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Story #16Grace and LaceAustin, TX

Three and a half years ago, we had no idea we would one day be running a women’s apparel company. It feels like we were invited into something much larger, and we worked hard to capitalize on the opportunity.

A small team of employees is hard at work in Austin, Texas, at the headquarters of Grace and Lace. The office space and adjoining warehouse are fairly unassuming, but it would be a mistake to underestimate this company — or its shrewd founders, Melissa and Rick Hinnant.

Grace and Lace began in 2011 out of Melissa and Rick’s Home. The fledgling company made a single article of clothing: a lacy women’s “boot sock” that would stick out the top of a pair of boots and create an added design texture between footwear and pant leg. The boot sock struck the Hinnant’s as a niche item, until they promptly did $800,000 in sales in their first calendar year.

Before any of this started, the Hinnants were newly married and expecting their first child. Five months into the pregnancy, Melissa went in for a routine appointment and received some grave news; without surgical intervention she would give birth within 24 hours, and it was unlikely her daughter would survive. She was rushed into surgery and miraculously, their daughter survived. But Melissa was told she would have to spend the remainder of the pregnancy on hospital bed rest, or risk losing the baby. Faced with the prospect of being in bed for four months, Melissa’s decided to use the time learning to sew. “That’s really the place where my love for sewing and knitting began,” recalls Melissa.

Tragically, two weeks later, Melissa and Rick ended up losing their child. Melissa credits the knitting she learned in the hospital with helping her work through her grief. “Being able to create was an important part of the healing process for me,” Melissa says. The couple would eventually find the strength to try again, and they were later blessed with the birth of their daughter, Sienna. With their new daughter and Melissa’s learned knitting skills, Grace and Lace would take root.

That first pair of boot socks Melissa made didn’t exactly feel like a life-changer — let alone a realistic way to make a living. “It took me about five hours on the sewing machine,” recalls Melissa. “I remember coming downstairs and telling Rick, ‘I’m done. And I’m never going to make another pair of these – ever!’”

As much as Melissa had unknowingly manufactured the prototype for Grace and Lace’s product line, she accidentally launched their first marketing campaign when she wore her new boot socks out in public the next day. “Everywhere I went, women would stop to ask me where I bought them… Total strangers. I made more and put them online. Within 48 hours, we had over 400 purchase requests.”

The sudden influx of customers meant the Hinnants needed more people to make the socks. “I wasn’t planning to make another pair the first time around. No way am I going to be able to make 400,” says Melissa. “We started by hiring my friends and neighbors that knew how to sew. In fact, many of them still work here.”

Next, Melissa posted a photo of the boot socks on Pinterest. The image went viral, becoming one of the most pinned photos in 2012, and the Hinnants began to see how exciting the future might be. “We recognized that we had an opportunity that could be something big,” says Rick. “Then we had an opportunity to be on Shark Tank, and then things really got crazy.”

ABC’s hit series can make or break the future of a small business. The Hinnants walked into their moment with a clear business strategy, and in exchange for a 10 percent equity stake in their company, walked out with a $175,000 investment from real estate tycoon Barbara Corcoran.

The Shark Tank experience did more than connect Grace and Lace with capital and a world-class business mentor. It also provided phenomenal exposure for the brand, which broadened itself into a full line of women’s apparel. From chic ponchos to colorful scarves, all of their pieces still feature the same lacy softness that has come to define their clothing. The expansion paid off; Grace and Lace saw sales jump to $2.8 million in 2013.

Throughout all of their joys and sorrows, the Hinnants lean on their faith to help them cope with their loss and embrace their new success. They have also found ways to share the fruits of their labor with those less fortunate, forming a partnership with a nonprofit to help construct two orphanages in India.

“If it was just about us and making money,” reflects Rick, “we would have failed – and failed quickly – because we would have burnt out a long time ago. But being able to help as many people as we can, it keeps us inspired.” From the Hinnants, to their employees and investors, to a growing group of children in India, there are a whole lot of people who are glad Melissa Hinnant decided she should learn how to knit.

Photos by Christina Clusiau

  • Rick and Melissa Hinnant, co-owners of Grace and Lace, inside the company’s warehouse. The Hinnants call it their “accidental business.” Neither of them ever expected to one day own a women’s apparel company.

  • While Melissa and Rick Hinnant founded Grace and Lace, they are quick to point out that scaling the company so quickly was a huge team effort. The startup did a mind-bending $800,000 in sales during their first calendar year.

  • An employee fills orders for Grace and Lace, which came at an astronomical rate after the company was featured on Shark Tank.

  • Melissa Hinnant, left, talks with employees inside the Grace and Lace offices. After receiving over 400 orders in the first 48 hours of being in business, Melissa and her husband Rick did all they could to meet demand. That included hiring their friends and neighbors - a decision they cite as one of the best the ever made.

  • Melissa took up sewing and knitting while on bed rest due to complications during her first pregnancy. Tragically, Melissa was unable to carry the child to term. She turned to sewing and knitting as part of the healing process.

  • Grace and Lace employees share a laugh while filling orders from the company’s Round Rock, Texas offices. Co-founder Melissa Hinnant started the business after getting a a wildly enthusiastic reaction to a pair of lace trimmed boot socks she'd made for herself. “Complete strangers would hand me their email or phone number,” recalls Melissa. “It was surreal.”

  • After the Shark Tank appearance, Grace and Lace sales jumped to $2.8 million in 2013. The venture money and broad publicity made them a bona fide national brand.

  • These two plaques commemorate the Hinnant's collaboration with Angel House in the construction of two orphanages in India. “When I was a teenager I spent time working in orphanages in India. However, I never thought in a million years I would be able to fund the construction of anything. That’s what keeps me going. We are able to push through the stress because of them. We are changing lives and making a difference.”

Q & A

Rick and Melissa invited us into their cozy office to chat.

When did you realize you might be onto something big?

(Rick) I think fairly quickly we had a big opportunity. Within the first two months we had done $40,000 of revenue, which is unheard of for a new business. In our first calendar year, we did over $800,000 in sales.

How were you able to scale to keep up with demand?

(Melissa) A lot of credit has to go to Rick. He’s owned several businesses and — I mean — right from the start he knew being able to scale was going to make or break us. Fortunately, we were able to link arms with some really amazing people. We hired our friends and neighbors and were so blessed that they were able to come in and help us keep up with the demand.

What’s the biggest challenge of running a small business?

(Rick) Scaling. That was the biggest challenge without question. A typical business, if they grew at 20 percent it would be phenomenal. We were growing at 300 to 500 percent, and we didn’t have a clue.

(Melissa) Today, we had a major shipping deadline, and tomorrow we’ve got another 3,000 orders that need to ship. We learned a lot last year when Shark Tank aired and we did a million dollars in five days after airing. So, this year is smooth sailing after that, but we’re still improving systems and processes.

Business Details

Proprietor: Rick and Melissa Hinnant
Austin, TX
Website
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