"Caught a whale" - When Shark Tank investor Kevin O'Leary rejected Luna Magic Tempt

Sisters Mabel and Shaira Frías presented their makeup brand Luna Magic on Shark Tank season 12 episode 10. The company sought $200,000 for 10% equity based on a $2 million valuation. Their pitch revealed $103,000 in revenue from direct sales, grants, and subscription boxes.

The sisters announced securing both end cap displays and a 50-store regional Walmart rollout. With $157,000 in cash reserves and zero debt, they requested help managing this retail expansion. Kevin O'Leary responded to their situation by stating:

"You need a logistics partner in a brutal way. You're like the classic you've gone out fishing on a little boat and you caught a whale. It's just dragging you right down to the bottom of the ocean and you're hanging on, trying to reel it in. It's saying 'I'm gonna eat these two girls when I get down here.' I'm really impressed but boy do you have a nightmare ahead. I'm out."

Barbara Corcoran later offered $250,000 as a line of credit for 30% equity which was accepted.

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Luna Magic got rejected by Kevin O'Leary over logistics concerns on Shark Tank

The Frías sisters brought substantial industry expertise to their venture in Shark Tank. Mabel previously worked as a digital strategist managing online beauty sales for Macy's and Nordstrom. Shaira completed professional training at the Academy of Freelance Makeup School and established herself as a makeup artist. Their brand focused on serving Latino beauty needs through colors reflecting their cultural heritage.

Their initial funding included a significant award from makeup giant Glossier's grant program. The sisters stood out among 30,000 applicants to secure one of just 16 available grants. This program specifically supported black-owned beauty businesses in their growth phase. The recognition bolstered their credibility in the beauty industry.

Luna Magic's retail opportunity with Walmart marked exceptional early success. The agreement covered product placement in 50% of U.S. Walmart locations. The sisters negotiated premium end cap positioning to maximize visibility. This retail commitment required substantial inventory investment and complex logistics coordination.

The company aimed to serve a proven market. Data showed that African American and Latina women spend over $35 billion annually on cosmetics. Luna Magic's product line included eye shadow, lipstick, brushes, and false eyelashes. Their pricing strategy aligned with established name-brand cosmetics.

O'Leary examined Luna Magic's readiness for mass retail distribution. He noted the stark contrast between their current revenue and the scale of their Walmart commitment.

Barbara Corcoran approached the investment differently. She structured a $250,000 line of credit against 30% equity ownership. This exceeded the sisters' initial request for $200,000. Her offer included direct assistance with logistics management for the Walmart rollout. After careful consideration, the Frías sisters accepted these modified terms.

Other Shark Tank investors explained their positions. Lori Greiner and Alex Rodriguez cited existing conflicts preventing their participation. This left Barbara's offer as the sole option for securing Shark assistance. The sisters recognized the value of Barbara's retail expertise alongside the financial support.

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Post-show results

Luna Magic's growth validated its retail strategy. By October 2023, the company reported $1.7 million in annual revenue, per Shark Tank Blog. They successfully executed their Walmart launch and expanded distribution.

The company maintained a strong market presence through multiple retail channels. Their products received positive customer feedback on Amazon's platform. The brand continued offering its signature items including eye shadow palettes, lipsticks, makeup brushes, and false eyelashes.

The Walmart partnership evolved from their initial agreement. The sisters managed the logistics demands that O'Leary had flagged as concerning. The company established reliable supply chains to support its widened distribution network.

Shark Tank investor Barbara's involvement helped address the early operational challenges. The line of credit provided flexible funding for inventory needs. This financial structure allowed Luna Magic to fulfill large retail orders while maintaining a healthy cash flow. The sisters retained control of daily operations while leveraging Barbara's strategic guidance.

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Fans can watch new episodes of Shark Tank on ABC network.