Podcast Summary: Making It with Jon Davids – Episode 186: "We Made One Change And Now We're at $200M/yr" | Chris Riccobono, UNTUCKiT

Introduction

In Episode 186 of "Making It with Jon Davids," host Jon Davids engages in an insightful conversation with Chris Riccobono, the founder of Untuckit. The discussion delves into the remarkable journey of Untuckit, from its inception in a dorm room to achieving over $200 million in annual revenue. Chris shares the founding story, growth strategies, challenges faced, and the lessons learned along the way, offering valuable insights for aspiring entrepreneurs.

Founding Story and Initial Insight

Identifying the Problem

Chris Riccobono founded Untuckit based on a simple yet overlooked problem: men's shirts were often too long to be worn untucked, leading to an untidy appearance. Reflecting on his personal frustration and conversations with peers, Chris realized that "every single guy I would talk to had the same problem" (01:24).

Validating the Idea

To validate his insight, Chris conducted a hands-on survey outside the PATH train station in Hoboken, presenting different shirt lengths to young men. An overwhelming 95% confirmed that they experienced issues with shirt lengths when worn untucked (03:07). This reinforced his belief in the market need for a solution.

Chris Riccobono: "Every single guy I would talk to had the same problem." (01:24)

Developing the Minimum Viable Product (MVP)

Overcoming Technical Challenges

Without prior experience in fashion, Chris faced significant hurdles in creating shirts that consistently met the desired length specifications. He collaborated with local sewing factories in New Jersey, emphasizing zero tolerance for deviations in shirt length.

Chris Riccobono: "It costs a lot of money to make a shirt that hits the right length every time." (06:02)

Initial Product Flaws

The first two years were challenging, with issues like buttons falling off and shirts shrinking. However, the strong positive feedback from customers kept Chris motivated.

Growth Strategies and Marketing Innovations

Unconventional Marketing Channels

Instead of relying solely on typical e-commerce channels like Facebook Ads, Chris leveraged unconventional marketing strategies:

1. Radio Advertising:

   • Featured on a New York City sports radio show, Untuckit saw an immediate spike in website traffic, generating a 4x return on advertising spend (09:29).

2. Airline Magazines:

   • Invested in advertising through airline magazines, achieving significant revenue growth with a minimal investment compared to high-end magazines like GQ (11:55).

3. Press and PR:

   • Utilized PR to build brand awareness, despite limited initial funds for extensive marketing campaigns.

Chris Riccobono: "We buy 10 of their shirts, and they're all over the place length. They're still not paying. You know, we still have that advantage." (07:31)

Multi-Channel Approach

Chris emphasized the importance of a diversified marketing strategy, combining traditional channels like radio and magazines with newer platforms. This multi-channel approach allowed Untuckit to maintain a high return on investment even as competition increased.

Chris Riccobono: "You need to run it all together too. If you just do paid social and you don't have your commercial running, it just doesn't work." (16:41)

Scaling Up and Achieving Milestones

Rapid Revenue Growth

Untuckit experienced exponential growth, scaling from $3 million to over $200 million in revenue within a few years. Key milestones included:

• First Million Dollar Month: A significant achievement that validated their business model.
• Opening Physical Stores: Starting with a single store in Soho in 2015, which performed exceptionally well, leading to rapid expansion across various states.

Chris Riccobono: "We went from 3 million to 15 million to 40 million, 80 million, 140 million and up from there." (28:21)

Store as a Marketing Tool

Unlike many e-commerce brands moving away from physical stores, Untuckit embraced them as "billboards" to enhance brand visibility and customer engagement. Each store served as a touchpoint to attract and retain customers, contributing to overall sales growth.

Chris Riccobono: "The store drove them to do it. So then we opened up five stores, we opened up 30 and 30 or something like that." (22:52)

Navigating Challenges: The Impact of COVID-19

Pre-COVID Success and Setbacks

Before the pandemic, Untuckit was on track to sell the business for close to $800 million, with significant revenue growth and strategic acquisitions. However, COVID-19 drastically altered this trajectory.

Financial Struggles During the Pandemic

• Store Closures and Reduced Sales: With 90 stores forced to close and a shift in consumer preferences towards athleisure, Untuckit faced a substantial drop in revenue.
• Debt and Cash Flow Issues: The company operated on debt and struggled to secure additional funding during the pandemic, leading to severe cash flow problems.

Chris Riccobono: "We almost went out of business because our warehouse just wasn't capable of handling the volume that we did." (29:00)

Recovery and Resilience

Despite these challenges, Untuckit managed to survive by leveraging its loyal customer base and making strategic adjustments. By 2022, the company became profitable again, and in 2024, it resolved its cash flow issues by raising additional funds.

Chris Riccobono: "We recently solved the problem in '24 from a cash perspective. So now we're back on a trajectory of significant growth." (32:59)

Current Status and Future Plans

Expanding Wholesale and International Presence

Post-pandemic recovery saw Untuckit diversifying its revenue streams by entering the wholesale market and planning international expansion. The company now boasts nine new wholesale relationships and is the top-selling men's brand in several channels.

Chris Riccobono: "We have $75 to $100 million in wholesale that all of our competitors already have." (33:35)

Opening More Stores and Licensing

Untuckit continues to open new stores, aiming for a total of 80, leveraging their expertise in efficient store operations. Additionally, the company is exploring licensing opportunities to expand its brand without overextending its resources.

Chris Riccobono: "We're opening another 80 now. Why am I opening 80? ... We know how to run them." (37:10)

Diversification into Other Ventures

Chris is also investing in new ventures like Greatness Wins, an athletic brand, and expanding into other markets such as golf and dance apparel, demonstrating a commitment to continuous innovation and diversification.

Chris Riccobono: "Greatness Wins is an athletic brand... we're doing it as we speak." (38:38)

Lessons Learned and Advice for Entrepreneurs

Think Outside the Box

One of the key takeaways from Chris's journey is the importance of unconventional marketing strategies. Instead of following the crowd, finding unique channels can provide a competitive edge.

Chris Riccobono: "You just have to think outside the box... You can't put all your eggs in this influencer paid social basket." (38:38)

Diversify Marketing Channels

Relying solely on one marketing channel, especially paid social, can be risky in saturated markets. Diversifying ensures a broader reach and mitigates the risk of high customer acquisition costs.

Focus on Efficiency and Profitability

Maintaining efficiency in operations and striving for profitability, even during growth phases, ensures long-term sustainability and resilience against unforeseen challenges like economic downturns.

Build a Strong Brand

A robust brand that resonates with a wide demographic can drive customer loyalty and sustain the business through turbulent times. Untuckit's brand appeal across various age groups exemplifies this principle.

Conclusion

Chris Riccobono's story with Untuckit is a testament to identifying a niche problem, innovative marketing, and resilient business strategies. Despite facing significant challenges, including the COVID-19 pandemic, Untuckit has emerged stronger, expanding its market presence and diversifying its revenue streams. For entrepreneurs, Chris's journey underscores the importance of adaptability, diversified marketing, and maintaining a customer-centric focus to achieve sustained growth and success.

Notable Quotes:

• Chris Riccobono: "Every single guy I would talk to had the same problem." (01:24)
• Chris Riccobono: "It costs a lot of money to make a shirt that hits the right length every time." (06:02)
• Chris Riccobono: "We buy 10 of their shirts, and they're all over the place length. They're still not paying." (07:31)
• Chris Riccobono: "You need to run it all together too. If you just do paid social and you don't have your commercial running, it just doesn't work." (16:41)
• Chris Riccobono: "We went from 3 million to 15 million to 40 million, 80 million, 140 million and up from there." (28:21)
• Chris Riccobono: "We have $75 to $100 million in wholesale that all of our competitors already have." (33:35)
• Chris Riccobono: "You just have to think outside the box... You can't put all your eggs in this influencer paid social basket." (38:38)

This summary is crafted to provide a comprehensive overview of Episode 186 of "Making It with Jon Davids," featuring Chris Riccobono of Untuckit. It captures the essence of the conversation, highlighting key insights and lessons from Chris's entrepreneurial journey.