How Grace & Lace Survived the 'Shark Tank'
Shark Tank Appearance: Nov. 22, 2013
Investor: Barbara Corcoran
Deal: $175,000 for a 10 percent stake
Results: Over $14 million in sales in two years
Viewers who saw Melissa and Rick Hinnant pitch their Austin-based sock company Grace & Lace on Shark Tank on Nov. 22, 2013, had the same thought: Those frilly leg warmers would make great Christmas gifts.
Before going on ABC’s Emmy-winning business-reality show, the Hinnants received about 150 orders a day on their website. In the 24 hours after the TV appearance, more than 10,000 orders flooded in; within five days, they racked up $1 million in sales.
“I don’t think we slept for a week,” says Melissa, adding that the couple also had to care for a baby and a toddler at home. There were frantic calls to their Shark investor, Barbara Corcoran. “I remember sitting in the diaper aisle in Target to take a call from Barbara,” Melissa says. Corcoran advised Melissa that with 100,000 pairs of socks coming in from their factory, they couldn’t possibly ship that volume by themselves. She helped them hire three outside shipping companies. (They also went from six employees to 36 in 48 hours.)
“It was one of the greatest things to happen in our lives. It was also a nightmare,” Melissa says. Some customers, when told their socks wouldn’t arrive in time for the holidays, sent hateful emails. “When I get my socks, I’m going to burn them,” said one of the printable tirades, “and I hope you burn in hell, too.”
Rick says the situation took us by surprise. “It was difficult on Melissa, who’d always prided herself on having great relationships with customers.”
What made the experience especially brutal was that the company was tied to the loss of the Hinnants’ first child. Three years earlier, doctors ordered Melissa—five months pregnant—to stay in bed. While confined, she crocheted a baby blanket. Sadly, doctors couldn’t prevent premature labor, and two weeks later their daughter was stillborn.
After that tragedy, Melissa continued her needlework, and a year later knitted her first lacy leg warmers… the lead-up to a thriving business as well as a philanthropic mission that had long been her dream. When she posted a photo of the leg warmers on Facebook, so many people wanted to buy them that she launched an online boutique in October 2011. By the end of 2012, she had sold $850,000 in products.
Although they call Grace & Lace “an accidental company,” the Hinnants weren’t business novices. Melissa comes from generations of entrepreneurs, and Rick had launched more than a dozen ventures, three of them still operating. But they needed to expand to keep up with demand for their socks.
Rick had a solution. “I think we’re supposed to be on Shark Tank,” he told Melissa. Her response: “I love you, but you’re nuts.”
He applied to be on the show five times over the next few months, with no response. “But I knew it was meant to be,” says Rick, refusing to be discouraged. Finally a friend who knew a Shark Tank producer made a call that resulted in an offer to be on the show. Along with watching every episode and researching the Sharks, Rick prepared for their appearance in another way. He prayed. “I was on my knees quite a bit. God had given us this opportunity, and I was looking for guidance on whom we should make the deal with.” His prayers led to a clear answer: Corcoran. That’s why the couple, both devout Christians, jumped when Corcoran offered the full $175,000 they requested.
After the Shark Tank episode, Grace & Lace has increased its product offerings from 25 to 450, now selling an array of women’s wear such as knit hats, scarves, ponchos, cup cozies and tote bags. When Melissa needed to bring in new designers—the company has four—and she was overwhelmed with hundreds of résumés, Corcoran helped Melissa navigate the hiring process. “She guided me to focus on finding someone who was the most like me, who could be my best friend,” Melissa says. “Creating what I liked, Corcoran pointed out, has always been what’s drawn customers.”
Grace & Lace sales have exceeded $15 million (including proceeds from the online boutique), but the company doesn’t focus solely on profits. “We’re here to change the world,” Rick says. As a teenager, Melissa had done mission work in India and was dismayed by the babies in orphanages whose bellies were distended from malnutrition or who had bottles strapped to their mouths because there weren’t enough workers to feed them. “I’ve got to do something to help these people,” an 18-year-old Melissa wrote in her journal.
And she has. Partnering with the aid organization Angel House, Rick and Melissa send a portion of every sale toward building orphanages in India. In 2014, the Hinnants establish two, rescuing 100 orphans; they opened five more last December. They’ve also opened a Freedom Home in Nepal, where girls and young women rescued from sex trafficking learn occupational skills.
Their efforts impress Corcoran, who says “Melissa and Rick are a remarkable couple and an inspiration to me every day.”
To Rick, Grace & Lace is a positive force born out of tragedy. “Everyone on this planet has gone through something difficult. We all have that in common, and we can come out the other side doing immense good out of tragedy. Don’t waste the pain.”
This article appears in the March 2016 issue of SUCCESS magazine.
You might like
The tech visionary is completely changing your closet.