Kristin Myers: Every day on this show, we're going to be taking a look at one company that isn't public yet. We're going to dive into where it started, what it's worth, and what stands between it and the bell that is just behind me.
Now, if you're a public company, you're going to be covered by Bloomberg or by CNBC. But the companies that aren't public yet have almost nobody until the day they file. We are going to be changing that because we're going to be covering them before that.
So let's take a look at today's company. It is Rowan. And if you've ever walked past a mall kiosk with a piercing gun, you probably already know the category. Founder and CEO Louisa Schneider is here at the desk with me. Now, the road from an idea to the opening bell starts right now.
So Rowan was founded in 2017 and is headquartered in New York. Now, here is Rowan's pitch. They believe that piercing is a medical procedure, so a licensed nurse should be the one that is doing it. So every Rowan piercing is performed by a licensed nurse.
Now, the company calls that the Rowan Clinical Piercing Standard and has trademarked it.
The jewelry is the other half of the business: hypoallergenic, only 14- to 24-karat gold, sterling silver, titanium, and platinum. Now, Rowan says that data from just over 7,000 piercings puts its rate of adverse outcomes at just under 1%. Now, that is far less than the industry average of almost 30%, and today they have more than 120 locations.
So I want to bring in Louisa Schneider, Founder and CEO of Rowan. Louisa, thank you so much for joining us today.
Louisa Schneider: That was amazing.
Kristin Myers: So I want to give everyone just a little bit of a background on you, and I want to make sure I get this correct. So you spent your career in finance, Morgan Stanley, J.P. Morgan. You were at a hedge fund, right?
Piercing seems a long way away from the trading floor, right where we are right now.
Louisa Schneider: You're not wrong.
Kristin Myers: So why did you decide that this was what you wanted to do? Was there, you know, a moment that that sort of light bulb went off for you?
Louisa Schneider: There absolutely was. So my background, 100% accurate, finance, and had been working always with the consumer. So really with an eye on the consumer, thinking about brands and the trust that a consumer has in a brand and why that matters.
And I was helping to build a hedge fund. The founder of the fund had worked for Carl Icahn and David Tepper, really skilled in real estate and consumer. And it was around the time of Claire's first bankruptcy in the past decade. I say first because they have had two.
And the fund was actually looking at trading the bonds of that company. And I realized that the company had been a north of $3 billion LBO, which for me was really eye-opening to realize the size of the company even multiple decades ago.
And it was also very eye-opening that my daughter, who was really young at that time, she was about a year old, was not pierced but wanted to be pierced. I wanted her to be pierced, but we didn't know where to go, and I didn't want to take her to a mall.
I had been to a lot of malls as I was doing research for this fund, and at the time, our pediatrician did not pierce ears. My parents were both doctors, and so an idea came to me, literally walking down the street, that it made sense for a medical professional to do the piercing, but there was nowhere to go to be trained to do that.
And if I could possibly build a company that would train and teach nurses how to pierce ears, given that they were already super skilled with bloodborne pathogen work, bedside manner, really everything that makes a piercing successful and, as you said, leads to a much lower than the industry-standard negative outcome, we could potentially have something that would be lightning in a bottle.
And it has been.
Kristin Myers: So I want to ask you, because you mentioned Claire's, and we are going to talk about it a little bit later. As you're saying Claire's, I'm sure a lot of folks that are watching this remember Claire's, the stores, how you could go in. There's someone there with a piercing gun.
Louisa Schneider: Absolutely.
Kristin Myers: The category is not new. Now, is that piece that you're talking about, right, that you didn't want someone with a gun or you didn't want to go to the mall, was that the piece that you decided was really broken, that lack of a medical professional and a medical provider that was doing this? Because, to your point, not every doctor's office is going to pierce their ears.
Louisa Schneider: Well, I think that's an element of it. But in many ways, I was looking at the industry and doing what my finance professors at Columbia Business School had talked about, which is really inverting the business, thinking about it in a different way.
And what I saw missing was that piercing was the most important thing. And for so many of the incumbent companies that are performing this service, it is a side piece of the business. Perhaps it drives foot traffic, but it is certainly not the most important and most integral raison d'être.
At Rowan, piercing is what we do. We're not a fashion retailer. We are a medical service-based business.
Kristin Myers: So a licensed nurse in every chair doing all of these piercings, I hear that and that's great. But I hear that and I think that those labor costs must be incredibly high, right? Compared to, I don't know if there were teenagers holding those piercing guns previously at those, you know, Pagodas in the mall.
So walk us through a little bit of that math and the scalability, right? It's one thing to have 100 stores, but then how do you have 1,000, paying nurses for every single store?
Louisa Schneider: Well, I want to say one small edit to your incredible description of the business is that the nurses working at Rowan could be licensed practical nurses, LPNs, or RNs, right? There is a different pedigree there.
With that said, both come to us really eager and excited to do something artistic and also to learn about business.
And when it comes to pay, you're absolutely right. That is one of the most expensive pieces of running a successful business. But investing in the people who do the piercing is absolutely a priority of the company.
And so we are taking labor costs in markets where we open and where we operate, and we make sure that we're within a competitive band. And then we are also paying 100% of the tips that are given by a customer on any service to the nurse performing that service.
And so our nurses view working at Rowan as not a shift or a weekend, but really as a year. Piercing is something that is happening with frequency all year, but it is very popular at certain times of year. So our nurses can find themselves exceptionally busy, earning tremendous tips right after the holidays, for example, during the back-to-school season. Interestingly, in July, we call it Christmas in the summer.
But overall, our goal is to provide a very good wage for our nurses and to continue to invest in them with incremental training and upward mobility opportunities. If they're interested in learning about business, inviting them to join us in the corporate side of the business to learn about marketing or other parts of the company.
Kristin Myers: So Claire's started out as a publicly traded company when it was founded in 1961, and at its peak, it owned almost 3,500 stores. And by its own count, it pierced more ears than anyone on Earth.
And in 2007, the company, which had been publicly traded for over 40 years, went private in a leveraged buyout for $3 billion, as Louisa was saying just a moment ago.
Now, Claire's filed for bankruptcy protection in 2018, pledging to shed its debt. And in 2022, the company filed to go public again. But just last year, Claire's had pulled its application to IPO and filed for bankruptcy again.
So, same customer, same procedure, but Rowan's bet is that the difference is who is holding the needle.
So Louisa Schneider, Founder and CEO of Rowan, is still here with us. Louisa, thank you so much for sticking around after the break.
Now, we just heard that story about Claire's. It's a bit of a roller coaster. And I remember, as you were saying, that was kind of when the light bulb went off for you, that leveraged buyout for Claire's.
So I do want to ask you, how are you thinking about making sure that Rowan's story doesn't repeat Claire's history?
Louisa Schneider: So my background is finance. I worked in distressed, and I ran a program called the Value Investing Program at Columbia Business School. And the focus there, it's really on the premise of the investing principles that Warren Buffett learned when he was a student at Columbia, and so much of it is really making sure that you are allocating capital in a way that returns above the cost of capital and that you're being responsible about everything.
So the business is, under my watch, something that I think about every day. And everything that we do, every marketing dollar that we spend, we are ensuring that there's a return. And I think that really does make us unique.
Tomorrow, I'll be on the road going down to Myrtle Beach, near where I grew up, looking at property there. But I make an effort to go see every location that we are considering signing a lease for. I want to walk the property. I want to understand how the customer might approach the storefront.
I want the way that our store looks and feels, both externally and internally, to be unquestionably Rowan. And then I always want to put myself in the shoes of not only the customer, but also of our employee.
She is our most valuable asset, and we want to make sure that where she's working is bright and sunny, that she has a safe place to take a break, all the things that you need in order to be able to address our customer with the care that she deserves.
Because while I might be doing many piercings in a day as a Rowan nurse, for every piercing, that is that little girl's perhaps first and only ear piercing. It is a moment she'll remember for the rest of her life, so I need to be able to do it in a way that merits how important it is.
Kristin Myers: So, speaking about brick-and-mortar locations, you guys crossed 100 stores last year. You're now past 120, which is incredible. Talk us through some of the challenges that come with scaling so quickly.
Louisa Schneider: Absolutely. You know, nothing can prepare you for it. It's a whirlwind. But when you have product-market fit in the way that we do, you want to keep going, you want to keep pushing, and it pulls you as well.
And for me, it's about team. I do nothing alone. Everything that we do is done together. So transparency, coordination, excellent communication, technology is critical. Being able to communicate with data and make quick decisions based on data is absolutely critical.
Kristin Myers: So I want to talk to you a little bit about the jewelry piece because we've talked a bit about the piercing.
Louisa Schneider: Yeah, the fun part.
Kristin Myers: So piercing is the one-time purchase, or can be, depending on how many piercings someone wants to get, right? But the jewelry is a repeat part of that business.
So which side is actually, you know, paying for some of the stores? Is it the jewelry side or is it the piercing side?
Louisa Schneider: Well, I'm sure that you guys have had a taste of the cost of gold and where that has gone over the past few years. So a commodity that was trading, you know, $1,500 an ounce going up to $7,000 an ounce. This is the type of volatility that we have navigated at Rowan, given that gold is a core metal alloy in many of our products.
But you hit the nail on the head. The jewelry piece is the lion's share, often, of the cost of a piercing because when you are getting pierced, whether you're getting pierced with a hollow needle or an earring, you're not leaving without jewelry in your new piercing.
And so that does certainly allow us to earn what we need to earn in order to pay our incredible nurses what we want to pay them and be profitable.
Kristin Myers: So I have to ask, are you experiencing any kind of pressure because of the higher prices for some of the jewelry? As we're talking about these commodity prices, we've seen record highs in gold, record highs in silver recently.
Are you seeing the customer and the consumer perhaps stepping back a bit from wanting to purchase some of this jewelry because it is becoming more and more expensive?
Louisa Schneider: It's a great question. I think, again, this is where we've really taken a close look at the business. Who is our customer? What does she want? What is she purchasing?
And what we have found is that for fresh piercings, for new piercings, the recommended metal alloy, and oftentimes the required metal, is titanium. It is not 14-karat gold, and therefore it hasn't been as big of an impact on Rowan as it would have been on a traditional jewelry company.
We have also seen a willingness and a want for a more expensive product. We're actually coming out this year with our first store in the Palm Beach market, and we're creating a bespoke collection for that customer.
She wants jewelry in the hundreds to thousands of dollars, real diamonds, real jewels, and certainly 14-karat gold and above in terms of quality of metal.
And we have not seen any slowdown. If anything, we've seen an uptick at the very high end. But we've also seen customers who are preferring a stainless steel versus a white gold, and we are absolutely able to service that customer with the same level of nurse care that we would.
Kristin Myers: So I have to ask, we have about 45 seconds left. I could talk to you for another hour about this, but I have to ask because this is Startup to Stock Exchange here on the floor of the New York Stock Exchange.
How far off are we from that bell ringing? When do you think we might see Rowan hitting that bell behind us?
Louisa Schneider: Well, we are head down. So, you know, I spend most of my days in our headquarters in Larchmont, New York, or on the road. And we know that the market, after having done a lot of work, could easily bear 10 times the number of doors that we currently have open today in the domestic U.S. alone.
And internationally, the white space is massive for us. So, could be sooner than later. But in terms of overall growth, we have quite a ways to go.
Kristin Myers: All right. Well, we will definitely be watching. Louisa Schneider, CEO of Rowan, thank you so much for joining us today. I'm excited to see what comes next.
