After years of Covid-19-related challenges, DTC apparel brand Untuckit is bouncing back, clocking record sales and heading into 2023 as a profitable business.
Untuckit, which launched in 2011, had a tough road in 2020 as the pandemic upended demand for traditional office wear. The company was in the middle of an international expansion in the early spring when it moved to temporarily shut its nearly 90 brick-and-mortar locations. Still, Untuckit — whose hero product is a more form-fitting button-down shirt — stuck by its strategy as a business, deciding that “no massive overhaul of our brand ethos was necessary,” CEO Aaron Sanandres told Modern Retail in February 2021.
As the months went on, Untuckit concentrated on its online business, began offering curbside pickup, leaned into customer appointments and reopened stores. Now, it’s enjoying unparalleled growth. Several weeks ago, Untuckit had its best Black Friday and Cyber Monday in 11 years. Sunday and Monday of this week, Dec. 11 and 12, were also the company’s biggest days outside of Black Friday. After becoming profitable in early 2022, the company is set to have its most successful year, bypassing 2019’s $200 million in revenue.
“We’ve always thought we were the best post-pandemic product that you can ever make… because people wearing sweatshirts and joggers and tees, they don’t want to go back to their starched white tucked-in shirt,” Co-founder Chris Riccobono told Modern Retail. “They still have to look good in the office. So what do they do? They bought an Untuckit… I think we’ll be continue to be positioned for these next many years of casualization. So I think we’re in a great place.”
Riccobono spoke to Modern Retail about the company’s record-setting year, why it chooses to focus on brick-and-mortar retail and its plans for 2023. This interview has been edited for length and clarity.
You’re on track for your best year in revenue. What do you attribute that to?
Our growth was incredible. I think we were the fastest-growing men’s apparel brand through 2019… growing 50% a year. And then [Covid-19] hit. We took a big step back. And then we clawed some back in 2021. We would be way past where we are today if 2020 and 2021 didn’t hit, but there’s no reason to believe that we are not going to begin to achieve that same growth level in the future. And we’re starting to see that now. So we have really high hopes for next year and the year after.
We had just gone into England right before [the pandemic] started, like three, four months before. And we were planning on expanding all through Europe and all through South America. We’re going to pick up those plans. And our women’s business, we grew 100% in November year-over-year. It’s becoming a legit business. And we’re going to lean into that.
And more importantly, in the old days, we were 100% buttondowns and then 60% and now we’re 40%. Our pants business has just gone through the roof, our polos, our sweaters. I know everyone thinks about Untuckit as shirts designed to be worn untucked. We do massive business in shirts, but our customers buy everything from us.
Our AOV [average order value] is the highest level it’s ever been. So all the metrics look great as well… Our CAC [customer acquisition cost] has gone significantly down this year, which is making us fairly significantly profitable this year, from losing a lot of money in 2020 and 2021.
…We realized that profitability is by far the most important thing and we were able to do it very quickly. So now we’re growing fast, and we’re profitable. So it’s just the most exciting time that we’ve ever had at Untuckit.
You mentioned growing the women’s business and expanding internationally. What are your overall plans for growth for 2023?
We brought in so many new customers this year, which we hadn’t for a while because of [Covid-19]. I think we’re just going to see our natural growth there. And we are going to open more stores in 2023… We opened up 35 in 2019 and then we kind of stopped. We’re going to go back to that.
We do no wholesale. Any of our competitors, whether it’s Bonobos, Allbirds, Tommy John, they do a massive amount of wholesale. We do none… We’ll look at some wholesale, probably, in the future. We’ve kind of rejected it because we’ve been able to market ourselves and we wanted to own our customer data. But I think that wholesale is something that we’ll look at in 2023 and 2024 to continue to grow even bigger.
What is your strategy for building out that brick-and-mortar presence? What do you think about when deciding where to put certain stores?
We’re really in all the major areas. Now, we want to open up where we won’t cannibalize any sales. So we’re going to be looking into remote areas where we maybe don’t have a huge online presence, or we don’t have a store within a certain amount of miles… About 95% or more of our stores are profitable. So it’s not even the size that matters to how much revenue you’re doing. When we open a store, we’re profitable.
Some people might say, ‘You’re crazy, you’re opening more stores?’ It just brings us more profitability. We run them very lean. We have a great process. It’s very easy for the customers to shop… We love stores. When people asked us in the middle of [the pandemic] when we almost went bankrupt, ‘Do you regret having stores?’ — I don’t think you can scale a business without having stores to [reach] north of $200 million, $300 million. So we love them.
A lot of apparel companies this year struggled with having too much inventory on hand. Is that something that Untuckit has also been dealing with?
No, we’re in a great inventory position. We controlled our growth this year. When you have to place your orders, you’re placing them in 2021 for 2022. We wanted to be cautious because no one knew whether the turnaround was going to be this year or next year. I think we made a lot of great decisions, and that’s how we became profitable. So we’re in one of the best inventory positions we’ve ever been in. We have enough to continue to grow and overachieve our numbers, but we don’t have excess inventory.
What does your marketing strategy for next year look like?
We’ve always marketed more than others in different areas outside of digital… TV does incredibly well for us. Couple that with Google and Facebook, and that’s really our blend. And we do a lot of radio. And we have airline magazines still.
So it’s really just this great blend of marketing, which I think is important because what happens to a lot of companies is: Facebook becomes very challenging and very expensive, and they don’t have experience going in other areas. So when Facebook’s challenging for us, we just move that to TV. We go back and forth. That’s what’s helped us.