UNTUCKit: Chris Riccobono

24:43I'd say, I don't want it 30. I want it 28.75 inches. So the length, by the way, 28.75. That's my favorite number in the world. Well, that's on a medium from the, I shouldn't probably be telling people that, although I guess they can measure it. But 28.75. And then I was just working with these people. Some people told me they can't do it. Some people told me they could do it. Through each person, I met someone new and met someone new. It was really that type of story. So I just learned. It was like I was taking my time. I had a full-time job. There was no rush. And I was learning. It took two years to get to market.

25:21you know, to finally get that right shirt. But that, that, that was the hardest part is finding how to make the shirt. All right. So already in year one, I mean, you're kind of doing this R &D. Aaron is working at PricewaterhouseCoopers, but he's on board. He's like, I am in, I will, I want in. So what was he doing? He was helping you kind of craft the PowerPoints and build a business model? Yeah, he was building the, cause we had to raise some money. We had to build out a website. We had to start to think about how to market. So he was doing a lot of the financial side of things at the time. I was doing the shirts.

25:56But I'll tell you, things like Untuckit, that name, I came up with that and then agonized it over a year of all these people telling me not to use it. Shirts designed to be worn untucked, that took a year. You laugh at this, but you realize why some of this marketing stuff means something. You want to rush it, oh, it's shirts worn to be made untucked or whatever. That took a long time. So we were working on things like that. And then raising money was impossible. You know, you go to people and tell them you want to make, you're a medical sales rep and you're going to go make a shorter shirt, right?

26:28What are you talking about? How's that? No, it's not a good bet. It's not a good bet. Not at all. But before we get to the money side, just going back to you, what you and Aaron were doing, were both of you living in New York City at the time? I was living in, I had just moved to Hoboken and Aaron was living in New York City. So how often were you meeting? We meet at a diner, you know, two times a week in the city on Fifth Ave. And we just, listen, you never believed that this company, it was a shorter shirt. This wasn't technology. This wasn't, I started, I'm going to work on an Uber app, right?

27:05And I'm going to design it. This was, I'm making a shorter shirt and I'm going to try to break into the fashion industry. You never think it's possible.

27:16When we come back in just a moment, Chris and Aaron get a crash course in how not to make a shirt. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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30:35hey welcome back to how i built this i'm guy ross so it's 2011 and chris and his business partner have put together about 150 000 to start a new brand of shirts designed to be worn untucked and now chris has to get them made i connected to this guy from poland who had an office in new york City and he showed me a bunch of fabrics, looked at a hundred fabrics, said, these are the ones I like. He said, I'll make them for you in Poland. No process, you know, no, you know, now you do, you're supposed to do tech packs and big order forms and this and everything automated. I told the guy, I don't know, this is all I got.

31:19It's me and my partner. It was such a different times. So they were willing to do this. Today, there's thousands and thousands of people launching clothing brands every day because of the ease of doing it now, you know, with the ability to grow. So back then it wasn't. So that's a benefit. I always say I had, I was lucky at the time I did it. If I was five years later, it wouldn't have worked out. I don't think the way it did or 10 years. So this guy is a Polish guy in an office in New York and he had what he had his own factory in Poland or he had connections to the factory. He was the broker for that factory in Poland.

31:50Got it. And that was going to be cost effective to do in Poland at the time. Yeah, it wasn't going to be the cheapest. I just had no other contact, you know, in Asia. And the shirts were going to be made out of cotton, I'm assuming. Yeah, it was all cotton, basic stuff. How many shirts did you order in that first season? Only a thousand. And how much did it cost you? Probably 20 ,000, somewhere around that. And you were going to sell them for like 30 bucks or something? No, no, we were more than that. I think we were like 78. 888. Okay. So it was going to be a premium sort of premium shirt, right?

32:25Well, so we, we, the funny thing is we made terrible shirts in the first year. Like I, I never really got there until year four of making a really nice shirt. Cause I didn't know what I was doing. I didn't even know you had to pre-wash a fabric to take out shrinkage. No one told me some of the fabric, we didn't test the fabric. So the arms on our first plaid grew really big after washing and the rest of the shirt shrunk. Wait, hold on. So tell me about the, about that first batch of inventory? Because, I mean, you say that the shirts were terrible, which is shocking. I'm sure you sink all this cash into it.

32:58You don't have a lot. When it comes off the boat in New York, you open the boxes and what? You see right away that they're not good? Well, actually, when people started wearing them and saying that they now used it for a rag for their car, that's when it really... But you know what's funny? You know what's funny? I thought we thought through it and said, you know what? We'll one day get them back. We'll keep a list of those people, but we'll get our cash back. They'll buy the shirt. They're not going to return it, right? They're going to, and I'm going to lose X amount of customers. I mean, you didn't have a choice.

33:29This is entrepreneurialism. You just have to survive. You had to sell those shirts, even though they weren't perfect. You had to sell them. Yeah, that's the point. And today you wouldn't do that. I loaded my third bedroom up with all the shirts. I bought a UPS printer and we grew from there. I mean, we shipped, I shipped every night from my apartment. But we remained positive because when the guys got the shirts, the excitement, we get paragraph emails from customers who found out about the brand. Thank you so much. I've been looking for this. I can't believe I didn't do it myself. This has been a problem in the industry.

34:04No one writes paragraphs to clothing stores, you know, one after another. Every day, there'd be paragraph emails. By the way, it kept going. The next line that came out, we had, I got the first shirt. I am measuring it out. I see a little thing on the button. I pull the button up and it falls off. I look at the next button and the same thing. It pulls off. Next one pulls off. I take another shirt. The factory forgot to tie on the buttons the right way on this machine. The machine was broken on every single shirt they made. So we sold them. We followed up with an email to everyone that, hey, we're reimbursing your account$5.

34:40There was an issue with our machine. Take your shirt to the dry cleaner and get them put back on. By the way, these were all being made in that factory in Poland. They were all being made in a factory in Poland. And not to knock Poland, because Poland today, I think, would be prohibitively expensive. It's an industrial power, and it's got manufacturing, and it's an EU country. But my obvious question is, why would you keep working with that factory if the shirts they were making sucked? First of all, you didn't have a choice. Like, it's much harder than you think as a company making a thousand shirts or whatever the shirts we make.

35:17Like, they just don't even pick up your phone call for a thousand shirts. The other thing is it wasn't really there. I'm supposed to be submitting this tech pack that has washing instructions, fabric testing, testing buttons. I'm sure they were just, they had a thousand shirts, making no money on it, taking a chance. They're making the shirts and they're sending them over. I'm just trying to figure out why is this so complicated? I mean, I'm wearing, as you know, I'm wearing one of your shirts now. I wear lots of button-down shirts. What's so hard? Why is it so hard? There's a reason why I found out that people do not make shirts designed to be worn untucked.

35:53Our shirt has to be in spec every time. If it is an inch too short, you can't wear it. If it's an inch too long, everyone else has it. You have to hit it each time. Cotton grows. You can pull down most shirts an extra inch if you just give it a little tug. It shrinks. It moves. The heat affects it. All these different things. So we had to implement this crazy quality control process where we're washing each yard of fabric, where we're rejecting it if it doesn't hit spec. I rejected a shirt an inch out of spec the first time, and they said, that's not the way fashion works, Chris. They're not going to work with you.

36:25The factory will not work with you. And I said, then I don't have a business idea. When your name is Untucket, and you're talking about this perfect length, it has to be perfect. It has to be perfect. Okay, but I guess the reason why it's not perfect every time is because shirts are still, there's still a lot of human hands involved in each shirt, right? It's not a machine that's making every shirt. It's not like it's going on a factory line and it's just a machine that's just cranking it out. It depends now. There's some 3D technology and printing and stuff. But then you're saying it was still there were humans with, you know, sewing machines in their hands and they were doing the hems and they were stitching the stitches and everything.

37:05And that was. Right. Now think about this. Like if we're making 15 ,000 white medium shirts, which we do, they put them into a washing machine, a massive tank. Right. And they dry them and they wash them and they heat them. If one's too close to the heat and one's a little further or one's. That's the other problem. When you're scaling, it's very hard to make that same shirt at the same length every time. And you have two different people making it and all these different things. And your promise was, hey, it's going to look great as an untucked shirt. But if it was slightly off or it shrunk too much or, you know, or it, the whole thing gets thrown off balance.

37:47And there's no difference. And then we blend in with everyone else and the idea goes away and we disappear. here. Okay. So again, I go back to my question. If that factory in Poland sucked so much, why did you keep working? I guess the answer is you had no choice. It was the only, they were the only ones. Yeah, we had no choice and we quickly fixed our, I think that that's, and listen, this is now 14 years, but I do know we, so I don't have the exact timeline, but I do know we pivoted quickly and improved the shirts because they got really good in like, you know, this third year. How did you do that?

38:18How did, I mean, did you, were you flying to Poland to that factory? Did you basically at a certain point imagine you stopped working with them? I stopped working with them, but I also found this Swedish guy named Bjorn who's still with me today. Older guy, teaches at the Fashion Institute. How did you find him? I was working with a freelance guy who was not very good. Bjorn walks in for a meeting with him and he throws him the shirt and he says, what do you think of this shirt, Bjorn? And Bjorn destroyed the shirt, says the worst made shirt I've ever seen. And then he contacted me outside that meeting because he thought there was something there.

38:51Now, the good news is, the good news is, we grew unbelievably slow. You know,$90 ,000,$300 ,000,$500 ,000. This is year one, two, three. Yeah, then, you know,$3 ,015 ,000 and up from there. So that three to 15 was a big difference. But the great thing was, we always say this, if I started a company today on Tuckett, I would go raise 500 grand, right? You'd go out, you have your marketing plan, you market, you ship all your shirts. If they're bad, it's over, right? Now it paid social, social media, all these people. Back then, luckily, we had no money, we've had full-time jobs, and we weren't marketing.

39:35So we learned all this. Okay, your shirts suck. Okay, we lost 600 customers. Keep their names, though, because one day I'm gonna send you a letter and explain that I agree our shirts were terrible, and I want to send you a new one on us, which by the way, we did that. The only reason we survived is because those years we were so small. So we were able to perfect the shirt before we became known. That's what allowed us to go. And by the way, that was across. One of the reasons I think Aaron and I were successful is we did things completely different than they did in fashion. We didn't know what we were doing and we use that to our advantage.

40:11Like you launch spring. Everyone launches spring and on March 1st, but it's 30 degrees. Why do they launch spring on March 1st? I guess because they've been doing it for 100 years. You know, it's snowing out and they're showing past that. So we were very comfortable with we are not just following this blueprint of fashion, right? We're going to create our own way. And if it works, it works. And it's going to work because of that. And if it doesn't, it doesn't. You had no office, right? The office was your apartment in Hoboken. Is that right? Yep. And we did that for a long—we probably did that until 2015.

40:44We were very frugal. That was my plan. I didn't want to fall into the trap of many entrepreneurs of looking to get this big office, hiring all these people. Yeah. So you're doing half a million by year three and all online, all direct to consumer sales. Three years in, you're talking about 2013. So you didn't need to raise any more money at that point. You were still able to kind of take the just operate the business through cash flow. But I imagine as the demand increased, you had to order more stuff. So how are you handling the money? Were you getting loans? Were you – did you have a line of credit?

41:22We had a line of credit, a little bit – a small line of credit. But what happened in 2014 was we said we can't keep going like this. We'll be here forever, growing slow, and let's go market. We got to market. We had 21 grand to spend in marketing. and we called Boomer and Carton, New York radio show, the only one we could afford. They said you need - It's a sports show, right? It's a sports radio show. They said you need like three months and 100 grand to see results. And we said we have three weeks and 21 grand. So we did it. And I remember sitting in LA in a hotel room. First read comes out.

41:57I have my Google Analytics up. And within, now people are driving. They shouldn't be going to the site, but within 20 seconds, there's a thousand people on the site. Wow. and sales going up, sales going up. And they read the ad. Yeah. And were they like, hey, dude, do you ever have that problem where you like want to wear a shirt untucked, but it looks so stupid? And the other guy was like, yeah, I hate that. It's annoying. Well, now there's a, was it like that? Was it the ad? Exactly, back and forth. And it would end very strong. Shirts designed to be worn untucked, untucked.com. And people were like, must've been, what the heck is this?

42:28You know, because the people would just fly to the site. And then we booked airline and magazine, spent 15 made 45 and we could track this very closely because we weren't that big you spent fifteen thousand dollars on airline magazines yep okay let's just pause there for a sec because i actually think that's a brilliant idea and sadly they don't exist anymore most airlines don't don't produce magazines anymore but what airline was it was it it was everyone with the delta united southwest we were everywhere and the only competitors in that magazine at the time were watch companies and fragrance companies so when people saw us in there i think they thought oh my Like, gosh, this company must be taken off, which, by the way, that opinion from a consumer makes them convert when they feel that you're bigger than you are.

43:11And you're targeting guys like you, like sort of 20 to 50-year-old guys initially? When I launched the company, I thought we were going to be fashion forward 20 to 40, guys who are actually going to take the time and say, oh, I also have that problem. It ended up being our current demo today, and it's fluctuated over the years, but it's 25 to 70 years old, evenly distributed. So pretty much every type of guy, rich, poor, you know, taxi drivers, Leonardo DiCaprio, Matthew McConaughey, to athletes, to construction workers, security guards. That's been why we became who we were. Well, that's the thing.

43:48Like forever and ever, wearing a shirt untucked seemed sloppy. It was like, who does that, right? And there was a shift, right, that began around this time where you start to see people, you know, wearing untucked shirts or you saw a lot of people who were wearing blazers, jackets over untucked shirts that didn't look stupid. I know. I mean, I say this not arrogantly, but there's no question we played a role into the casualization of the United States. I mean, it's not, you could wear our shirt into LaBerna Dan in New York City, LaBerna Dan being one of the nicer restaurants. Michelin Three Star, yeah.

44:28One of the greatest restaurants in America, yeah. You could wear it with a sports jacket and no one is saying, I can't believe that guy's shirt's untucked, right? And that's what we started seeing. Guys were wearing our shirts everywhere and people weren't looking at them being sloppy. Fast forward today, now all these golf clubs across America in their guidelines say you can only wear an untucket shirt when you're in the clubhouse, if they allow shirts. So it started to become acceptable to wear our shirt to work, to wear our shirt to nice restaurants, weddings, whatever it may be. Okay, so you guys are growing steadily over the first three years.

45:06And then the real breakthrough is when you have some money to go on this, the Boomer Esiason show. And I imagine that you picked that show very specifically because it was guys, it was going to be guys listening to sports radio. And that's who you thought, hey, this is this is this is going to be our target audience. yes sports to this day has become one of our main areas whether it was the masters or sunday night football so we started there and by the way then we went to howard stern very soon after that how did you how did you afford that i mean that's a massive ad buy so keep in mind we raised about a million three call it right that's not exact but mostly from friends and family not professional investors?

45:49No, all friends and family and doing about 53 million. Now the equivalent, I'm not going to name brands, had raised about 200 million. The only reason we were able to do that is because if we, and the reason you say about Stern, we weren't even nervous. If we spent on Stern, it returned. If we spent on Sunday night football, it returned. It always returned. This is back then, by the way. Everything's obviously more challenging today. And was it just intuitive? Like, hey, I listen to those things. I like those things. Maybe your partner. Aaron listens to those things. And that was it? Or did you do like some research to find out, hey, where should we go?

46:25Back then we were big testers. Test it, move on. Test, move on. Podcasts became the next thing. Test it. We were in the Journal, the USA Today, New York Times. No one was doing that stuff. They were just doing paid social at that time because that's where the world was going. By the way, we had 30 billboards around the country at one point. No one was doing a billboard, but we had this tagline, untuck it, shirts designed to be worn untucked. That's all we had to put. We didn't even have to show the clothing. So it wasn't, you got to think about this. It was almost like it wasn't a clothing brand.

46:58It was a concept. Yeah. Let me ask you about the name. I think it works great. It tells you exactly what it is, what it does. You have to explain it. It's one word, untuck it. But there were people who were like, that's a stupid name. Like, give it a nut. Like, you have an Italian last name. Give it your last name. It'll sound Italian and kind of, you know, Italian fashion and premium. Yeah, we had most people hated the name. I came up with it walking out in front of my parents' shore house, and I had not launched the brand or even started it. And I said, that is why I'm doing it. Because I came up with that name, I'm going forward with this because I love it.

47:41Untuck it. Like, untuck it is the reason we took off. I really believe that. And by the way, the reason it wasn't sophisticated, that's what people would say. And they're going to think that the product isn't great. Right, that it's light. Right. And that is the reason I said we've got to make the greatest shirt you've ever worn. It's got to be perfect. You got it because when you open that box, your mindset is going to be this isn't a super high quality product because it's a gimmick. Right. That's what that was my fear. So I needed you right away to say, wow, this is an amazing shirt. and it washes well and it holds up because of the name.

48:15That was the negative of the name. The positive of the name is now if anyone's wearing an untucked shirt, people call it an untucked, period. It's like a Kleenex and a tissue and a Xerox machine. And that's a great moment as a brand. And by the way, it annoyed so many people in fashion, which is... Right. No, I get why they'd be annoyed because you're not cool, not part of that crowd, right? And there's a snobby kind of elite factor there. Like they're not going to invite you to fashion to the fashion week runways necessarily. And they intentionally didn't all those years. Like GQ wouldn't write about us and stuff like that because they were annoyed that, you know, a non-fashion guy came up with this name that's, you know, not fashion-y and, you know, people liked it.

48:58So that really the kind of the turning point really was starting to do these ads and then Stern and then airline magazines. And I mean, with just a million dollars raised, you're five years in and you're still working for GE, I think, at that point. Right. You still are actually on the clock with them. And also, how are you just coping personally? I mean, running a startup is a full time plus job. It can be 100 hours a week. and you were still, even when you hit three, four million dollars in sales, you were still nervous. You still mitigated the risk and held onto your job because you're still worried that this could all unravel.

49:44Oh my gosh. It was so hard giving up that job. I had a car. I had a job, you know, like you had your parents, you know, say your wife, you know, you're going to leave. Like, I was scared to say, okay, I officially don't have a job. I am now an untucket employee. the worst part was my it got bad at GE where it would bother me it started bothering me that I'd say most people didn't like me now by the way they didn't like me not because I was a bad guy they didn't like me because I wasn't doing the I wasn't going the extra yard doing a quote right I was leaning on people I was I wouldn't go to the meeting because I was now like you said I mean I'm I have a business now that by the way is not doing a lot it was doing I could think exactly during that period of time let's say was doing 7 million 6 million and I was like but there's a chance here So, I left in 2015, and I was flying to our sales meeting, which I did not have time for because Untucked was now really taking that next level.

50:37And in the magazine was a big picture of me, shirts designed to be worn untucked, founded by Chris Riccobono. And when I got there, I guess all the people saw it on the way to Phoenix to the sales meeting. They were on the plane. They saw you in the airline magazine, your face. Yeah. And my boss came up to me. I had a good relationship with him. not the people above him. And he said, I think it's time, Chris. It's going to be a tough one to explain. That was very scary to me. And I waited till I got pushed out. Like it was, you're forcing me out of here. And it got to the point, I never forget, I was walking to Dunkin' Donuts like I do every morning and it hit me really hard.

51:15I said, this business has to succeed now. I'm 30 years, if this doesn't succeed, I'm married and I'm like, I have nothing. When we come back in just a moment, Untuckit grows to the point where it's about to be sold for a huge pile of money until all of its suitors pack up and go home. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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54:02Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2015, 2016, a time when two really important things happen for Chris. The first is he walks away from his GE job for good. And the second is Untuck It opens its first brick and mortar store in Soho in New York City. I worked every day on the floor and I saw this reaction to people that this was something special, this brand. And I was able to pay myself a small salary and I felt really good. Now, you know, it's funny. I actually thought, OK, if this doesn't work out, I think I could go get a job in fashion at least. I could maybe go get a job as a.

54:44Yeah. Yeah. That was the big thing that I could fall back and now become, you know, an operator in fashion of some sort. Because you now understood the language. You could speak the language. You understood how the industry worked a lot better. I mean, now you're probably almost as much of an expert on shirts and apparel than you were on wine. Right. But I also felt pretty confident at the time. That store did so well in Soho that one year in three months that I said, we are now going to open this. That's another X million dollars in revenue. We're going to open five more. And then we opened 90 stores in, I think, two and a half years.

55:19Wow. But I'm curious, in 2015, 2016, most brands are starting to move online, right? So why did you guys decide to open up physical stores? The reason I went into brick and mortar was because people always say, why did we do it back then? Even though all these people were yelling and screaming about it going away, I had 70 % of my emails where I'm not buying you until I touch and feel your product. Part of that was because of our older demo, but we had to do it. If we wanted to be around and exist, we had to open a store. That's when I started hiring more people. But who was doing all of your before that?

55:56Who was doing the website and who was designing, who was dealing with like fulfillment, for example? Who was doing that? I had one guy shipping in the storage unit and I would go there an hour at the end of the day. It's funny. I was ironing through 15. I ironed every shirt. I would come home. The worst part of this whole journey for me, the entire Untucked journey was coming home after being out to dinner and seeing 75 boxes in front of my apartment door and having to iron them and repack them. Right up to the middle of the night, iron, clip them, hang them outside. But we were very lean. Me and Aaron did almost everything until Bjorn.

56:37And then on the way to$15 million, we quickly hired. That's where it turned on quick. Wow. Let's step back because you officially launched a store in Soho. It's doing great. And I think the next year, finally, Aaron, your co-founder or partner, you bring him on to be the full-time CEO. I'm assuming you're just like, I'm done. I don't want to be doing the CEO job. I want to move to another role, focusing more on maybe like product and creative and other things. To be honest with you, I recognize that he had a better history to be a CEO, you know, as a partner at PwC. That would give him a lot more credibility when we were going to have to eventually do a big fundraise or sell the business.

57:23I wanted him sitting there as a CEO. But I wanted, I thought that was, and I think it ended up being a great decision. It just made sense to the business. And you probably didn't have any management training, right? I mean, management is a skill that is developed through training, largely. It's very rare when someone's just a natural manager. I agree, and I am not. You know, I kind of, if you think about it, one of the reasons I left corporate America was to be alone. That's going to sound weird, was to be alone working hard, right? I told you I didn't like, feel comfortable in those PowerPoint presentations, in those cocktail hours, in those smoothies.

57:59Like, I just like to be working, you know. So it was never my – it's funny. Like Aaron does most of the talking in those scenarios because he's just better at it. He kind of went through that pathway to his career. Let me talk about ads and marketing for a moment because one of your ads is a – it's an ad of you walking through Soho. And it's very serious. And, of course, you're wearing an untucked shirt. And you're saying, I had a problem. And then I solved the problem. And I don't think I need to tell you, I think it's a good ad. I mean, you're an entrepreneur. You're talking about this idea you had.

58:37But there's something about the ad that's polarizing, which I actually don't think is a bad thing because it got more attention than it probably would have gotten if it wasn't polarizing. Like it was a YouTube ad. I mean, this ad has been parodied on Colbert. It was in – so I have Letterman and Seinfeld. Seinfeld, you know, saying I just hate that Untuckit guy. walking down the street all smug. Then Letterman's first appearance back after not having been on, after leaving, his first line, where have you been, Dave? What have you been doing? I've been looking to find a shirt that looked good untucked.

59:15Then you have Kimmel, Colbert, Jim Gaffigan has an entire thing in his skit, a very funny thing about the untucked shirt. All of that, that is amazing, that stuff. It helps you. You're right. Everyone would pick their head up. Everyone would pick their head up and say, what is this lunatic talking about? Why does he care so much about his shirt? All right. It's 2017. Up until that point, you could not actually get any professional VC money. And this is a time I should mention, on this show, we've done Stitch Fix, we've done Bonobos, we've done many of the brands that you've mentioned, but also just apparel brands too that did, were able to attract money from outside investors.

1:00:00Tell me a little bit about before 2017 trying to, I mean, how hard did you try to get money from venture capital firms? We were able to grow without raising money, which was very odd. So we were trying to avoid it at all costs. I see. You know, I look back, I don't know how it was possible that we opened up 30, 25 stores without having raised money from that initial fundraise. It really was just refunding the business. And we took some debt. We did take some debt. Yeah. Our first big fundraise, we went out in 2016 to venture growth funds. And Kleiner Perkins, they do not invest in Untucket-type companies.

1:00:45I mean, they invest in Uber, you know, billion, billion dollar tech companies, right? That's what, and they were looking at us more like a marketing tech company than an apparel company. And they, I'll never forget, they said the reason they invested is that they thought we'd be the next great American brand. I just never forget that. We raised$8 million from them. That's all we put on to bring us to our, what would have been our sale in 2020. 20, we would have had$8 million raised,$9 million lifetime. So I thought that was pretty cool. So Kleiner Perkins put in, you said$8 million? Yeah, they put in more, but it was secondary, went to shareholders.

1:01:25But in 2017, I think you raised a total of$30 million. Is that right? Yeah, from Kleiner. Eight went on the books. I see. Okay. So essentially, you were able to take some money off the table for the first time. Yeah. So you had worked up until that point, but you presumably wanted some security at that point because you had been grinding and always nervous about whether this was going to go under. And finally, you could take some cash off the table and put it away for a rainy day in case it all went haywire. So that must have been pretty great to be able to do that. It was a deep sigh of relief.

1:02:02I mean, it was one of those moments that you don't forget. And it was more not because of the money. It was more of the achievement. Wow, this really happened. I got something out of this. I got something. I started this silly idea and I was able to monetize it and say that it worked. All right. And now they were a minority investor, minority owner. Yep. All right. By the time, you know, Kleiner Perkins is putting money into the brand and you're hitting, you know, 50 million a year and you're starting to really build out stores, you know, the other established apparel brands, especially men's apparel brands, clearly have noticed you.

1:02:39In the first couple of years, they had no idea who you were, didn't care. Now you're starting to see, you know, the Brooks Brothers of the world and the Vineyard Vines and some other brands start to make untucked dress shirts. It's funny. A lot of times people ask me what's been the greatest moment that kind of sticks out for you. And it was the day which you think it would have been a depressing day. But the day that it clicked that every single competitor, Vineyard Vines, J.Crew, Banana Republic, just go on. Everyone led their 2019 spring campaign with shirts meant to be worn on tuck. Now, two of them led with two of the big ones led with shirts designed to be worn on tuck.

1:03:19And we had to make them remove that. But everyone, I mean, Vineyard Vines set up a section in their store. They're known to be tucked in shirts more than any brand you've ever had, right? Like shirts that are preppy and tucked in. They had a untucked section in their store. It was kind of a feeling of accomplishment that I started this kind of little idea out of Hoboken. And now the whole fashion world, the billion-dollar brands that have been around forever are now changing their strategy because of us. And I think it's your even more attention to the untucked shirt. And what more do you want when your name's untucked?

1:03:55Right. So it ended up propelling us in 19, you know, to having, you know, our best year we had ever had by a long shot. At this point, you guys are going beyond shirts. I mean, you're doing you're starting to get into other parts of the apparel world. Right. And today, of course, you do sport coats and trousers and, you know, all kinds of things. and you've got clothing for women. But by any account, you're a really successful, growing player here. And you're on par at this time, or maybe even more so with the Bonobos and the Stitch Fixes and these big brands that are really kind of emerging in apparel.

1:04:42And there is talk about an acquisition, right? This is about what, 2019? you start to talk about maybe late 2019 2019 okay and tell me the story about the acquisition who was the acquirer what's the story how does it start so we just decided in late 2019 we were growing so fast and we had so much growth ahead of us we went into uh england we had been doing very well in canada we had expansion plans across europe and we had a growing women's brand with zero marketing we had a growing pants brand with zero marketing all these amazing things and we just decided to go test the waters and we had 15 letter of intense coming in you know at a very very big number you decided to test the waters just because you this was a good opportunity time you felt like okay and i should mention the first couple years you were profitable but you were small now that you're growing and you're investing in growth you are no longer profitable which is normal but now you felt like okay this is maybe an opportunity to get acquired by a bigger brand, you know, one of these big conglomerates or something, because now then they can take it to the next level.

1:05:50Yeah. And there's two things that I've always wanted with this. I wanted one, to make good money. And two, I wanted this to be a brand that way outlives me. That's very important. I wanted this to be a brand that's here for the next 50, 60 years, right? Or whatever. By the way, I want to thank you for saying I wanted to make money because too many entrepreneurs come on the show and they don't say that. And I think that's disingenuous. I don't think there's anything wrong with saying I did this to make money I wanted to make money so many people say you know money wasn't really an issue it was about the mission or it was about the community and I'm just like come on yeah for me it's not it's not the money is not only because of the money the money is because to me that's the if this were to end right now and someone sees me next week and said congratulations Chris you did an amazing thing on Tuckett I would be You're like, I didn't really.

1:06:37I never really. So that much sale with the money is like, I did it. I built a brand and I sold it for a lot of money. That's what I say about the money. But also, I do want the brand. And the reason I say that is I really believe that this is going to be a billion dollar brand. I still do. So you guys went and worked for the bank and hung your shingle out there. And you had 17 letters of intent. 15. Potentially. About 15. About 15. And we knew the number that we were requiring, which was a very big number. Over a billion dollars? No, close to it. North is probably north of 750, somewhere around there.

1:07:16You'd probably have an outlier. You'd probably have a real low one. And not an unrealistic number with so many letters of intent because you could get into a bidding war. So basically in my mind, I'm there. I mean, I'm sitting there weeks away. I'm dreaming of the coast of France. And I was like, it was, it was real. You know, I was, and, you know, I bought it if it was done a little earlier. We shut it down because of COVID, obviously. Who shut it down? Everyone, like we're, everyone reached out to us. You know, we're not going to do a deal. Like it's, you can't do a deal. All of the potential acquirers pull out.

1:07:52Yeah. Or I don't know if it was pulled out. I can't, it was more of a, we're not giving you our letter of intent right now. The world is closed. We're going to take some time. Okay. Yeah. I think it's shut. When did it shut down? March? It was in March. It was in March of 2020. So all of a sudden, all of these potential acquirers are like, we're going to just take a beat here because we don't know what's going to happen. Right. But you were that close to maybe getting acquired for three quarters of a billion dollars. I mean, so close. And I owned, by the way, a lot of the company because we, when Kleiner put on 8 million, they were very adamant, our main investor to say, this company's doing well, do not dilute, like, let's just raise with debt.

1:08:33So we took on debt because we had a plan. But we had very little cash, you know, in comparison to what you need going through COVID. So the bad news was that was shut down. The worst news was that now all of a sudden you're scrambling. What's our accounts payable? What's our debt? What's this? Our sales numbers are starting to drop significantly. But the biggest thing is I realized, okay, we have some significant cash issues here and they're happening fast, right? Because, okay, now they're closing our stores. Well, that's a big number, big numbers a month. What did you see, like percentage decline from March to April of 2020?

1:09:14Do you remember like more than 20%, 30 %? Probably like 40%, 50%. Just drops. Yeah, because it was as, so we would get, my investor would call us and say, I don't understand. Everyone else is doing good online. And we're like, you don't understand because everyone's buying Viore, right? Everyone's buying non. And by the way, I'm still doing decent amount of revenue with non shirts. The problem is when you have$40,$50,$60 million less in revenue, the math is very simple. You run out of money. So we got on the phone with a bankruptcy attorney, and he's like, you have to declare bankruptcy. This is why bankruptcy exists.

1:09:53Your lawyer is saying this in when? This is April. April. Wait, how much debt did you have, by the way? Like tens of millions, hundreds of millions? No, we had like$30,$40 million, but that wasn't the point. Because you had - You couldn't get new debt. So that's the bigger - Ah, okay. You couldn't go get money. Because you had 30 million in debt, you couldn't get money. And your lawyer, even though you had this national brand and what, 90 stores, your lawyer was saying to you, you got to declare bankruptcy. It didn't matter because our - So we had to pay our monthly payment to the stores, those 90 stores.

1:10:29The lease, right? The rent, right? We had to pay that number. We had to pay all of our employees. So probably 20, 30 grand a month in rent. No, it's a lot of money. And then we had to pay all of our employees. We had just grown too fast, too many employees, paying 90 stores, a big office, all these things that we needed our money to be coming in. And by the way, our factory accounts payable was huge because we were bringing in product for that year that was going to allow us to do massive volume. We had already ordered it. And we had to tell them we can't take the product. And they're like, well, you owe us$30 million or whatever the number is.

1:11:04So the guy, I said, what is bankruptcy? You know, what do you, what is, of course, everyone knows high level what is bankruptcy. I mean, I didn't know that, you know, oh, bankruptcy, what is it? You know what, I probably keep most of my equity. And then we'll just, they're like, well, you own nothing, zero, and you're not going to get paid a dime because they're going to kick you right out. And, you know, there's going to be, with us, there'd be a bidding war. So it's even more painful. Yeah, but why was your lawyer, I guess your lawyer was suggesting this. It wasn't my lawyer. It was a lawyer they brought on who was a bankruptcy attorney.

1:11:36I see. Okay. And he was saying, look, the only way to save the brand is to – and that meant that you wouldn't – all this debt would go away. But then – and you could walk out of there having banked some money and – No, very little. It would have been very, very, very little. Like they would have – They'd gone after you two probably. Yeah. It would have been – it wouldn't have been great. I cannot imagine, even when that was brought up, because you're not a lawyer. Most of us aren't lawyers. When a lawyer says that, I think a lot of people take it seriously. Like, okay, well, I got to consider this.

1:12:10It was the hardest thing to remember. The problem is you're also dealing with this COVID stuff, which right in that period of time was scary for everyone. You're sitting, you can't leave your house. And by the way, that's not a small thing. I don't mean to, everyone goes through, everyone went through something with COVID. So many businesses were lost. So I'm not the only one. It just so happens I was days away from selling it for such a big number. That's the only, you know, it was that kind of super high to super low. So I got on the phone with my partner. We didn't really know what to say or do.

1:12:42I mean, you don't, you didn't know when COVID was going to end. That's the problem. That was what made this so bad. So we called our, all of our landlords one by one. We called all of our factories. Some were great. Some we had threatened back and forth with lawsuits, this and that. 90 % of them said, we think you're going to be an unbelievable brand post-COVID. We're going to hang with you no matter what. So we built up this massive accounts payable. I don't want to say the number. Just to survive. We raised some money at a very low valuation because you had to. Did Kleiner put more money in during this crisis?

1:13:19They did. They did. Okay. And they probably got a good deal. They did get a good deal. I just cannot imagine the level of stress that you were under because, first of all, you're dealing with just declining revenues. You've got to figure out a quick way to get cash infusion. And I believe that you guys had like three kids in quick succession around this time, like over a three-year period of time. Yeah, I had two during COVID. I had four in, yeah, six years. Yeah, all that was happening. It was, um, it was, we were there, we made it to a point that it was now, you know, hanging by a thread. There's really only one person I could talk to about it was my partner.

1:14:00Cause I didn't want to bring in my, my, my wife and my dad. I didn't want to get them nervous. You don't want to talk to them? You don't want to talk to your wife or your dad about this? I didn't. It was, it was so bad, by the way, if, if the company went bankrupt, I couldn't, I don't want to give too much of my personal life, but I couldn't have afforded my, you know, I just sold some of the company. I had built a house. And now it was an ego hit. I hate to say it. It just was. Your company gets pulled from you. It's nothing wrong. Of course. It was a money hit because now you have no money. And by the way, you're not making money.

1:14:32You're not getting a job over COVID. It's just hard. And you have four kids. It was crazy. And it was not because of anything we did wrong. That's what bothered me about it. And there was no solution. You want to know why I didn't tell my wife and father? because there was no solution. Yeah. But you kind of start to emerge from COVID. And we've had stories like this in a show with other apparel brands where COVID ends and they're brands that weren't really fit for COVID. Like they're really more, you know, things that you would wear outside to just look good. And then after COVID, they just explode in growth.

1:15:08And I imagine that once people start to emerge from COVID, not necessarily going back to work, but even going out, people start to buy the clothes again. They start buying the clothes again. Now, we had no cash, right, because we're coming out. So we really didn't know what to expect. What happened was we were able to take on some debt to get us through it. That's how we solved our bankruptcy problem. We solved some with cash and some with debt. We cut back inventory. We do good in 2023, our most profitable year ever in 23, not the growth year where we wanted it to be. Now, long story short, I want to make sure I'm very clear about this.

1:15:45So we solved the problem in 24, and we are now having a tremendous 25. And we are beginning our wholesale growth, and I can get into that in a second as the final phase. But we are – it just took four years. It was a four-year hamster wheel that we were in. All right. So you recover from COVID and back now again to – are you guys getting close to profitability? No, we're profitable. You are profitable. We were profitable in 22, and we were significantly profitable in 23, even though the year wasn't what we wanted because we didn't market. And 24, we were profitable, and this year is an exciting year.

1:16:26All right. You are now, I think, for the first time recently, have gone into wholesale, into Nordstrom, into Macy's, Stitch Fix, and a few other places. Tell me a little bit about that decision. Well, like I said, I want to be a massive brand, a brand that fits all demos, men's fathers, sons, kids. You have to go into wholesale eventually. If you want to scale to that level, to a billion-dollar brand, we're opening in Mexico City later in the year. Just so many exciting things. So that's the one area that is low-hanging fruit because customers want us. We know that. So they're going to want us where they shop, and that's a huge opportunity.

1:17:08And it's definitely part of the long-term plan so I can get back to north of where we were in COVID, pre-COVID. I'm wondering now, I mean, here you've been through certainly trial by fire, a lot of highs and a lot of lows in building this brand since 2010. Here you are now, almost 15 years into this thing. you're obviously super experienced. How do you see your own role playing out? I mean, I guess I imagine that at some point you'd like to hopefully try to see if you could get acquired again, maybe, right? Or I don't know, maybe go public, which is risky too. But I imagine there's a point at which you do exit this thing.

1:18:00Yeah, no, I will definitely want to get acquired and and sell and, and kind of make this a, an ultimate. Now it's become, I need this now to get over this, you know, you don't want to be the person who's going to sell for something and then sell for nothing or sell. So now it's like, I'm back in that. Listen, I'm more stressed now than I was ever. I, there was this little period of time in 19 and 20 when I wasn't because I need this to happen. I am, you know, I am this, these three years have been very draining and, you know, And as Aaron would say the same thing, we have to see this through. But I'll tell you that any deal that I do, I'll still be here helping grow.

1:18:39When I say I think this can be an international brand, I really believe it can. I want to be there for it. I don't want to not be there for some of that exciting parts of it. Chris, given where you are now, I mean, you even admit that when you started this idea, it was one in a million chance of working, of succeeding, because apparel is hard. It's really hard to build an apparel brand, but it did. It did succeed. And I wonder how much of where you got to now, where you are now, and when you reflect on it, how much do you attribute to the work you put in the grind and how much do you think had to do with luck?

1:19:14So I'm a big believer. I'm not someone who denies luck. Luck is so important in every area of life. There's not one successful person who didn't get luck. I think there's a massive amount of luck. I say luck because I launched it at a period of time where I think it allowed me to make mistakes and to still take advantage of paid social. You can make an argument that isn't luck, that strategy, whatever. But I think it's a blend. I think there's no question the hard work, my vision and pushing through and just doing it. I would say just doing it. How many people just don't do things, right? It's crazy.

1:19:49It's draining to be an entrepreneur, I guess is all I can say. I think it's a mix of luck and a mix of hard work. You need both. That's Chris Riccobono, co-founder of Untuck It. And by the way, remember Chris's wine vlog, Pardon That Vine? He stopped doing it years ago, but the videos are still up on his YouTube channel. And in the last one he posted, way back in 2012, Chris is reviewing a Syrah from New Zealand. And what he's wearing? An early version of an Untuck It button-down shirt. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and sign up for my newsletter at GuyRoz.com or on Substack.

1:20:35This episode was produced by J.C. Howard with music composed by Ramtina Ablui. It was edited by Neva Grant with research help from Kerry Thompson. Our audio engineers were Patrick Murray and Robert Rodriguez. Our production staff also includes Catherine Seifer, Carla Estevez, Casey Herman, Sam Paulson, Alex Chung, Andrea Bruce, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

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