Is UNTUCKit the next big thing in apparel retailing?

Discussion
Source: 900 North Michigan Avenue Chicago store, UNTUCKit.com
Jun 06, 2017
George Anderson

UNTUCKit, a retailer that specializes in selling casual shirts to men that are designed to be worn untucked, announced it has received a $30 million investment from the venture capital firm, Kleiner Perkins Caufield & Byers.

The investment marks the first major round of fundraising for the retailer. UNTUCKit, which was founded as a pure-play e-tailer in 2011, began opening stores in 2015. The company currently operates eight locations in Austin, Chicago, Dallas, King of Prussia, Los Angeles, New York, San Francisco and St. Louis. It also plans to open a 1,300-square-foot store in the Mall of America next fall.

With the investment from Kleiner Perkins, UNTUCKit’s market value is now estimated to be around $200 million, according to unnamed sources who spoke to Reuters. The retailer plans to use the funds to open 15 new stores while expanding its women’s line and launching a line of children’s apparel.

The same report from Reuters quoted UNTUCKit co-founder and CEO Aaron Sanandres as saying the retailer always planned to move into physical stores because a large percentage of men “are uncomfortable shopping for a new brand digitally.”

“There is a renaissance happening in retail that favors brands who can directly connect with and understand their consumers,” said Mood Rowghani, general partner at Kleiner Perkins, in a statement announcing the firm’s investment. “UNTUCKit demonstrates a special synergy between online and offline that touches consumers in both their physical and digital worlds. This has profound benefits to merchandising, design, marketing, and customer happiness.”

DISCUSSION QUESTIONS: Does UNTUCKit offer a model for how apparel startups and other retailers will build their businesses in the future? Do you see the UNTUCKit business model as being scalable on a national, even international, scale?

Braintrust
"It's all about connecting, understanding and giving the consumer what they want."
"Established retailers are closing down stores because they aren’t meeting their target market’s needs. UNTUCKit is flipping that model..."
"Not sure how big a segment of the dressy shirt market untucked shirts can be, but these guys have done a great job of creating a brand..."

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19 Comments on "Is UNTUCKit the next big thing in apparel retailing?"

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Bob Phibbs
BrainTrust

Yes, there is no question that a pure-play e-tailer can open brick-and-mortar stores. The key is understanding the difference between online — product, and brick-and-mortar — customer experience. These startups have a leg-up on traditional retailers because they know exactly who their customer has been, what products sell well and which need additional help versus traditional retailers trying to figure out what will sell online.

Such startups can scale easily as well since they don’t have to or want to go to the mall picking up smaller stores vacated by the bloated retail footprint other retailers.

Gene Detroyer
BrainTrust

Perfect: “The key is understanding the difference between online — product, and brick-and-mortar — customer experience.”

Brandon Rael
BrainTrust

It’s a magical combination that these hybrid commerce brand have that legacy retailers struggle with. The obsession with the customer-first model, as it is at the heart of their entire operation, as well as their existence. This model is very scalable and it is without the significant inventory and real estate liabilities that traditional brick-and-mortar operations face.

Mark Ryski
BrainTrust

UNTUCKit has found a niche and it’s doing well to make the most of it. As long as market demand remains, there’s no obvious reason why they shouldn’t be able to scale this business. I do find it curious, however, to watch pure-play e-tailers make their first forays into brick-and-mortar. They seem to be far more cautious with how many stores they open and where they open them as opposed to traditional brick-and-mortar retailers who have traditionally been much more aggressive/optimistic in opening locations.

Chris Petersen, PhD.
BrainTrust

The future of retail success in an omnichannel world is all about this:

“UNTUCKit demonstrates a special synergy between online and offline that touches consumers in both their physical and digital worlds.”

Consumers no longer “see” channels … they want and respond to a seamless experience wherever and whenever they shop.

It’s not a question of whether stores will survive, but how they will be integrated as part of an ecosystem. Just ask Amazon why they are prototyping so many types of stores and ask Walmart why they are testing so many iterations of click-and-collect.

Anne Howe
BrainTrust

Do guys who would wear an untucked shirt really like shopping? I think UNTUCKit could encourage shoppers to sign up in stores or via pop-up retail for “the box at your door” — follow the Stitch Fix model and eventually phase back out of the unproductive physical stores.

Cate Trotter
BrainTrust

This is a model that we’re seeing quite a lot with e-commerce companies, and I think it’s working for many. Certainly I think we’ll see the model continuing. Not only do customers enjoy being able to shop across a multitude of channels seamlessly, but e-commerce companies are also realising that a physical store is a fantastic marketing opportunity. Having a store on a high street or in a shopping mall can help with brand awareness and help businesses scale by reaching new customers with experiences that online can’t manage (yet!).

Lee Kent
BrainTrust

“‘There is a renaissance happening in retail that favors brands who can directly connect with and understand their consumers,’ said Mood Rowghani,” (from the article above) and that, in my opinion, is the trick. Whether the brand begins their journey online or off. This brand was able to start online, which requires a different approach to marketing in order to identify their customer base and get the right products to them, and they were successful. The next step was to move into brick-and-mortar. Again, it’s all about connecting, understanding and giving the consumer what they want. Is that scalable? You bet!

For my 2 cents.

Brandon Rael
BrainTrust

The customer is king now and those hybrid e-commerce and physical brick-and-mortar showroom start up operations are responding to this transformation of the shopping expectations. The UNUTCKit model is following the emerging trend of personalized, curated and customized showroom-like experiences that provide an opportunity for the customers to enjoy a multi-sensory shopping journey powered by analytics and insights. This is absolutely a scalable model as long as it’s done strategically, thoughtfully and with the customer at the forefront of all strategies.

There are several other hybrid retail startups that are emerging and I expect this trend to continue to drive, change and evolve what we know the shopping experience to be.

Stefan Weitz
BrainTrust

It’s not a just a trend in apparel but in most startups that I work with. Start with one or two products to gain traction, build a loyal fanbase while gaining valuable product feedback (see how Allbirds have been very transparent about how they’ve improved their shoes), work on unit economics and supply chain and experiment with customer acquisition methods to establish your fully-burdened economic model. Staying agile early lets people fail without blowing the business.

It is smart that UNTUCKit is now getting into stores and it will be interesting to see how they use technology to support the seamless omnichannel experience that their customers expect.

Marge Laney
BrainTrust
4 months 11 days ago

This is a perfect example of “know thy customer.” With a good brick-and-mortar and online strategy they capture the new customers and keep them coming back.

Evidently, Mr. Sanandres understands how his target customer wants to engage with the brand and provides an in-store experience that is tailored to them.

Men don’t like to shop and they put up with a lot less inconvenience than women. But give them product that they like and a way to get it easily and they will be a customer forever.

Ian Percy
BrainTrust
I wasn’t going to respond here because for the life of me, I can’t figure out why I need to go to a specialty store in order to leave my shirt untucked. So to stay current with these advances in fashion, I did some research. The company clearly states that their problem is with the typical “dress shirt” as in shirt and tie which, for some long forgotten reason, doesn’t have an even hem at the bottom. Then the company says; “We did a TON of research to understand where people wanted the shirt to fall — the perfect length.” The emphasis is mine. Exactly how much advanced research has to go into determining the length of an untucked shirt? The Nobel-worthy conclusion: the right length is just above the pocket for easy access. You gotta love science! Of course, there is just nothing classier than a guy with an untucked shirt and his hands in his pockets! And I’m a little surprised at my BrainTrust colleagues who are turning this into a brilliant marketing strategy. Still, it is worth $200 million. The Pet Rock guy made a mere $15 million but that was without a ton of research. I’m… Read more »
Jonathan Lander
Guest

It’s a clever niche. But just that — a niche. One that is dependent on how long men will want to “untuck” their shirts. The real gamble is the acceptance of the women and kids’ lines. Right now the U.S. is way, way over-retailed, particularly in the apparel and footwear sectors. So the product must be 100 percent on point in terms of style, price point and quality.

Alex Senn
BrainTrust

It appears that UNTUCKit is not really doing much that is new, other than that their branding is quite good, they started online so they have data and their shirts are of a good quality. Other than that I feel the model in play here will ideally be something like Farfetch’s “store of the future” combined with Bonobos’ appointment-only showrooms. While I have yet to be in the store, this new wave of pure-play e-tailers needs to step up and have technology completely on their side. This is certainly a Millennial wave company and any Millennial not only expects a great in-store experience but an equally convenient online and mobile presence that can play into the store experience. This experience is something the company will need to tie all together in order to compete with Millennial-aged e-tailers. It will be interesting to watch how they spend that $30 million.

Peter Charness
BrainTrust

Not sure how big a segment of the dressy shirt market untucked shirts can be, but these guys have done a great job of creating a brand, and I suspect, exploiting the store as a showroom, pick-up location no doubt backed up by the ability to get a SKU not available at that moment in the store to a customer at home pretty quickly.

In terms of re-purposing the investment in bricks and mortar — something that other retailers would do well to exploit. The shopper wants to use the store as a showroom and have the option for delivery (or a repeat buy once I’ve tried it on and know I like it) through online and home options.

Larry Negrich
BrainTrust

The most interesting aspect of this story is this online retailer, UNTUCKit, was able to secure VC funding to open more stores. How bleeding edge! Perhaps we are in the throes of a retail renaissance.

Shep Hyken
BrainTrust

UNTUCKit is hot. Popular and trendy. Easily scalable … until it’s no longer trendy. Here is the key to companies like UNTUCKit. If they can start out right, they have the advantage of building a customer base quickly. The second step is to stay relevant. When wearing an untucked shirt is no longer popular and fashionable, what will be next. They need to be there to survive. Nice if they can be way ahead of the customer, but really they just have to be slightly ahead of the customer.

I like this company and they are smart. I think they know what we’re all sharing in our comments and are working to stay relevant and ahead of the curve.

Craig Sundstrom
Guest

Every retailer has two challenges: having a compelling product, and finding a way to sell it. With the rise of online selling, most of our discussions these days center around the second issue. But of course it’s really the first one you have to solve…well…first. And I’m not sure UTi does: maybe it’s (just) me, but I’m confused what makes a shirt “designed to be untucked,” and if others feel the same, and confusion leads to avoidance — rather than curiosity — then I don’t think it’s going to fly.

Min-Jee Hwang
BrainTrust

Pure-play retailers have a wealth of data that gives them intimate knowledge of their customers and target markets. Established retailers are closing down stores because they aren’t meeting their target market’s needs. UNTUCKit is flipping that model and only pouring resources into brick and mortar where and when they will be successful. Online retail presents a special advantage for startups because they can learn and test before they shell out their new funding. I see it as the way of the future.

wpDiscuz
Braintrust
"It's all about connecting, understanding and giving the consumer what they want."
"Established retailers are closing down stores because they aren’t meeting their target market’s needs. UNTUCKit is flipping that model..."
"Not sure how big a segment of the dressy shirt market untucked shirts can be, but these guys have done a great job of creating a brand..."

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