Chris Riccobono has made a habit of listening to his gut.
The serial entrepreneur and co-founder of UNTUCKit admits that he knew nothing about fashion in 2011 when he started exploring the idea of manufacturing and selling shirts for men that could be worn untucked. Undaunted by the recession and the length of time it took to just make the samples (a full year), Riccobono likewise ignored the fashion cognoscenti’s opinion on his name for the brand. “[They] said it was terrible,” Riccobono recalled. But he was adamant about keeping the solution to what he saw was a huge problem in menswear in the name. “No question,” he told CO–. “It was the best decision I ever made.”
UNTUCKit’s offerings now include a full complement of men’s sweaters, trousers, swimsuits and outerwear, as well as a collection for women. Its customers range in age from millennials to octogenarians and include A-list executives such as Apple’s Tim Cook and billionaire investor Warren Buffett. Now Riccobono’s brand is taking another big leap, this time across the pond with two brick-and-mortar shops in London.
Doubling down on his vision for expanding UNTUCKit appears to be paying off for Riccobono and his co-founder/former Columbia Business School classmate Aaron Sanandres. In addition to a robust e-commerce business, UNTUCKit currently has 80 physical locations across the U.S. and Canada in a mix of malls, lifestyle developments and free-standing stores. In 2017, the company raised $30 million from venture capital firm Kleiner Perkins which reportedly valued the company at over $200 million.
Although he declined to divulge revenue figures, Riccobono maintained that the brand has always been profitable and has shown no signs of slowing down. “We’ve a four-year compounded annual growth rate of 150%,” he said.
British invasion: ‘We did a focus group and the response was great’
The move to open more stores in London was strategic and due to several factors, said Riccobono. First, he noted that UNTUCKit’s Canadian debut was a success, where other American brands (hello, Target) have endured costly failures. Then analysis of online sales revealed that England was the top generator of sales outside the U.S. “It’s not a large number,” said Riccobono of the U.K. e-commerce sales. But the proximity to the states and the fact that there’s no language barrier made it an easy leap. More importantly, said Riccobono, “We did a focus group and the response was great.”
We opened in some of the worst times here and we succeeded.
Chris Riccobono, co-founder, UNTUCKit
This isn’t the first time he’s been pleasantly surprised by how his brainchild has gained traction from his counterintuitive strategies. For instance, Riccobono recalled the first investment UNTUCKit made in advertising — on the radio. In 2013, “that was all we could afford,” he said. But each time, the radio spots brought at least 1,000 new customers to the site and the shirts sold out quickly.
Then UNTUCKit ran ads during Sunday night football when Riccobono admittedly thought the market for its shirts was tapped out. He was wrong. “Eleven thousand people in the first two minutes went to the site,” he mused. “Saturated,” he continued, “not even close.”
Another medium that many retailers abandoned long ago seems to be part of UNTUCKit’s secret sauce. When its printed catalogs land in customers’ mailboxes, the company sees a massive sales bump for two weeks from people shopping both online and in stores, Riccobono said.
Making sure it’s not lost in translation
That doesn’t mean it will be smooth sailing now that UNTUCKit launched a dedicated U.K. e-commerce site as well as opened two 1,600 square foot locations at Covent Garden and Westfield London. The brand’s custom fitting experience and in-store whiskey tastings stand in the shadow of Brexit. A report by U.K.-based Centre for Retail Research expects consumer spending (including retail) may rise by only 0.8% in 2020 due to the repercussions of Brexit, but analysts estimate that purchases will bounce back the following year.
Deloitte U.K.’s analysts offered similar predictions for the “beleaguered” retail sector. “Store closures, business failures and job losses have continued as online has continued to drive growth and competition in the sector,” according to the firm’s trend report.
Forrester vice president and principal analyst Sucharita Kodali has a cautiously optimistic outlook for UNTUCKit. “International expansion is always an easy way to growth if it’s done properly—stores, appropriately priced products, marketing, etc.,” she told CO–. Kodali also pointed out that many direct-to-consumer (DTC) brands seem to be “better versions of traditional mall merchants,” and are having a hand in the renaissance of shopping centers. “People like to try new things and DTC brands seem to be hot, so I’m sure they will get strong initial trial in the U.K.,” she said.
However, Kodali cautioned that fashion is competitive. “The challenge for UNTUCKit and everyone is that retailers need to retain customers to grow. For example, if price points are out of line,” she observed, “it won’t help retention.” UNTUCKit’s signature shirts run between $89 to $99 and Riccobono insists that its North American customer is buying multiples.
Although he expressed a little concern that the typical man in the U.K. tends to dress more formally than his U.S. counterpart, Riccobono says that recent trends indicate that there is growth in the casual market there. UNTUCKit’s prime differentiator, he said, is that “we are polished casual.”
And they aren’t spending a lot of money on the stores themselves. Riccobono said the goal was to make them efficient and comfortable, but you won’t find expensive fixtures or furnishings. Nor is the company planning to rapidly scale the number of physical stores. That’s what got legacy competitors like Gap and J. Crew in trouble, Riccobono said. UNTUCKit is continuing to eye further expansion perhaps in France and Mexico once it sees success in England, he said.
Right now, the focus is squarely on giving the customer what they want. So far that means offering sweaters that go with the shorter length of the shirts, as well as performance fabrics. “Outerwear’s really doing well,” he said. And women’s wear was added to give those who came to shop with and for the man in their life something to buy for themselves.
UNTUCKit’s story has had one constant: Riccobono’s refusal to believe conventional wisdom and strong business sense. “We opened in some of the worst times here and we succeeded,” he recalled of the brand’s start during the recession. “Malls have been dying and we have been succeeding,” Riccobono added. As for international expansion, he’s sanguine about duplicating that success abroad. “We will see if we are right.”
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Want to read more? Be sure to follow us on LinkedIn!
To stay on top of all the news impacting your small business, go here for all of our latest small business news and updates.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
Published December 09, 2019