Rags to Raches Kids Clothing Update | Shark Tank Season 7

Rachel Nilsson was selling her kid’s old clothes on Instagram to make some extra money, but it took too much time and effort. She noticed the outfits she made herself sold the fastest, so she started Rags to Raches, a line of stylish, one-piece rompers that are easy to put on and take off. The clothes are comfortable, and trendy, and make dressing kids simple. Will a shark help her grow the brand even more? Let’s jump into our Rags to Raches update and pitch recap to find out.

If you’re short on time, here’s a quick overview of what happened to Rags to Raches after Shark Tank.

Rachel entered Shark Tank Season 7 to pitch her kid’s pull-down rompers. She sought $200,000 for 10% equity. After her pitch, she bagged a deal with Robert Herjavec for $200,000 for 15% equity.

In terms of a Rags to Raches update, the company experienced a five-fold sales increase after its Shark Tank appearance, leading it to expand its team and partner with a fulfillment center. Subsequently, the company secured a $1.5 million venture investment in 2018, which enabled them to enter major retail spaces.

Shark	Result
Robert Herjavec	Accepted offer of $200,000 for 15% equity
Daymond John	$200,000 for 20% equity
Kevin O’Leary	$200,000 for 20% equity
Mark Cuban	No offer
Lori Greiner	No offer

 

Shark Tank Rags to Raches Pitch

• Entrepreneur: Rachel Nilsson
• Business: Kid’s pull-down rompers
• Ask: $200,000 for 10% equity
• Result: $200,000 for 15% equity
• Shark: Robert Herjavec

Rachel stepped into Shark Tank to introduce Rags to Raches, her children’s clothing brand.

She explained that she needed funds to increase inventory and fulfill orders from stores requesting more products.

To showcase her designs, Rachel brought her two children, Chloe and Harrison, to model different romper styles.

As the kids handed out samples, Rachel explained that the elastic neckline allowed children to slide the romper up and down easily.

Robert Herjavec then asked if that was the key feature that made them unique, to which Rachel confirmed it was.

From there, Kevin O’Leary shifted the conversation to product variety, asking how many styles she produced. Rachel revealed that she released limited-edition designs, which kept customers coming back for more.

To the sharks’ surprise, Rachel revealed that she had made $700,000 in sales over the past year. She confirmed that 90% of her revenue came from rompers.

Each romper was made for up to $10, and they sold for up to $50.

While 12% of sales came from boutique wholesale accounts, the majority of her sales happened online.

Moreover, she had intentionally avoided large wholesale deals because she didn’t want retailers controlling her pricing.

Mark Cuban pointed out that with such strong online sales, she must have a solid profit margin.

However, Rachel clarified that while the business made $280,000 in profit, it was lower than expected due to high inventory costs.

This led Robert to ask where the rest of the money was going. Rachel admitted that inventory was her biggest expense, which she needed to keep up with demand.

Both Kevin and Robert were skeptical about her interest in retail, especially since her online sales were already successful.

Mark agreed, warning that wholesale could negatively impact the business. Yet, Rachel still seemed interested in exploring retail, which led Mark to step out of the negotiations.

Despite this, Robert made an offer of $200,000 for 20% equity.

Almost immediately, Kevin matched the offer, arguing that his Something Wonderful platform could help her scale.

Meanwhile, Daymond John made the same offer but suggested a different approach—licensing the rompers to a big company. This way, Rachel could earn royalties while a larger brand handled mass production.

However, when Rachel asked if that meant knocking off her own brand, Daymond admitted it did. Lori Greiner agreed with Daymond’s plan and, as a result, decided not to make an offer.

With three identical offers on the table, Rachel asked Robert if he would consider 15% equity, and he asked if they would have a deal if he did.

They both agreed and sealed the deal. Let’s check our Rags to Raches update to find out how the company is doing now.

Shark Tank Rags to Raches Update

Our Rags to Raches update revealed that the deal with Robert Herjavec was never finalized, but the company did great after the show aired.

Sales increased by more than five times what they were before the show.

This prompted Rachel to expand her team and partner with a fulfillment company to manage orders efficiently.

As interest in the brand grew, over 100 retailers expressed a desire to carry Rags to Raches products

In 2018, she got a $1.5 million venture investment which helped propel the brand into retail. Further, she got into Nordstrom and made a deal with Disney.

The company also began offering adult clothing. At the time of this writing,  the company has an annual revenue of $4 million.

Rags to Raches products can also be purchased on the company’s website as well as on Amazon.

It will be interesting to see what our next Rags to Raches update will be.

Curious about the other products featured in Season 7 Episode 19? You can find our company updates here.

• Insta-Fire Update
• Custard Stand Food Products Update
• PRX Performance Update

Before you go, be sure to check out our list of all the Shark Tank Season 7 products.