Beauty And Wellness Retailer Shop Good Fundraises To Triple Store Count

Shop Good is embarking on its first capital raise to fuel an ambitious growth plan.

The two-unit San Diego beauty and wellness retailer is aiming to nab $4 million in series A funding by the end of the year as it looks to triple its store count in Southern California by 2027 and expand its service menu and private-label product line. With the proposed expansion, Shop Good forecasts it will reach over $18 million in revenues in five years. 

Shop Good is pitching venture capital firms, private equity firms and family offices in its fundraising process. With securing funding tough following pandemic-stoked inflation and elevated interest rates, Shop Good, which invested $50,000 to open its first store, is leveraging its burgeoning facial business to pique investors’ interest. Its facial services are 90% to 98% booked monthly. 

“Venture capital can be wary of retail. That’s just a known factor,” says Leah Kirpalani, founder and CEO of Shop Good. “We’re focusing on services as the value and on building out those high margin services to then have that retail component be the supporting cradle for our customer. That’s where we’re providing some uniqueness.”

Sach Kirpalani, CFO of Shop Good, says, “Shop Good was started as a boutique one-store retailer. We’ve moved well beyond that to much more of a lifestyle brand, and I think that’s resonating with investors more than anything else at this moment. I think investors are really wanting to see something that is true to form and is scalable.”

Shop Good’s facial services are priced from $95 to $175. Specialty facials featuring advanced massage techniques and energy devices run from $85 for a 30-minute facial directed at teens to $275 for an 80-minute facial with face rolling, buccal massage and laser therapy. The 60-minute signature $155 Shop Good Facial is a bestselling service. 

Retail drives a majority of Shop Good’s sales, although it will be leaning on services more as its menu proliferates. Leah identifies infrared sauna, light therapies, acupuncture and nutrition and lifestyle consulting as possible future services at Shop Good. 

Shop Good’s retail assortment encompasses 1,000 products from 120 beauty and wellness brands, including Kosas, Botnia, Marie Veronique, The Nue Co., OSEA, Moon Juice and Ilia Beauty. Lightweight, multitasking complexion products and sunscreen-infused products are trending with the retailer’s customers.

Launched in 2018, Shop Good’s private-label line contains over 30 stockkeeping units in body care, facial tools, makeup brushes, scented candles and branded merchandise. Further body care and facial tools are on the roadmap for the line.

Shop Good is gearing up to scale at a challenging time for small beauty and wellness shops generally. Squeezed by shrinking sales and lofty overhead costs, many shops are closing or struggling to keep the lights on. Store closures are up 31.4% in the United States this year, per retail data provider Coresight Research. 

Leah highlights Shop Good’s positioning as a wellness as well as beauty destination as key to its longevity. “Beauty and wellness aren’t going anywhere…We’re the brand to bring the two worlds together in a way that feels accessible and approachable,” she says, adding, “It’s a tough economical time, but everything is cyclical. Yes, it has been difficult like every other small business, but we see this intersection of beauty and wellness only growing and becoming more of a need. We feel like we can fill that void.” 

Established in November of 2017 with a 760-square-foot store, Shop Good opened its second location, a 920-square-foot store, in April 2019. Its first and second locations each have one treatment room. The first store relocated to a bigger 1,450-square-foot location in January 2022 and now has two treatment rooms. Forthcoming locations will have three to four service rooms. 

While Shop Good isn’t yet profitable, its sales have advanced at a compound annual growth rate of over 30% since 2018. In total, it’s generated approximately $10.2 million in revenues since 2017. Sales from its stores account for between 80% and 85% of Shop Good’s business and e-commerce sales make up the balance. With funding, it expects to leverage paid media and influencer marketing to boost awareness.

“We’ve really spent a very minimal amount of money on marketing and advertising to date,” says Sach. “We’ve been mostly word of mouth in terms of how our customers have found us. That’s gotten us to a certain point, but if we implement a broader online marketing program, I think that there’s room to run on both the brick-and-mortar and e-commerce sides.”

Leah chimes in, “We have seven years of data. We have prototypes that are plug and chug. We feel like we have all the necessary components to be able to go out and replicate that in a way that gives us total brand profitability at a really exciting time.”