Knix founder says sale of a majority stake in her women’s underwear company was vindication

For years, potential investors told Joanna Griffiths her idea wasn’t bankable because it was “too niche.”

So last year’s sale of the underwear and apparel brand she founded, Knix Wear Inc., to Swedish hygiene products giant Essity – a deal that valued the company at roughly $500-million – was public confirmation of what Ms. Griffiths had always believed: namely, that period-proof underwear and other products targeted to women’s needs could generate real value. As she looks back on 2022, she’s feeling vindicated.

“I would often get told that the market wasn’t going to be big enough or that it would make an interesting lifestyle business but ultimately wasn’t venture-backable or whatnot,” Ms. Griffiths says in an interview. “It’s language that I think a lot of female founders hear. Seeing this success is important, to recognize that sometimes you might not know how to size a market, not because the market is small but because you’re creating something entirely new.” She hopes that people in the venture-capital space are taking notice. “I think the message is: Check your bias at the door.”

It’s a message she’s been forced to send before. In the spring of 2021, Knix closed a $53-million funding round just two days before Ms. Griffiths gave birth to twins. During the process, the visibly pregnant founder faced questions about her dedication to the business, including from one potential investor who commented that “no one wants to be the last money in” before the babies arrive, and another who worried that she would “take the money and run.” Ms. Griffiths decided to push back by disqualifying investors from bidding if they raised her pregnancy as a concern.

Just three days after the funding round closed – the day after she gave birth – Essity came calling. “We were not looking to sell the company,” she says. “We certainly didn’t want to be a brand that just traded private equity partners. I really wanted to find a way to help ensure that Knix was around for the long run.”

Ultimately, she was drawn to Essity’s global scope and its other investments in leakproof apparel with brands such as Libresse and Bodyform. (Essity also acquired Australian-based Modibodi in the same week as the Knix deal.) And she was encouraged by its assurances that Knix could continue to run as a standalone company. The Knix team recently moved into their new 30,000-square-foot headquarters in Toronto, a step up – quite literally – from the basement where the company operated in its early days.

Ms. Griffiths still holds a 20-per-cent stake in Knix and continues to lead the company as president. “I’m nowhere near done,” she says. “I really wanted to continue to build.”

Knix has expanded quickly in recent years, from $50-million in sales in 2019 to $133.6-million in 2021. For the first nine months of 2022, sales totalled $126-million.

In a category that did not exist roughly a decade ago, it now competes with major brands such as Aerie, Hanes and Victoria’s Secret, which have all launched their own period panties. In early 2022, consumer products giant Kimberly-Clark Corp. acquired a majority stake in another leakproof brand, Thinx.

One major change that is happening under Essity’s ownership is the potential to take Knix global. The brand currently has its own e-commerce operations, as well as seven stores in the United States and Canada. But it has no wholesale business; in 2017, Ms. Griffiths made the choice to withdraw the brand from more than 700 locations – including Hudson’s Bay and MEC – to focus on direct-to-consumer sales. Knix recently hired an executive to oversee new deals with retailers, including plans to sell its products on Amazon.

The company also plans to continue opening a handful of stores each year, with a focus on Canada in 2023 and in other markets where e-commerce demand is high in the future.

Ms. Griffiths says she hopes the sale to Essity – and her continuing leadership of the brand – can serve as a message to others. “I think that this milestone undoubtedly demonstrates that it is possible to raise a family and run a business and do it well, which was the criticism that I was facing,” she says. “Because we need to see things to believe it. Hopefully this is something that can be used as a proof point that it is possible.”