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Making It with Jon Davids
224 - "I Had No Idea How To Make a Shirt. Now We Sell $200M/yr." | Chris Riccobono, UNTUCKiT (replay)
00:44:39
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- [00:00]
A
What's up, guys? JD Here. And on today's show, I'm bringing you my conversation with Chris Riccobono, founder of Untuck It.
- [00:08]
B
I talked to Chris earlier this year.
- [00:10]
A
You loved my conversation with him back then. You're going to love it today. This guy took the concept of untucked shirts and built a company doing hundreds of millions of dollars in sales. That's coming up in just a sec. Get my best stuff to your inbox@johndavids.com and make sure to subscribe to the YouTube channel. You can, if you haven't already, ondavids. I'm going to be putting more and more time into the YouTube, taking these podcast episodes, making them visually beautiful. And some episodes will only make sense if you can see them. So make sure to get onto YouTube.com, subscribe to John Davids. And now my conversation with Chris Riccobono. You're listening to Making it with John Davidson.
- [00:59]
B
So, Chris, if you told me on day one this startup idea that you had, you're gonna create shirts that look good untucked, I would say that's kind of a crazy idea. And I'm not sure if people are really asking for this, but apparently I'd be very wrong because you definitely were onto something. Can you tell me what the insight was on day one?
- [01:19]
C
You gotta remember, it's been a long time now, especially after going through Covid. It's, gosh, it's been like 14 years. So today you're someone young. You'd probably say there is no problem because now every single brand has copied us. But back in 2011 or 10, I guess I was 20, I don't know, 7 years old. And since I had graduated college, every shirt that I wore was down to, you know, my mid thigh. Like, every single one. There was no attention to specs. You know, not only one would be down to the mid thigh, one would be down to your knees, one would be down, you know, pasture fly. They. I don't even think they measured length at the time. So I had one out of spec. J. Crew small shirt. I'm a large, and that one fit perfect in length. So I wore it every single day. But I also would ask every guy I was with, like, do you not have this problem? And they would all say, yes, they have the same problem. They have one or two shirts that out of spec in their closet they can wear untucked, and the rest are too long. It wasn't like seven out of 10 people. It was 10 out of 10 it was every single guy I would talk to now back then, because it was pre Covid, pre relaxation. You know, back then, the older guy always tucked his shirt in. That was just, you know, the way it was. So the older guys, they thought I was crazy when I was trying to raise money for my father's friends or like, what are you even talking about? So I did a survey, an official survey, went outside the PATH train in Hoboken, where there's tons of young guys coming out, and I held up two different questions. One was, do you have the problem? And it was 95% had the problem. And the other was, what's the right length? Which was right in the middle of the fly part, pockets partially exposed. So I knew there was a. I mean, listen, it's a crazy, crazy. I left. I was a healthcare sales representative, and I was going to start a shirter short company, but I was pretty confident. Every single guy I talked to had the issue.
- [03:02]
B
You stood outside Hoboken with a sign that said, is your shirt too long?
- [03:07]
C
Yeah, it wasn't. Wasn't that. But we had two or three people and we had cards made up of guys wearing the shirt at different lengths. And then we had the first question. Do you have a problem with your shirts being too long when you untuck them? And by the way, you'd be looking at them and their shirt would look sloppy. In the United States of America, not really overseas, you know, England and Italy, they've always kind of worn that more fitted, tailored shirt that fit nicer. Until we came around, just didn't exist.
- [03:35]
A
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- [04:14]
B
Listen, you're 100% right. I remember in the mid 2000s when I'd wear a shirt, I had, like, one shirt that I think I bought somewhere, and I was like, oh, this? Actually, after I put it in the dryer and shrink it, it kind of sort of fits at a good length. It's a bit baggy, but it'll do. And then when you guys came around, I Actually had that exact same thought. I thought, wait a minute. Everyone has this issue, and you sort of tapped into it when you had the idea, and then you put the signs up and you. And you, you know, figured out that other guys wanted this. What was the first thing you did? What was the MVP version of this?
- [04:44]
C
The other thing, by the way, a lot of guys who didn't know they had the issue realized they had the issue. So we would get tons of emails from wives who would be like, oh, my gosh, I can't believe my son, my husband, was wearing these shirts. I never knew that it looks so bad. So it was. For some guys, it was very obvious. For other guys, they had to see it before they realized how bad it looked. You know, once I realized that there's a problem, I had no idea to make a shirt. No fashion experience. Literally no idea what you even do. So I took the shirt, and luckily I lived in New Jersey, which is right outside the fashion district. I wandered up there, I went in, into these places that I saw sewing machines and told them I had this issue, could they make me a shirt? And then I realized how complex making a shirt is. And by the way, one of the reasons why everyone didn't do it, I used to say, why doesn't J. Crew do it? Why doesn't Brooks Brothers do it? It costs a lot of money to make a shirt that hits the right length every time. Because you need something. I don't want to bore. Bore you, but you need something called zero tolerance. Really? Because when you have a cotton grows, it's very hard. I mean, if cotton heats up, I mean, you know, you do this, you can stretch a shirt an inch. So you have to have 100% inspection of these shirts. They cannot come in out of spec. When I first worked with the factories and I measured my first shirt and I called the production guy, but he said, are you crazy? This is supposed to be 28.75. It's 30 inches. And they said, are you crazy? Like, we're allowed to go to 30 and 3/4. And they're like, most of them, there.
- [06:08]
B
Were actually no control mechanisms over the length and the width of the shirt. No one thought about it, because I guess since the beginning of time, guys have just tucked their shirts in. And that was the way I never.
- [06:19]
C
Really thought about it. And if you think about it now, you go around and everyone's wearing fitted stuff, right? That's just the way that's. Forget about the length. Everyone's wearing fitted stuff. Whether it's a suit, whether it's 15 years ago, everyone wore baggy stuff, big dress shirts. You know, the Michael Jordan prevented the suit, you know, out to here. And the. So once stuff became more fitted, specs became a lot more important. As far as the length goes, if our shirt was an inch too long, we look like every other shirt. If it was an inch too short, we couldn't. You couldn't wear it. So I told them. They're like, chris, you don't understand. We're cutting, you know, 5,000 shirts. The odds of us hitting that exact spec. This isn't wood, right? It's not a piece of wood. It's stuff that stretches and shrinks and moves. I said, well, I don't have a business, so we're going to have to do, you know, an incredible process to make this happen. We got to wash our fabrics, you know, wash and dry them twice, take all the shrinkage out and measure the art of fabric, inspect everyone, because I'm rejecting anything that's out of. I gave them. I gave them a quarter inch. I had to. You can't. You know, like I said, it's not. It moves. And they gave me a price. That. Which I didn't know at the time is, you know, five, six dollars more than, you know, what a competitor would make their shirts for. But I didn't have a choice. You know, that if the business was going to be in. So even today, all these guys who copied us, I buy 10 of their shirts, and they're all over the place length. So they're still not paying. We still have that advantage. It's really the consistency and fit.
- [07:38]
B
So there's something interesting, you said right at the beginning, the process of figuring it out, you realize going into it, there's actually a whole bunch of complications. There's a lot of reasons why all the other men's designers aren't doing it. And that caused a bunch of friction at the beginning. But I bet you that's turned into a big moat for you over time, because if it's so easy to figure out and actually just do, everybody would do it. The whole reason that this is a competitive business for you is because it is pretty hard to do, right?
- [08:04]
C
And you. And no one knows that. Like, when we used to talk to investors early on, you know, early on, I wasn't there. Oh, people are going to copy me now. In 19, every single brand in the United States of America copied us. They led their campaign, which was great, by the way. It was a great moment in the brand you know, as an entrepreneur, when Vineyard Vines, the biggest baggiest oversized shirt had a section in their store. You know, shirts meant to be worn untucked, but they still weren't doing it right because like we said, it just costs too much money if your business has to be built that way, to price the right way based on what it costs. So, you know, there's still. The other thing is, by the time they came in, anyone who sees a shirt untucked calls it an untuck it. You know, that's the whole tissue Kleenex thing or the Xerox. And it's actually even funnier. There's. There's golf clubs I get sent from some customer every day that their golf club says, you know, when eating dinner, you can wear, tuck your shirt in unless you are wearing an untuck it shirt. Like an actual. So it became a brand. And yes, it was not as easy to get into. Like, J. Crew used to have calls on this is going way back. That would be the untuck it call that they would just address what's going on with this company. And you couldn't just do it. It wasn't that easy because if the guy. If you're coming out of spec, you have a shirt that comes up to your belt. I didn't know any of this when I launched, but learned it kind of as I got into the industry.
- [09:23]
B
So you figure a bunch of this stuff out, you get past the hurdles. And what was the first mvp? So what was that first moment? Do you remember when you held that shirt in your hand and said, aha, I've done it.
- [09:36]
C
So we had no money to launch because we couldn't raise money on a shorter shirt. So we raised like $100,000. We did PR because that's all we could afford. We couldn't afford marketing. So we did pr, which with pr, you get your hit and then nothing happens. And you get your hit and nothing happens. So. So we were moving very slowly, but we were getting all these emails coming in saying, thank you. You saved my life. I can't believe this. I've been waiting for this. I wish I came up with the idea. All these positive emails that you don't typically get when you run a clothing brand. It was just excitement and. But we didn't have money to scale. Now, luckily, our first two years of shirts were horrific. Buttons fell off, they shrunk because I didn't know what I was doing. So. But luckily, we had not marketed really, so we hadn't been out there we had a great concept. We knew we had something. But the time came in at the end of 2014 or so, maybe we were doing 8, $900,000. We said, okay, we just got to go, we got to market. Let's run out of money. Who cares if we market and it doesn't work, then what are we going to do? Waste time, you know, dragging this thing out. So we went to a sports radio show in New York City called Boomer and Carton. They we talked to the marketing guy who gave us his pitch. He's like, you know, you need. This is going to take three to six months. You need a hundred grand. Because that's typically how marketing takes. You keep hitting them over the head. And. And we said, we have three weeks and we have 15 grand. That's it. So basically we have like three weeks of three live reads a week. I was in, I, I can remember being in LA in a hotel room and we did our first read. I heard it and all of a sudden now they, they, they not huge audiences. It's a New York City sports radio. There's like 1500 people to the site within, like now you're driving every. Your radio's in the car. No one advertises on radio. Who's in fashion? Because you gotta see the shirts. You know, we just did this read shirt. Have you ever had the problem where, you know, insert finally untuck it shirts. Not anymore. Untuck. 1500 people were to the site within like a minute. We're like this. That's crazy. Like, that doesn't happen usually. Even if you're driving, you're not running to a site. And we made four times our money. So we did it again and again. And then fast forward the next month we went airline magazines because it was 15k versus, you know, 40k to be in GQ magazine. 15k made 45. See the numbers going up. Then we went to the next thing and the next thing, you know, and that was our growth. You know, we went from 3 million to 15 million to 40 million, 80 million, 140 million and up from there. It was, it just. So that day when I marketed and I was like, oh my gosh, these people care about this. And it's working. Like, you know what I mean? Like, yeah, people care about it.
- [12:04]
B
And you sort of. I was going to say like, my, my. One of my questions here was like, how long did it take you to figure out Facebook ads? Because every E commerce company figures out Facebook ads and they take off. He figured out new York sports, radio and airline magazines. And that was your performance marketing.
- [12:19]
C
Well, think about this. So in 2011, I launched this company and I think I'm, you know, the 90th company launched or whatever. And now looking back, I realized there was only one company, two companies or three companies in our space at the time. It was Bonobos that launched. It was Warby Parker and I think Casper Mattresses. When we would go on Facebook, it cost nothing. And no one else was on there except us. And there might have been some other brands that not in my space. So I just launched a brand called Greatness Wins with Derek Jeter and I'm back in the world of Paid Social. I mean, it's impossible, right? I mean it's cost. Customer acquisition costs are through the roof. You go, if someone goes to Greatness, if I go to a brand out there now, if I go to Vori, the next day, I'll have 65 different, you know, brand athletic brands. Marketing back then it was almost easy and I think that helped. I joke around and I'm very honest to people. If I launched on Tuck It Today, even if there weren't shirts meant to be wear untucked, it would not have. It would have been much harder because of Paid Social. So what we did, we knew we didn't understand Paid Social. Why was. I was a healthcare sales rep. Our point was we have to market everywhere. That's what made it. I don't know if you remember this, but when, when I would go around everyone, you know, in 2018, 19, after we really clicked, people would be like, we see you every literally everywhere, right? Everywhere. We weren't a billion dollar brand with an unlimited market budget, but we would be on Howard Stern. We'd be in the airline magazine, we'd be in USA Today, New York Times, Wall Street Journal. No one did that. Like you said, you know, Gary Vanderchuk at the time, he was yelling and screaming that all that's gone. No one's going to make money. And we saw different we the more places you were. And as CAC went up on Paid Social, we were able to push money into these other areas and still succeed. While other people, when CAC went up, they pulled back and they disappeared. So that's very interesting.
- [14:05]
B
I love this stuff and I know the audience is going to love hearing because this is super tactical. So you're talking about the customer acquisition costs here. So you talked about doing radio and getting I think a 3 or a 4x return on advertising spend there. And then you're talking about airline magazines. Again, these are really unconventional. I mean, they're traditional channels, but they're unconventional to today's marketer. How long was it before you went to the kind of Facebook Google route? Or did you ever go there?
- [14:31]
C
No, we went there. You know, it's so funny. I remember these days, man. It's funny. I was. I'd walk to Dunkin Donuts every day and I'd say, if this doesn't make it, I'm. I'm done. Because I've burned every bridge at General Electric. And I used to think, how do I get to people? I had no understanding of any of this stuff. And I'd be sitting there and I'd be saying, what else do I do? Should I? And by the way, we would do. We would print cards out with a thing and go hand them out at the path like koozies and. And paid social. Back then it was. If you remember, it was very early on. You probably know exactly when it all started. In my mind, I'm a little bit vague, but if I'm correct, in 2011, it wasn't, you know, I don't even know if Instagram wasn't even there. So it's really Facebook. It was Facebook and I think some Twitter and then Twitter never really. So anyway, the point is, we should. We hire this firm. Oh, my gosh. The firm cost, you know, 10K and they're gonna. And they're gonna market us. And then. Then you gotta do your SEO. SEO was the big talk back then, right? SEO. And it was early on in. In the world of this whole E commerce thing, it was really early on. So. But I do remember saying, you know, okay, well, what do we spend? How do we do this? Should we be doing this or should we be going there now? People, anyone launching business now is gonna think I'm crazy. They don't even think about that stuff now. Now you go right to paid social, you go to Google, you go to, you know, and you do your TikTok and whatever else.
- [15:48]
B
But you should, though, because.
- [15:50]
C
Yeah, no, I'm sounding a little confusing trying to remember back then.
- [15:54]
B
It's all good. The arbitrage. So Facebook ads, you know, were invented in 2007, but they. 2011, it was still super early. There was not. It was not a known thing that if you're running a D2C brand, you need to be on Facebook in 2011. Like, no one did that. But the other thing here is, you know, finding alpha, finding that, that delta in the market where you can say, okay, everyone's doing this. I'm going to do that. I think even today it's a good lesson to have to. Yeah. Why not go to airline magazines? Why not do cable news? A, these channels need the money, so they're going to give you better rates most likely. But like you said, and I've done it also, I've run terrestrial radio ads for apps and I'll get 2,3000 downloads every time that 30 second spot runs. So it is a direct marketing channel. And like you said, you, you would see the revenue come in moments after the ad runs. That's better than Facebook because not everyone's.
- [16:48]
C
Doing it and you need to, you need to run it all together too. That's the we've noticed like what I learned. It's so funny because I'm doing it all over right at greatness win. So it's like I'm new is like if you just do paid social and you don't have your commercial running and you don't have your radio and you don't have. It doesn't feed the funnel like it just doesn't work now, now young entrepreneurs are going to be saying, well, I don't have the cash. And listen, I know what that feels like with my new business. But you don't want to put it all into Facebook or paid social because it just, it's too competitive. Like in Untuck it Now. My new world is. You find this funny, but our stores are incredibly efficient. You know, they're almost all profitable. We have eight, 90 of them. They're 12 to 1500 square feet. Most, most companies are closing stores right now. In my space, the all birds of the world. And the list goes on. We're opening another 80 now. Why am I opening 80? I'm opening 81. Because we love stores and the stickiness of the customer and, and we know how to run them. But the other reason I'm opening 80 is because it's a competitive advantage for me to acquire customers that other companies, you know, who are doing that 40 to 50 million and are starting to creep up. They can't do right. They don't. They're not gonna be able to open 80 stores. They're not gonna be able to do it that efficiently and profitably wise. So when I talk to my team, they're like 80 sounds like a lot do we need. I'm just thinking we need other avenues to bring in customers. If you talk to any, you talk to these guys all the time. Like me. The hardest thing in the World right now is acquiring customers through paid social. I mean that's, that's, you know, efficiently, it's become it. Now listen, there are the, there are the, these brands that always stick out, right, and have just like on Tuck it, did you know that have the ability to market and see immediate return on paid social, you know, with an incredible roas. But most of them it's a battle or it's up and down, it's figuring out, it's tweaking. And so yes, I think that. And by the way, the elephant in the room here is the influencer world that didn't exist with Untuck It Now. It's become the biggest thing. That's where people spend their money now. So now they spend it on paid social and they spend it on influencer marketing.
- [18:43]
B
My start in the world of Marketing in 2015 when I started my agency, Influicity, it was influencer marketing. That was the insight that these content creators were going to become the new channels. And now what we're doing a lot of the time is combining the content creators with the paid social. So it's like, hey, do paid social but use content creators. You'll amplify your reach. So there's lots of ways to do that. I think the other kind of caveat here is you're talking about running paid social in the context of selling like shirts, T shirts, clothing. I think paid social works really well when you're selling something that's actually pretty high ticket. It's very hard to acquire somebody when you've got $3, $4, $5. If you're running a Facebook campaign and you can spend $100 to acquire a customer, it's obviously a lot better. So you're also talking about a more competitive space.
- [19:32]
C
That's true. I think influencer market also is becoming, you know, just saturated. And it's like it's hit. It's such a hit or miss thing. And you can do everything right. You can pick. I mean, this is going on a different direction, but I'm amazed. I'll have an influencer. We'll pay an influencer who has a million followers and influencers 200,000 followers. The million dollar follower will get zero sales. Zero. And you're thinking that's not possible to get. I could say on my little account, I'll sell you something and then you'll get the guy with 200,000 who drives 60 sales immediately. That to me makes it my job even harder. Right, because these guys are making a lot of money now. I think it's going to have to change and go down because there's too many. You strike out too many times. There's got to be a way to figure out who really is an influencer versus somehow someone who acquired these. You know what I mean?
- [20:17]
B
Sure. Well, dude, yeah, that's what keeps us in business. I mean, just a high stat there. I might get the number wrong, but there's something like 1. 1.2 million people in the world call themselves influencers. And the reality is maybe they say that because they have a certain number of followers or because they post a certain amount of time. Like, we're getting to the point with the world of influencer marketing where follower count actually almost means nothing because you could have 2,000 followers on TikTok and you're putting out videos every day that reach a million people, but the guy who's got a million followers can barely hit 5,000 views on a video. So it's like, it's very, very hard to figure out that world. And yeah, I mean, a lot of brands get screwed there and a lot of influencers, unfortunately, are making money where they probably shouldn't be. But let's go back to this. So I love the journey so far. So what you're saying, just going back to the. You start running radio ads, you're finding these different outlets to reach new customers. What were the sort of big growth milestones along the way? Like, do you remember your first million dollar month? Your first $10 million in revenue? What did that look like?
- [21:19]
C
Yeah, I don't remember anymore, but I remember it being very important. Like, I mean, the first million dollar day was incredible. I mean, obviously the first, you know, at first of everything was a big deal. It happened very slow, then very fast. Like I said, we had a pretty good growth rate of, you know, 3 to 15 to 40 to 80. I can't remember the specific million dollar day. I mean, I know Black Friday and that whole period of time was incredible. I mean, we almost went out of business because our warehouse just wasn't capable of handling, you know, the volume that we did. But yeah, it was a, it was a crazy journey watching it grow. And also you keep going back to the funny thing about our brand. It's not like I invented some complex app. You'd always go back and say, gosh, it's a shorter shirt, you know, and you get the, you know, all that excite. Now we opened our first. What was cool was when we opened our first store in 2015 in Soho was a three month test. I was in there, and it did unbelievably well. And I worked every day there. Cause I wanted to meet people and hear about it. And people were hugging me. People were like, you know, it was. And a lot of those people just talk about the power of stores. Most of the people who came in were like, I've been meaning to buy since I saw you in the airline magazine or heard you on Howard Stern, but I just didn't do it. The store drove them to do it. So then we opened up five stores. We opened up 30 and 30 or something like that or, you know, some huge number of stores for the next few years.
- [22:39]
B
Yeah, I've heard that from Drew Green, who runs Indochino, that where they put a store in a city, where they put a store, they see online sales go up. It's not just in the store because they don't sell merchandise in the store. It's just a showroom. But stores really are a billboard for customers to move and actually buy a product. Do you see the same thing?
- [23:00]
C
Yeah. And that's why I love opening stores in like, New Mexico. Right. It costs nothing. The store does not do a lot of revenue. Might do a half a million dollars, but we acquire all the people. It's just another way. It's like a billboard. It's a way to get people in New Mexico aware that untuck it exists. And in the meantime, there's a store there. So I love. I love opening stores everywhere, like literally everywhere. There's no downside as long as the cost makes sense.
- [23:27]
B
Quick break so I can tell you about Influicity. That's the little marketing agent I started in my apartment about 10 years ago. Well, fast forward.
- [23:35]
A
It is not so little anymore.
- [23:37]
B
Influenicity works with some of the biggest brands in the world, building customer communities that drive revenue. We do this through influencers, podcasts, paid.
- [23:46]
A
Media, social media content, AI and so much more.
- [23:50]
B
You can learn more@influicity.com and hey, while you're there, check out our case studies. We have a lot of.
- [23:57]
A
That's influicity.com so when I talk to.
- [24:00]
B
People who are in the commercial real estate world, and we talk about, like, malls and shopping centers and everything's going online. And so that's a problem for commercial real estate. But then whenever I talk to the E commerce people, it's like, no, no, we need to open more physical stores. Do you see that as the future of, like, I'll walk through a mall and I'll Just see all the E commerce stores that are doing well because they need the physical stores to keep growing their business.
- [24:24]
C
Yeah, I just don't think a lot of these companies know how to run the store. That's just my. Like I've. Because I've read. Just read about a number. A lot of the companies are cutting back now. It's because you got to really do it efficiently. Most of these stores are losing money because they, you know, they go for a 2,000 square foot real estate space or 3,000. They over build out because you want your store to look beautiful. But I don't believe you have to have a store, you know, as a. Men don't care about that. They care about efficiency. So I think a lot of people can't master that. I'm involved in a few brands who have opened stores and they haven't, you know, worked early on. You have to open in the right location. Right. Like you can't settle, you can't open off of the beaten path. So I'm not sure of that because I talk about stores and I want 180 of them. A lot of brands, public companies, E Commerce companies are actually cutting back or opening a lot slower or opening now. The other thing about us is our, Our demo is 25 to 70 years old, evenly distributed. That's a massive demo. That's like the Polo back in the day where the grandfather, the father and the son wore the brand. So we can open up in any state, in any location. A lot of our competitors can open up in just the ritzy areas, you know what I mean? Or the east coast or the west coast. So that's also a benefit for our store expansion.
- [25:36]
B
It's funny, when I was thinking about talking to you today, what I kept coming back to and I wonder if you have this same thought is you're not untucked isn't really a fashion brand or you don't operate by the constraints of fashion. You're really a utilitarian product, almost like a knife or you know, something. Something that is actually much more basic because you don't even need to see the product to understand it. It's a shirt just like any other shirt you've seen. But it looks good untucked. Has that. Is that something that you realized at the beginning and do you realize it now?
- [26:08]
C
Yes, we are. Well, I don't know what I thought in the beginning. I think in the beginning I thought that we were actually a little bit more of a. In my mind, if someone is caring enough to Say my shirt's too long, then you must be at some level of fashion right where you are not just the guy. Like in other words, a guy puts a shirt on, doesn't think about it, he's not in the fashion. Another guy puts a shirt on, says, oh, shoot, this is a little long, I need a new shirt. But what I realized was it wasn't that it was every guy in America who just wanted to look a little bit better, a lot better, but without any effort. So the guys, that's what you see if you come in our store. First of all, the excitement you get from guys, No, J. Crew never excited me. And that's not a shot of J. Crew. Meaning I went to J. Crew to buy my clothes and I left. It was a clothing store. There's an attachment to untouched. Tuck it. Because I think these guys, I mean old. My, my dad's 83. He wears my shirts untucked now. He never wore a shirt untucked. And he looks 10 years younger. And every, every guy, you hear that, Every kid's father who wears them. So I went a little off plan there. But the point is, yes, we are not a fashion Ford brand. Now, that being said, you know, Matthew McConaughey, Leo DiCaprio, professional quarterbacks, they all wear our shirts. But you also have the taxi cab driver in Nebraska wearing our shirts. So we are not fashion forward, but our shirt is, is so well made and looks good that guys who are care about fashion do wear it. I don't know if that answers the question, but you're right. We're not looking to set trends. We're not looking to be the first in the, you know, we're looking to make something that if a guy needs it, like you said, oh, night, like he needs our shirt because he wears it to work. He wears it on his date, he wears it to vacation, and he wears it hanging out. So it's not just something he's wearing.
- [27:44]
B
In certain scenarios, what I would say, and I've used this analogy before, but like, you are a fashion brand in the same way a coffee shop is a restaurant. Like, yes, technically a coffee shop is a restaurant, but it doesn't operate in the same reality of restaurants if they just sell coffee because it's like it's one product, it's one sku. Their unit economics are way different. They can operate in a, you know, out of a shoebox sized place. And so, and so if you're going to operate a restaurant, which is a bad business, be a coffee shop. If you're going to operate a fashion brand, which is really a hard business. Be untuck it because you guys have so many advantages and that I'm sure other fashion brands, quote unquote, would be jealous of. Now you mentioned this. So you went from $3 million to $15 million revenue, $40 million in revenue, $80 million in revenue. And that was like a rocket ship. Is that, is that kind of what it felt like?
- [28:34]
C
Yeah, no, it did feel like that. I mean just. Yeah, it was just incredible growth. We actually raised money for the first time just to show the power of our marketing. We raised $100,000, 150 the next time we raised was in on our way to 80 million in 2016, the equivalent 140 was had raised. I think Bonobos had raised like $200 million and we had put 8 million on the books. That's pretty crazy stat because we did not need. If Covid never happened, that changed everything for I mean it changed our trajectory. But we were about to sell the business in 2020 with $8 million raised, which was pretty crazy. And that was all.
- [29:13]
B
Sorry, you had you raised secondary or you only raised primary capital?
- [29:17]
C
Yeah, we had no, we raised. It was a third. We took 20 million secondary and put 8 million on the books.
- [29:21]
B
But, but it sounds, it sounds like of profitable pretty early. Like you didn't need to raise money early on to kind of supercharge growth.
- [29:28]
C
You know, we weren't profitable, but we didn't lose. We lost very little. We took on some debt to fund the business because we had so much confidence in the return. We didn't want to dilute ourselves. But pre Covid, you were told not to be profitable by the guys who are going to buy you because they just wanted you to reinvest in growth. Luckily, we never were one of these companies who lost tons of money. We were always right on the border of profitability, but we hadn't turned it profitable until 2022.
- [29:53]
B
And what was Covid like for you?
- [29:56]
C
So told the story before, but we were about to sell the business for a lot of money, close to $800 million in 2020. I had 15 letter of intents coming out on February 27th. It was January. I forget when whenever that day was when we closed the process because of COVID Fast forward to April and I was on the phone in front of my house, right out here with bankruptcy attorneys, you know, trying to avoid declaring bankruptcy. It happened that that was a two and a half month difference. And the reason that was was because we had 90 stores. Fine, they closed. That's really not the bigger thing. The thing is people stopped buying and started buying Athleisure and only Athleisure and also it. We didn't have a lot of cash. Like that wasn't the way we ran our business. We didn't need to. We're going to sell the business. It was, you know, we operated on debt. When you go to take debt in April, during that you couldn't get it. So now we have no money. We have our debt. You know, we significantly dropped in 20. Now we did survive because we sold our non. We do about, we did about 80 million in 20 in non shirts. So we always. We do have a great business outside of our button downs which a lot of people don't know. But it's hard. You remember those days, I mean it was crazy. Every. No one was, you know, it was just, it was, it was unbelievable. So we fought through it because we knew we had a great brand post Covid we, everyone agreed with us. Our lender or everyone stuck with us and said we want to, we're behind you. We're the fastest growing men's brand out there. But we had to take on some significant debt deals. We took on those deals at a certain interest rate and that interest rate doubled, you know, in 22, 23. So we did have a lot of cash problems. We kind of went into hibernation mode. But we had a great, we had some great years because of our loyalty. Like we went, we were profitable in 22. We're profitable every year now going after 22. And we recently solved our cash problem and now we're back on a trajectory of significant growth with store openings. The other thing is we have no, we have no wholesale. There's no 200 million plus brands with no wholesale. That's low hanging fruit. We just started five months ago and we have, you know, nine new relationships and we're the best selling brand in most of them. So it's very exciting now. But it has been a crazy four years.
- [32:01]
B
Yeah, I was going to say the, the idea, like I've heard other apparel brands just describe it as hibernation mode. Just like, just make sure this business doesn't die. How long was it, how many months of that kind of agony was it?
- [32:14]
C
Well, it was two different things. That's what a lot of people don't talk about. It was Covid two years. We had to take on debt and inflation and interest rates went through the roof. So that combination made it a four year problem because we couldn't raise money in 23. So we started solving the problem in 24. You know, we had, like I said, we had our best year ever in 22. But the problem was we didn't have excess cash because we were paying out so much in interest to our debt. That's the problem. If Covid happened, but our debt didn't happen, we would have had no issues after Covid because we were profitable and we were growing. It was the fact that the interest rates, even though we were profitable, we were paying out so much in debt that you couldn't get out of it. Like you couldn't get excess cash. So we recently solved the problem in 24 from a cash perspective. So now we're, we're back and we never lost any of our customers. Our loyalty is incredible. It was just.
- [33:07]
B
We solved the problem just through growth.
- [33:09]
C
No, no, we, we raised money.
- [33:10]
B
Ah, okay, got it.
- [33:11]
C
We had to raise money to get out because the growth and the profitability wasn't covering the pay down of debt and the interest rates because we had some of our debt, you had to pay down other. So you'd have a great year and say, but we have less cash than we had last year. And they'd run through and say, okay, this is why. So that's why it was, it was a hamp. Like we were pulling back inventory, pulling down marketing just to make everything work. But right this second, it's as exciting as ever because we have, we just started our wholesale unbelievable start to it. And we're opening our an additional 10 stores this year, 15 next year. And we're starting to increase marketing. Our marketing has been down every single year for the past five years.
- [33:47]
B
Was there a point? Normally when I talk to people who have had these tremendous runs, there's revenue marks or maybe it's like employee count thresholds. There's different milestones they hit where they're hard to break through. Did you have any of those? I mean, it sounded like you smashed through the again. You know, you went, you kind of went from 0 to 80 million. Like a rocket ship. Was getting past 100 million hard. Was getting past 150 million hard.
- [34:12]
C
No, none of the, none of those. I don't, we don't share our exact revenue. But those two thresholds were not hard and we were trending way above that. We could tell our whole year. In the first two months we were that like you could just tell the amount we marketed versus so in 20, we were trending, you know, well north of that. Well, north of that. And then Covid took us back. But the funny thing is, and this is why we raised money pretty easily once we went out to raise money. This is not a brand. We are not a brand. A lot of people will think, oh, I haven't seen Untuck It. You know, I haven't heard about Untuck It. Oh, they must have reached a top, you know, a, you know, a plateau. There's none of that the excitement. We just know the excitement in the brand and the return on our spend and our, our metrics are as strong as ever. Very simple. We reduced marketing to such a small number that we weren't bringing in new customers because we weren't out there. But once we, once we went in and called these partners, these wholesale partners and they said, oh, you're the best men's brand we've ever launched. You know, you're our number one selling men's brand. We knew that was going to happen. We've finally proven it out. So now we have this potential, you know, 75 to 100 million dollar in wholesale that all of our competitors already have. Like they already have the whole wholesale. We don't have the wholesale. We also have our other products. Like we have a legit, let's say legit. It's not legit because. But it's multiple million dollar women's brand that we've never marketed once that no one knows we have. So when an influencer does it, we've seen incredible. It talks about on Tucket women's. We see an incredible return. We haven't done anything with that. So we're starting, we're going into Mexico City, we're doing a rev share. We're going to expand down in Latin America. We have licensing guys all over us. So I'm saying this, it's an interesting, it really is a Covid issue. It's just we pulled back and now we're going to, you know, we did open six stores last year because we didn't have to pay for them and we were able to do it while we had no cash and they were all profitable and successful. So those listening kind of, we think like we're going to really step on the gas.
- [36:07]
B
Are you back in acquisition mode like looking at your buyers as you were.
- [36:12]
C
Before COVID Yes, we are. We are looking to acquire customers. You're going to see us a lot more again on TV like we used to be.
- [36:18]
B
And No, I get that. I'm talking about you had Lois in front of you. Are you.
- [36:23]
C
Oh no, no, no, no, no. We're not there because we want to really explode here. We have the ability to. Between our store openings and our wholesale, I'd be leaving too much money on the table if we did it now.
- [36:35]
A
This episode is brought to you by my playbook social media selling machine, available right now@johndavids.com playbook. Let's be real. You don't want likes. You want sales. You want to know that customers are going to show up every day from the content you're already posting. This Playbook shows you how that's done, how to turn social posts into cash flow and how to scale in a way that's simple, repeatable, and on brand. Grab it free right now at johndavids.com playbook. That's johndavids.combookbook.
- [37:09]
B
I was going to say. It sounds like you were. You had mentioned earlier, I think you said the business would have been worth $800 million, but that was without the wholesale business. That was without the expansion. I mean, you might sell those things.
- [37:22]
C
And we weren't profitable. And, and because of that, Strategics wouldn't talk to us. Strategics wouldn't talk to us because they didn't. And they were right, by the way. They ended up being the right ones out of all this. But they, they wanted to make sure companies could turn profitable. A lot of these e comm businesses, I won't name them, but many know the names once they, they were just buying customers. So they were spending hundreds of millions on marketing, losing hundreds of millions and getting valuations of billions and billions of, of dollars. Once they said, oh, shoot, we got to become profitable, they lower marketing by 20 million and they would go like this, you know, because they weren't a brand. They were just a marketing machine. We've proven that we could lower marketing.
- [37:58]
B
I'll say it.
- [37:58]
C
Well, good. You said, you said it. I didn't say it. But we have a brand. When we lowered marketing by 60% in 22, we grew. We grew and became profitable. That's really exciting that, that's a big, you know, for any young entrepreneur. Once again, who's in that 15, 20, 30, $40 million brand. If you can't start the profit, pull back a little bit. You don't have to pull back 60%. We are forced into that and you can't still grow, then that's a problem because you're never going to be able to turn. So now that we're profitable and we're going to be significantly profitable over the next few years, all of when we go to sell, we'll have all the strategics there at the table with private equity. So I don't want to be overly confident, but I'm just very excited about it because this year will be the first year that we increase marketing spend, that we ramp up wholesale, that we open multiple stores and that we go have international expansion and begin this licensing conversation on some areas that we don't want to do ourselves. So it's a very exciting time, a.
- [38:51]
B
Ton of growth and you've earned it. You've come through hard times and now the brighter times are ahead. So I want to just ask you one last question because I think a lot of the early part of this story is going to be super relatable. And then a lot of the later part of the story, obviously a lot of people can't relate to having a $200 million revenue business. What would you say to someone that is kind of in the early stages, maybe doing their first couple million dollars online and e commerce? Like, is there anything that part of your story or something that you've learned that is critical in the early days that that got you past those early bumps?
- [39:25]
C
Well, I'm there right now with greatness wins. Like literally I'm there as we speak. Right.
- [39:30]
B
Greatest wins. And I didn't want to get.
- [39:33]
C
No, this is a great.
- [39:34]
B
Explain it to us.
- [39:35]
C
Greatness wins. An athletic brand. I started with Derek Jeter and Misty Copeland and it was the re. I was over Covid. I had some downtime, which by the way, I should have never done because in that period of time I had four kids under four kids under seven. Now you know, I'm doing too much. But I saw a peer. I saw the same type of thing. I saw a gap that there was no high end athletic brands. There was high end athleisure brands, there were athletic brands, but there was no high end athletic brand that fit like Athleisure but perform like athletic. We launched it. And my point is it's a battle that right now and it's a battle for every entrepreneur who's doing call it between 3 and $50 million because it's competitive. The cost to acquire customers is impossible. And so you have to. My advice is you just have to think outside the box. My outside the box was we went into greengrass golf accounts. Never was the plan, but we have enough between the Ontucket name and following and Derek Jeter, we were able to get some, you know, and now we're building this great golf business while I'm Building the athletic business while I'm building the dance side. But the story is kind of going back to Ontucket. You can't put all your eggs in this influencer paid social basket. It's just you're not going to be able to grow fast, profitable. You might be able to grow now. By the way, there are some people who are saying, you're wrong, Chris. We're doing it. And that's what I used to say with Ontucket. There. There are plenty of exceptions out there. The Voris of the world, although we always kind of did that through Covid. But you get my point. I think you just have to think of other ways to get to acquire customers outside of just paid social and Google and that, you know, TikTok. That's my advice because I'm doing it as we speak. And the thing that's keeping me alive longer so that I can grow the paid social is these other ways of marketing and getting out there.
- [41:11]
B
Channel strategy is so important and not just doing the same thing everyone else is doing and thinking that you're going to have some magical result. Because as you said, if everyone's already doing it, it's saturated, it's expensive, it's all that stuff. So you really have to think outside the box.
- [41:25]
C
You know, I have this thought. I just always think about this. It's like for 100 years or whatever, many years, there were 12 men's brands. They were in malls. That's what there were. There were 12 men's brands. You go to the mall, they're only, you know, now I'm making these numbers up. Now there are 300 men's brands that we probably could name. If you sat there with a pen and paper and you had your Instagram next to you, you would go, oh, yeah, I remember that one. And all of these brands are actually doing decent. When I say decent, they're selling. You have the group that sells $2 million and they're like, oh, my gosh, I'm going to make it. Then you have a lot of those 50s and you have a few hundreds and very few above that. And. But there's a lot of 50s when there shouldn't be. Like, so those. So my. My theory is that this is gonna. It might be a year, it might be 10 years, but it's gonna change. It can't last forever like this. You can't have that because all these brands are going to end up closing. Because the way it works, as you know, is if I'm doing well right now at 40 million, I'll make it up. But if I'm doing 40, millions of greatness wins, which I'm not. I don't want to. But if I was doing 40 million and I'm right on the verge of profitability, but I'm not profitable and I'm spending a good amount now, I have to become profitable because I'm running out of money or I'm in this circle. I got to go raise money. So I cut my marketing down. And once I cut my marketing down, the next guy steps in. So I. I'm. This is. I don't know why I'm talking about this. It's more about. In my mind, I'm like, it's just going to be very interesting to see what the next five to 10 years brings to us in the world of clothing. I'm going to talk about apparel now and men's, you know, men's or women's, because it's just too saturated now. It's hard. You know what I mean?
- [42:52]
A
Yeah.
- [42:52]
B
100%, probably a lot of consolidation, a lot of zombie companies that go under. Maybe a bunch of, you know, acquisitions of companies for pennies in the dollar because they just, like, they're in that really rough spot. But yeah, nothing like whatever expands is going to contract eventually. It has to.
- [43:09]
C
Yeah. It's just a crazy. I'm so attuned to it because of me. Because I'm on these things all day long, so I'm getting hit, and it's just staggering. The amount of athletic brands there are or shirt companies there are, you know, it's just crazy. I was just at the PGA show. I mean, there's like 190 brands, and they're all nice. They're all doing make nice. But it's like something's going to have to happen.
- [43:29]
B
Well, what's going to happen? What's going to happen is that you and I are going to be talking to the year and I'm going to say, hey, Chris, how many brands did you acquired? You're going to show me all the different Instagram brands that you acquired.
- [43:38]
C
That's funny. So, anyway, I enjoyed the conversation. Thanks. Thank you.
- [43:42]
B
Thanks so much for joining, man. This was awesome.
- [43:44]
A
Thanks for listening.
- [43:45]
B
If you enjoy this podcast, make sure to follow or subscribe wherever you listen to podcasts and leave a rating or review. That'll help other folks find the podcast.
- [43:54]
A
And it lets us know we're doing something right.
- [43:56]
B
We'll talk to you guys next time.
- [44:02]
A
This episode is brought to you by my Playbook website. Selling machine available right now@johndavids.com playbook. Most companies want websites that look nice, but a lot of nice looking websites don't sell. What you really want is a website that grabs attention, builds trust, and turns visitors into buyers while you sleep.
- [44:21]
B
That's what this Playbook gives you.
- [44:23]
A
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