Spanx: From a Company of One to a $1.2 Billion Valuation

An Undergarment That Didn’t Exist

In the late 1990s, Sara Blakely was selling fax machines for an office supply company called Danka, a job she held for seven years. She had about $5,000 in savings, had never taken a business class, and had no experience in fashion or retail. What she did have was a problem. She wanted a smooth look under a pair of pants, so she cut the feet off a pair of control-top pantyhose and wore them underneath. The look worked, but the pantyhose kept rolling up her legs. As she later told Forbes, “I just needed an undergarment that didn’t exist.”

A Company of One

Blakely spent about two years developing the idea while keeping her sales job, building her prototype at night and on weekends. She researched hosiery patents at the Georgia Tech library. To avoid paying thousands of dollars in legal fees, she wrote her own patent application with the help of a book, then paid a lawyer $700 to write the formal legal claims section. She set aside $150 to incorporate the company. After learning that most U.S. hosiery was made in North Carolina, she cold-called mills for months, then drove there to pitch them in person. Two weeks later, one mill owner agreed to make her product. She tested prototypes on her mother, her grandmother, and friends. A friend who had just graduated in graphic design helped her create bright red packaging that stood out from the beige, white, and gray packages on store shelves, and she registered the Spanx trademark for $350.

In the fall of 2000, Blakely got a 10-minute meeting with a buyer at Neiman Marcus’s Dallas office. About five minutes in, she modeled her own pants with and without Spanx in a restroom. The buyer agreed to stock the product in seven stores. Blakely then asked friends who lived near those stores to buy Spanx and offered to pay them back. That November, Oprah Winfrey named Spanx one of her favorite products. The company had no website yet, so Blakely quickly put one together; she later said she ran a sizable online business for $18 a month. She quit Danka two weeks before the show aired.

In those early days, Blakely ran the business herself. Working out of her apartment, she answered customer service questions, stayed up at night packing and shipping orders, and handled marketing and public relations, including contacting journalists directly. According to Forbes, Spanx brought in about $4 million in its first year and $10 million in its second.

Building a Team

As the company grew, Blakely began handing off major jobs. In 2002, she brought in Laurie Ann Goldman, who had spent 10 years at Coca-Cola, where she ran licensing in 54 countries. Goldman, Spanx’s fifth employee, started as a consultant and later became CEO. She wrote the company’s first business plan and set out to run Spanx with the discipline of a public company, including hiring the accounting firm Ernst & Young to audit its books. With Goldman running the business, Blakely eventually stepped back from day-to-day management.

By 2012, Spanx had 125 employees and sold about 200 products through 11,500 stores and websites in 40 countries. Its products were manufactured in 15 countries. Forbes estimated yearly revenue at just under $250 million, with a net profit margin of about 20%. Blakely still owned 100% of the company, which had no debt, had never taken outside investment, and had never paid for advertising. That year, at age 41, she joined Forbes’s list of the world’s billionaires; Forbes reported that she was the youngest woman added to the list that year who had not gotten her wealth through a husband or an inheritance. In 2014, Goldman stepped down, and Blakely hired Jan Singer, Nike’s head of apparel, as CEO, reporting to Blakely, as Spanx moved into everyday clothing and opened more of its own stores.

Selling Control

For 21 years, Spanx grew without outside investors. Then, on October 20, 2021, the investment firm Blackstone announced that funds it manages would buy a majority stake in SPANX, Inc., valuing the company at $1.2 billion. Blakely, described by CNBC at the time as the company’s founder and CEO, would keep a significant ownership stake and become executive chairwoman of a new all-female board of directors. Blackstone’s deal team, also all women, was led by Ann Chung. Forbes noted that the pandemic had hurt shapewear sales and that competition from newer brands had grown, though Blakely said she had always told people she would simply know when the time to sell was right.

In a video posted on Instagram after the announcement, Blakely told employees she was giving each of them two first-class plane tickets to anywhere in the world plus $10,000 to spend on the trip. The deal closed on November 18, 2021, and Oprah Winfrey, actress Reese Witherspoon, and Bumble founder Whitney Wolfe Herd joined as new investors.

Where Things Stand

After the sale, Blakely remained executive chairwoman and part owner of the company she had once run out of her apartment. In 2024, she launched Sneex, a footwear brand that aims to pair sneaker-like comfort with the look of a heel. By the time the Blackstone deal closed in late 2021, the company that once depended on one person to invent, sell, ship, and promote its product had a senior management team, majority outside owners, and a board of directors.