Makeup Junkie Bags owner, Meredith Jurica, entered the Shark Tank in hopes of securing $200,000 for a 15% share in her company. The Makeup Junkie Bag is a multi-functional bag that lays flat to maximize storage capacity and can double as a clutch with a conveniently attached wrist strap. The Makeup Junkie Bag is currently being sold in 1,200 stores nationwide, however, Meredith feels that they are in need of a mentor and investor that can help them increase production for big box stores and increase their brand awareness.
— Shark Tank (@ABCSharkTank) January 21, 2019
Because the profit margins for the product are so high, sales for the Makeup Junkie Bag (and the line for men “Man Junk”) have reached $1.5 million over 18 months. The company is also debt free and 100% owned by Meredith. Makeup Junkie Bags are currently being manufactured in Houston, TX. Meredith tried to have them contract manufactured but was unhappy with the sourced quality. She used her profits from the initial sales to buy commercial equipment and hire seamstresses. They are now able to produce 6,000 units per month, however, they know they are are going to need to increase their production value to be able to keep up with big box demand.
The Sharks are very impressed with Meredith’s can-do attitude and the grit that she has shown to establish and grow her company. Lori Greiner shares that she would love to have someone like Meredith as a business partner. She offers Makeup Junkie Bag $200,000 as a loan in exchange for 5% of the company. She would also receive $1/bag in perpetuity. Lori feels that she is a good fit as an investor and mentor because she currently manufactures bags so she will be able to help with manufacturing and design resources. Lori also has contacts that could be very valuable for Meredith such as QVC. Meredith counters for a reduction in royalties on the bags from $1 per to $0.75 per bag and Lori agrees. Meredith accepts Lori’s offer after receiving additional offers from Kevin O’Leary ($200,000 for 3% of the company and $1.50 a bag until $750,000 is paid back) and Sara Blakely ($200,000 as a loan with no ownership and a royalty of $1 per bag until the loan is repaid). Meredith cited that the ultimate reason that she chose Lori’s offer was that Lori told her exactly how she would be present in their partnership which is exactly what she was looking for in a business partner.
I’ll give an ichiwawa karumba for $1.5 mil in 18 months!! So often we get entrepreneurs running in here with $0 sales and a CRAZY valuation. #MakeupJunkieBags is the real deal! @ABCSharkTank #sharktank
— Kevin O’Leary (@kevinolearytv) January 21, 2019
— Barbara Corcoran (@BarbaraCorcoran) January 21, 2019
What do you think of Lori’s investment in Makeup Bag Junkie? Would you purchase this product? Sound off in the comments below!
For a full summary of this episode, check out this article. Shark Tank airs on Sundays at 9:00 PM EST.