Can You Invest in SPANX?

Can You Invest in SPANX?

SPANX: The Company

SPANX is a women’s clothing and underwear company founded in 2000 by Sarah Blakley. Blakely previously sold fax machines and lamented the complete lack of size, color, fit and comfort in the pantyhose she had to wear while working every day. She saw an opportunity in the market for a women’s hosiery company with higher quality products that were actually tailored to a woman’s body. Blakely built the company herself, using $5,000 in savings and even filing the initial product patent with the help of a book she purchased from the bookstore.

While starting SPANX, Blakely fought through an industry dominated by men who had been making products for women without consulting them. By creating products from the perspective of a woman and testing the products on women, SPANX quickly became a shapewear powerhouse. Blakely continued to be a differentiator in the space, using red packaging to make her product stand out in a bleak sea of beige[^1]. After making a name in hosiery and shapewear, SPANX expanded into clothing and now includes options for men. The company became so successful and grew so quickly that in 2012, Blakely became the youngest self-made billionaire.

Since founding SPANX, Blakely has become a prominent businesswoman and entrepreneur. She has appeared as an investor on Shark Tank, started the Sara Blakely Foundation to support women in business, education and arts, and is now a minority owner of the Atlanta Hawks.

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SPANX is not required to publicly disclose their financials, but in 2020 they were estimated to generate $300 to $400 million in revenue and between $50 and $80 million in operating earnings[^2].

Can you Invest in SPANX?

Yes and no! SPANX is a privately owned company. Privately owned companies do not trade on stock exchanges and you cannot buy shares of them. That said, in October 2021, the private equity firm Blackstone acquired a majority stake in SPANX (additional investors included Oprah Winfrey, Reese Witherspoon and Whitney Wolfe Herd, the founder of Bumble!). The investment valued Spanx at $1.2 billion.

Blackstone is a public company that trades on the New York Stock Exchange under the ticker BX. So while you cannot invest directly in SPANX, you can invest in the majority owner, Blackstone. But while you can invest in Blackstone, it is a huge company with total assets under management of $974.7 billion, per their 2022 10-K[^3]. SPANX is only one small piece of Blackstone’s portfolio.

About Blackstone

Blackstone is a private equity investment company based in New York City. Spanx is far from the only company that Blackstone owns (in whole or in part). In addition to being a majority owner of Spanx, Blackstone owns or is invested in over 200 companies around the globe, including companies as disparate as AlliedBarton Security Services, Hilton Hotels, Ancestry.com and Oatly, to name a few.

In addition to their private equity business, Blackstone also has a vast real estate portfolio. The company is the “largest owner of commercial real estate in the world”[^4] and owns over 12,000 real estate assets, including warehouses, rental properties and even single family homes in the United States, Europe and Asia.

What is Private Equity?

Private equity[^5] is what is considered to be an “alternative” investment class. Alternative investments are a broad category of investments that can include hedge funds, works of art, rare collectibles (think: Air Jordans) and real estate. Private equity consists of pools of money (funds) and investors that invest in private companies or that buy public companies, taking them private[^6]. The private equity firm will then take over management of the company, sometimes making drastic changes to leadership, strategy, company structure and company composition.

How Do I Invest?

If you are interested in investing in Blackstone, you can buy shares (or partial shares) of their stock or you can buy shares of an ETF or mutual fund that is invested in Blackstone[^7]. To learn more about Blackstone you can see information about the company and their financials on Magnifi. To learn more about Blackstone or investing in general, you can ask Magnifi Personal about how to invest in Blackstone or compare Blackstone to other similar companies.

References:

1. “How Spanx Got Started: Sara Blakely on how she came up with the idea for Spanx footless pantyhose,” Inc., link.
2. Hirsch, Lauren, “Spanx, the shapewear pioneer, may sell itself, and private equity is interested.” The New York Times, 25 June 2021, link.
3. “Annual report pursuant to Section 13 or 15(d),” Blackstone, link.
4. Farrell, Maureen, “Blackstone expands further into rental housing in the United States,” The New York Times, 16 February 2022, link.
5. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested.
6. Magnifi Personal, link.
7. Exchange Traded Funds (ETF’s) and mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.