It wasn’t straightforward making an attempt to promote button-down shirts in the course of the pandemic when everybody was at house sporting sweatpants and T-shirts. Just ask the Untuckit founders.
“It’s not a secret that we struggled like everyone during the pandemic,” mentioned Chris Riccobono, who based Untuckit in 2011 together with his Columbia Business School classmate Aaron Sanandres to supply an informal shirt that might look good untucked. “We make a button-down shirt when everyone was buying athleisure. We had 86 stores — 35 that opened in 2019, two in England — and people weren’t going into the stores.”
It wasn’t fairly, however they did consider issues finally would get higher.
“It was a battle we always knew we would win because we had just come off the greatest January and February in 2020 that we’d ever had and were one of the fastest-growing men’s retail brands,” Riccobono continued. “But we knew no matter how good we were and how many people liked our shirts, we were going to be in survival mode because people weren’t going out.”
So earlier this month Untuckit closed on a $30 million senior secured time period mortgage with Second Avenue Capital Partners, a deal that the corporate mentioned will give it the “financial latitude to continue [its] pre-pandemic growth trajectory.” It additionally obtained $6 million beneath the federal government’s Paycheck Protection Program.
Sanandres, chief government officer, defined that the corporate’s present mortgage was coming due, in order that they began to discover refinancing choices. They settled on Second Avenue Capital, a Schottenstein affiliate that focuses on asset-based loans for the retail and shopper merchandise market. It was Second Avenue’s retail expertise that sealed the deal.
“A company like Second Avenue just happens to be a phenomenal partner for us on the financing side because they play heavily in retail,” Sanadres mentioned. “We definitely have great relationships with our existing lenders — it’s not like we took anyone out completely — we just introduced a new lender to refinance a chunk of our senior facility that we previously had with Pac West Bank.”
In 2017, Untuckit raised $30 million from Silicon Valley enterprise capital large Kleiner Perkins Caufield & Byers and it additionally counts Wayne Gretzky and Drew Brees as buyers, all of whom are nonetheless concerned, Sanandres mentioned.
Thanks to this respiratory room, “the future is very bright for the first time in a long time for Untuckit — and frankly, all retailers,” Sanandres mentioned. “Untuckit is a brand that does very well in the ‘dress for occasion’ space: so travel, dinners, work, happy hours, drinks, brunch — when people are living their lives, we’re most relevant. It isn’t when people are stuck at home in their basements.”
Riccobono mentioned that enterprise actually “turned a corner” beginning final month and males are beginning to purchase button-down shirts once more. In reality, retailer site visitors has picked up and gross sales figures are “getting close to pre-pandemic levels.” Shoppers usually are not balking at paying full-price and the corporate’s common unit retail is “the highest it’s ever been,” offering optimism for the longer term.
Adding to that optimism is that Untuckit’s assortment is primarily centered round a hybrid between gown and informal shirts, a class that’s rising as a key type choice for in the present day’s man. As Chris O’Connor, president of Second Avenue Partners, put it: “Workplaces in general have increasingly become more casual, and now post-pandemic we see that trend skyrocketing. Untuckit is well-positioned as the original go-to brand in this casual/dress dynamic and their meteoric growth will continue.”
Before the pandemic, button-down shirts had accounted for round 80 p.c of Untuckit’s gross sales, with efficiency polos, henleys, T-shirts and different product making up the rest. (Untuckit additionally presents sport coats, pants, shorts, sweaters, swimwear, socks and different equipment.) But in the course of the pandemic, these numbers shifted to 60-40, Sanandres mentioned, as customers sought more-casual choices.
“Now what we’re seeing, is in-store, that ratio is back to pre-pandemic levels,” Sanandres added. Online, button-down gross sales signify round 70 p.c of gross sales. “Once you get someone into a store, they behave in a pre-pandemic way,” he mentioned.
When Untuckit launched 10 years in the past, it was strictly a web based participant, however brick-and-mortar quickly started to take maintain. During the pandemic, e-commerce gross sales elevated to round 70 p.c of gross sales, however the aim going ahead is to attain a 60-40 on-line to retail ratio, they mentioned.
While the retail rollout in 2019 was intensive, the tempo will certainly sluggish within the subsequent couple of years. Although a unit in Sarasota, Fla., goes to open subsequent month, the plan is so as to add solely round two to 4 models this yr, a mixture of pop-ups and everlasting places, Sanandres mentioned, till it’s clear how procuring behaviors have modified on account of the pandemic.
Additionally, the worldwide rollout is on pause, at the very least for now. “We were going to expand through Europe, we’d had success in England, and there will be deals out there, but we’re not going to do it until this thing is well gone,” Riccobono mentioned.
One class that’s gaining in significance is girls’s put on, which Riccobono mentioned is “doing really well.”
Although it solely represents round 5 p.c of gross sales, Sanandres mentioned, or round $10 million to $20 million, “It’s one of our fastest-growing categories and we haven’t marketed it at all.”
Looking to the longer term, the founders mentioned the aim is to proceed to develop Untuckit’s attain with present clients whereas searching for new ones. “The most important thing for us is to get reconnected to our existing customers,” Sanandres mentioned. “We have a really healthy repeat purchase rate and during the pandemic we saw that repeat rate come down. So getting re-engaged with our customers is priority number one and to do that, you need newness and product expansion and more marketing of our non-core product. People tend to think of Untuckit as only button-down shirts. Getting that word out and getting our performance polos on people [will be key].”
As the pandemic continues to loosen its grip and individuals are keen to refresh their wardrobe, e-book airplane tickets and return to their workplaces, “we see a renewed optimism,” Sanandres mentioned. And with Father’s Day proper across the nook, they’re anticipating one other enhance in enterprise. “In 2019, we were the top-of-mind Christmas gift for a lot of people,” he mentioned. “2020 was tough, but we expect a really strong Father’s Day.”