By Sarah Toy
Unsurprisingly, Align has said it will not be renewing its supply agreement with SmileDirectClub, which ends at the end of 2019.
SmileDirectClub is teaming up with Walgreens and CVS
In addition to its stand-alone SmileShops, SmileDirectClub has struck deals with CVS Health Corp. /zigman2/quotes/209664499/composite CVS -1.49% and Walgreens Boots Alliance Inc. /zigman2/quotes/203410933/composite WBA +2.65% allowing the teeth-straightening startup to open up to 1,500 SmileShops within CVS stores and any number of shops in Walgreens stores across the U.S.
SmileDirectClub currently has over 300 SmileShops across the U.S., Canada, Australia and the United Kingdom, and says it expects to open approximately 20 more each month for the remainder of 2019.
CEO David Katzman has dabbled in all sorts of businesses, from direct-to-consumer contact lenses to the Cleveland Cavaliers
David Katzman, the founder and managing partner of Camelot Venture Group, has been the CEO of SmileDirectClub since 2014, according to the company’s S-1. His private investment group backs mostly direct-to-consumer brands, such as online mortgage company Quicken Loans and 1-800 Contacts, and Katzman has served on the boards of Quicken Loans, diabetic supply company Simplex Healthcare, online promotions company ePrize and bedding company CleanRest. He’s also held the role of vice chairman of the NBA’s Cleveland Cavaliers.
Prior to founding Camelot in 1998, Katzman was president of Home Depot S.O.C., a division of Home Depot Inc. /zigman2/quotes/208081807/composite HD +1.36% that processes special orders for U.S. Home Depot stores.
Revenues are growing, but so are net losses as the company ramps up spend
SmileDirectClub booked sales of $423.2 million in 2018, a 190% increase from the year before. However, expenses grew as well, with marketing and selling expenses growing more than threefold to $213.1 million in 2018 from $64.2 million in 2017. General and administrative expenses also grew to $121.7 million from $48.2 million, contributing to a loss of $32.8 million and $74.8 million in 2017 and 2018.
The Renaissance IPO exchange-trade fund /zigman2/quotes/207665280/composite IPO +4.55% has gained 32.5% in 2019, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.48% has gained 20.2% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.07% has gained 16.8%.
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