Madison Reed on Thursday announced plans to franchise its Color Bars through a joint venture with consulting firm Franworth, according to a company press release. The retailer is planning to have 600 of the stores either sold or open within the next four years, a spokesperson told Retail Dive in an email, including 100 company-owned locations and 500 franchises.
Currently, the hair color brand has just nine physical locations, per the release, and operates primarily online, where customers can sign up for a subscription to routinely receive their hair color of choice. The planned stores will mirror those locations already in operation, though they will be a combination of company-owned stores and franchised stores.
Madison Reed will continue to own and operate stores in some locations, while the two companies will work together to develop infrastructure for Color Bar franchisees going forward. According to Madison Reed, the company is the "first digitally native vertical brand (DNVB) to use the franchise business model as a growth strategy."
As with many direct-to-consumer (DTC) brands, Madison Reed is turning to brick-and-mortar retail for continued growth. But while many DTC brands have started tentatively opening a small handful of locations, Madison Reed joins mattress brand Casper in starting big.
Casper shocked many last year by announcing plans to open 200 stores across North America by 2021. Madison Reed's plans eclipse those, with a proposed total of approximately 600 stores by 2024, a roughly 6,500% increase in the retailer's footprint. The franchised stores will be sold beginning in November of this year.
In an interview with Retail Dive in March, CEO and founder Amy Errett told Retail Dive the majority of the company's sales are online, followed by its color bars and, finally, wholesale. While the retailer has an exclusive wholesale partnership with Ulta, Errett noted that the margins in wholesale make it a less desirable channel for the retailer.
"We've always wanted to focus on our direct-to-consumer relationships," Errett said in March, noting that extends to the retailer's Color Bar locations. "We have all the same data that we have about our online customer. We built our own proprietary technology cause in many retail situations, the dot.com portion of the company doesn't talk to the store portion, so we've been really thoughtful about that."
For this new brick-and-mortar effort, which Errett said in a statement will help the brand "scale physical retail like no other," the focus is on maintaining the same experience at Madison Reed-owned locations and franchised ones.
"To us, being omnichannel means we have a relentless drive to meet the needs of our customers wherever they are," Errett continued, calling it a "responsibility" to make sure the customer has a good experience both at home, online or in a Color Bar.
While there's certainly runway for growth in the beauty space, which has thrived in recent years, Madison Reed's physical expansion plans are bold, especially at a time when so many retailers are shuttering stores.