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Rags to Raches Shark Tank Update

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Rags to Raches was introduced as a homemade kids’ clothing brand which was started by a mother initially by selling her products on various social media platforms that were loved by many parents for their children. She altered various clothes and made a single-piece product that she called “Rompers”.

Rompers became her USP product as they are very stylish, fashionable, and comfortable as well and come with an elastic neckline along with better quality fabric materials.

Rags to Raches at a glance

SeasonSeason-07, Episode-19
Business IdeaHomemade Kids Clothing Brand
FoundersRachel Nilsson.
Asked For$200,000 for 10% of Equity.
Accepted Deal$200,000 for 15% of Equity.
SharksRobert Herjavec
Business IdeaIn Business.
WebsiteRags to Raches
Buy on AmazonBuy Now!

Index:

Founder Story:

Rags to Raches is created, developed, and founded by a young woman entrepreneur and a mother named “Rachel Nilsson” from Alpine, Utah. She started her business by selling handmade kids’ clothing to various parents that are willing to buy only a single piece of clothing for their child through various social media platforms and ended up incorporating a fashionable business.

She started selling clothes online after her husband lost his job and source of income and they were facing various financial problems. They then decided to do something on their own and started making various designs of clothes that they started posting on Instagram where they had got very positive responses and parents liked their designs and became their potential customers. After that, they grew up as a major brand in the kid’s fashion area.

Did Rags to Raches get a Deal on Shark Tank?

Rags to Raches was featured on ABC’s famous reality show Shark Tank in Season 7 and Episode-19, as a kid’s fashion and clothing brand. She introduced her products to Sharks and explains the story behind his inspiration. She told them that she started this as a side business in 2014 to fulfill the financial requirements of her family after her husband lost his income. She started her business in the basement of her house and started selling her kid’s old clothes online on various social media platforms for earning some income. After receiving so many positive responses, she decided to grow up and scale her business. Thus, she started creating and designing various kid’s fashion designs out of which one becomes the most popular called “Rompers”.

She gave the samples of Rompers to the Sharks and asked for an investment of $200,000 in exchange for 10% of her company’s share. Sharks liked the product and asked her for the sales matrix as she made over $792,000 in just one year, out of which she saved a profit of $280,000. More than 88% of her sales come from online selling and she has made approximately 95% of her sales just by selling “Rompers”.

The cost of manufacturing each unit of Rompers ranges from $7 to $10 she easily manages to sell for $37 to $50. She does not deal in wholesale because she doesn’t want to disturb her online selling. Sharks loved the product and the valuation too but they were afraid because Rachel was not selling her products in the offline market as she can miss so many potential customers.  Then, she answered him that she can think about that too.

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Robert thinks he can help her and offered her an investment of $200,000 for 20% share of her company. Kevin also offered her an investment of $200,000 for 20%. Later, Daymond also offered her the same $200,000 for 20% along with the offer of licensing and branding her products. She liked all the offers but decided to get into a deal with Robert. She asked Robert if he can deal at 15%, and Robert agreed. Hence, she gets a deal on Shark Tank.

What Happened to Rags to Raches after Shark Tank?

After she appeared on the ABC’s famous reality show Shark Tank, she got a massive hike in her sales as the effect of the show as she received a phenomenal jump in the orders of clothes and she was able to make five times more sales than her company made last year, just in a month after the show. However, the deal with Robert has never come to the end but Rags to Raches become a major brand in the kid’s clothing segment in America. She established her manufacturing hub and hired many employees and made available her products in over 100 retail stores and made on Amazon also.

In the year 2018, she received an investment of $1.5 Million and collaborated with Mickey Mouse to launch the Mickey Mouse edition of her clothes which was really loved by children.

Competitors of Rags to Raches

Rags to Raches is one of its kind and a unique brand that offers kid’s fashion clothes with some really nice features which are available in the market. But, being a unique brand, it also has to face competition from various businesses. Some of its competitors are:-

  • Hatley;
  • Fresh Picked;
  • Beloved;
  • Fawn Designs;
  • Native; etc.

Net Worth of Rags to Raches

The company was valued at $1.3 Million at the time of its Shark Tank appearance, but it has grown its business very sharply and become one of the major players in the kid’s fashion segment as the owner once said that she wants to make its brand “Amazon of Kids Fashion”. Currently, their revenue is going up to $4 Million annually.

Is Rags to Raches Still in Business?

Yes, the company is still in business and became a major player in the kid’s fashion segment in America as the company is selling its products in over 100 retail and online stores through its website and on Amazon.

Rags to Raches socials links:

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FAQs:

What is Rags to Raches?

initially by selling her products on various social media platforms that were loved by many parents for their children. She altered various clothes and made a single-piece product that she called “Rompers”.

Who founded Rags to Raches?

Rags to Raches is created, developed, and founded by a young woman entrepreneur and a mother named “Rachel Nilsson” from Alpine, Utah. She started her business by selling handmade kids’ clothing to various parents that are willing to buy only a single piece of clothing for their child through various social media platforms and ended up incorporating a fashionable business.

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