelievably great taste. I was instantly struck by her ability to create beautiful things withoutbeing ostentatious.
A few discussions with these two remarkable siblings quickly highlighted their uniquely symbiotic relationship. A perfect jigsaw puzzle of complementary skills, matched by unparalleled ability to disagree and to debate, but always — always — to trust each other.
And, of course, I loved the product immediately. In a crowded market dominated by copycat designs, the Monica Vinader aesthetic was different from the off.
There was one key problem. Everything about jewellery screamed ‘terrible investment.’ At the time, Links of London had been a successful exit, but the rest of the industry was awash with walking wounded, companies that never managed to get past the low millions of pounds in sales. So, how could Beringea invest in such a business?
Like most great investments, the management team makes the business, and we backed the business several times over, mainly for this reason. We partially exited Monica Vinader in 2016 to Piper and Winona, two great consumer investors, and last week announced our full exit of the business to Bridgepoint Capital. So, what drove such success in an industry so fraught with failure?
The simple answer is Monica and Gaby. And we’d invest in them all day, every day, over and over again (I’m afraid they are still with the company, so don’t bother trying). It’s clearly impossible to recreate these two inspirational women, but I’ve tried to reflect on a few of the lessons I’ve learned from working with them over the past decade and a bit…
Monica and Gaby: The ultimate powerhouse duo
I’ve never before or since met as balanced a pair of co-founders as Monica and Gaby. This doesn’t mean they never made mistakes; they just trusted each other to overcome any obstacle together.
While Monica focused on design, brand, and product, Gaby took on everything operational and finance. I recall an early board meeting where there was disagreement about whether a product Monica introduced was going to make the season’s collection — Gaby wasn’t convinced we’d make enough margin on it at the price Monica wanted to sell.
What resulted was a heated discussion between the sisters that switched to their native Spanish (always an indication that it was time for the rest of the board to grab a coffee). In less than two minutes, the debate was settled. This dynamic is near impossible to replicate — even between couples or other siblings — and it made Monica and Gaby the ultimate powerhouse team.
Product innovation in a market of replicas
Quite literally! Costume jewellery (base metal, not precious stones) is often a replication of fine jewellery (precious metals and stones). In truth, walking from one counter to the other in Harrods or Selfridges, you could be forgiven for thinking everything was a replica of the previous counter.
Monica innovated in two major ways: one was her aesthetic, which genuinely stood out in a sea of sameness; and the other was in her construction, where she pioneered the demi-fine category.
Demi-fine is a category that only uses precious metals and stones at costume jewellery prices. It existed before Monica Vinader, but it had yet to break through. The company was able to do this by being creative with construction — for example, using vermeil (gold over sterling silver) rather than solid gold for some products — or using lesser-known, responsibly-sourced gemstones. To this day, the brand remains a pioneer, being the first company to use 100 per cent recycled silver.
Hard work and great leadership
Hard graft doesn’t equal success. But there is consistently a correlation between the commitment of the founders and the relative performance of the business. I’m not talking about chaining yourself to your desk, burning out, and skipping holidays, but I do firmly believe passion drives performance.
When Monica opened her first shop on South Molton Street, she was there several nights a week hosting events for friends of friends, businesses, strangers, anything to drive footfall. She made the shop work. I’ll admit I was exhausted by the number of events I was co-hosting in these early days; but Monica was there far more often than me!
Monica and Gaby led by example, and their passion as founders meant motivating their team was never a challenge. As leaders, they’ve always attracted great talent, and also took bets on putting highly capable people in roles they might not have even considered. The founders’ drive was contagious.
Consistent focus on economics
In our experience, female founders often choose to bootstrap their business with a heavy focus on profitability. This may stem from finding it more difficult to secure early investment, but there are also plenty of psychological studies explaining this phenomenon.
I’m sure it’s a combination of factors, but it was immediately apparent with Monica and Gaby. A relentless focus on the bottom line throughout our investment ensured that margins remained consistently solid in a market where many sacrifice profitability by overengineering a product or expanding too quickly.
At the time of the sale, Monica Vinader remained one of the most profitable companies in our portfolio, while also growing over 30 per cent a year. It’s interesting to note that this profile made the business highly saleable regardless of capital markets — we focused on building a great business without worrying about whether the market wanted ‘growth at all costs’ or ‘profit first.’
If we built a business that we wanted to own regardless of market conditions, then other people would also want to own it.
Can your team relate to the product?
Lastly, I’d never underestimate how vital it is to relate to a product as an investor, and I am not sure we’d have done the deal if there were no women on our investment committee at Beringea.
I’ll admit, when I first proposed the investment, the team recognised Monica’s and Gaby’s star qualities, but there was head-scratching about the product and some struggled to understand if it was actually something “different.” (Dare I say there were even mentions of the dreaded ‘I’ll ask my wife…”). Yet another reason to ensure your own investment teams are diverse, whether in gender, ethnicity, socioeconomic background, knowledge and training base, etc. Someone on the team needs to know the product well enough to advocate.
We owe a debt of gratitude to the entire Monica Vinader team, and it’s a bittersweet moment when you have to let go of your favourites. Now go shopping!
