North Texas has a rich history of retail and fashion businesses.
Now a new generation of entrepreneurs is building e-commerce and fashion technology startups in Dallas.
“In Texas, I think Dallas is the biggest hub of e-commerce,” said Kevin Strawbridge, founder and managing partner of Square L Group, an e-commerce consulting firm in Frisco, Texas. “A lot of people talk about Austin having an e-commerce play. But Dallas has true merchants and retailer type of people.”
These entrepreneurs are spending far less, often bootstrapping their startups and using creative strategies to build brand awareness and log sales.
These three Dallas startups are making a name for themselves by combining fashion and technology — and proving that having fun is essential.
Foot Cardigan provides a subscription-based sock-of-the-month club. Mizzen and Main sells moisture-wicking, wrinkle-free “performance” dress shirts for men. Need Lifestyle is a monthly e-commerce men’s shop that blends editorial content with carefully selected items.
FOOT CARDIGAN: Leave those boring black dress socks behind.
When you sign up for Foot Cardigan’s socks subscription service, expect to get some whimsical and fun designs like pink elephants, flamingos and skulls.
“Surprise and delight. That’s a huge part of our brand,” said Tom Browning, Foot Cardigan’s chief operations and financial officer.
Before the startup launched its e-commerce shop, the founders decided to test the idea. They created three virtually identical websites with different brand names: Foot Cardigan, Rad Foot and Spiffy Feet.
They bought Google ads and after a 45-day experiment, the Foot Cardigan website had signed up 200 people, including four who bought a subscription that wasn’t available yet.
“We knew we had something,” co-founder and CEO Bryan DeLuca said.
Foot Cardigan launched in June 2012, becoming one of the first sock-of-the-month businesses in the U.S. The startup has 4,000 subscribers and has gained a following for its monthly “random pair of crazy socks.”
For $9 a month plus $2 in shipping, customers receive a pair of novelty socks.
During the last presidential election, Foot Cardigan sold Obama and Romney caricature socks, garnering buzz and media attention. (Obama socks outsold Romney by 4-to-1.)
The idea for Foot Cardigan originated from DeLuca’s three-month European excursion with his wife after he quit his job in the music industry. DeLuca didn’t take enough socks, so he picked up some colorful and funky socks that drew compliments.
When he returned to the states, DeLuca found inspiration in the razor subscription service Dollar Shave Club. A socks subscription business was born.
DeLuca and his partners invested about $4,000. “Sweat equity is the main thing,” Browning said.
Because of its business model — monthly or paying upfront for a three-, six-, nine- or 12-month subscription — Foot Cardigan has been cash-flow positive since its early days, Browning said.
The business is also profitable, DeLuca said.
After buying socks from wholesalers for the first six months, Foot Cardigan began designing its own products. Co-founder and chief technology officer Matt McClard is the startup’s main designer.
Besides 30-somethings DeLuca, Browning and McClard, Foot Cardigan’s other co-founder is Kelly Largent, 29, who is in charge of business development. Browning works for Foot Cardigan full time, and the rest of the team members still have their day jobs — for now.
Paul Song, a Dallas e-commerce entrepreneur who has been advising Foot Cardigan, said he was drawn to the team’s creativity and its ability to execute.
Song pointed to the startup’s social media following on Twitter and Instagram as well as its mostly referral business.
“I’m betting on them specifically with how well they’re going to do,” said Song, president of Dallas-based men’s accessories e-commerce business Cufflinks.com. “It’s almost like an art. You can’t fake good creativity.”
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Still, sock subscription businesses have exploded in the last year.
Sales of men’s socks in the U.S. rose 9 percent last year to $2.7 billion from a year ago, according to retail research firm NPD Group.
About 70 percent of Foot Cardigan’s business is men’s socks. By the end of the year, DeLuca expects to deliver 100,000 pairs.
Foot Cardigan sees more opportunities in international markets, especially after it secured $2 in shipping costs for its global customers in Canada, Germany and Australia.
The startup also plans to launch a line of children’s socks by year’s end. In addition, it will sell limited-edition, premium-material socks for single purchases at a higher price point starting in May.
“We got in at the right time,” DeLuca said. “I don’t think it’s peaked yet.”
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MIZZEN AND MAIN: Under Armour virtually created the performance sports apparel category in the past decade.
Now upstart Mizzen and Main is trying to do what Under Armour did but with men’s dress shirts. The brand’s performance-based shirts have similar moisture-wicking and wrinkle-free properties.
While brands such as J.Crew, Banana Republic and Brooks Brothers carry no-iron dress shirts, Mizzen and Main co-founder and CEO Kevin Lavelle says the company’s shirts incorporate better fabric and technology that also provide a comfortable and trim fit.
“My goal was organic appearance and superior feel,” said Lavelle, a Southern Methodist University graduate. “We didn’t want to create a better dress shirt but also a better-fitting dress shirt.”
Lavelle, 27, experimented with thousands of fabric variations to find the perfect combination. Without divulging its exact formula, some of its shirts combine polyester, nylon and Lycra. Others have cotton as well.
Since launching in July 2012, Mizzen and Main has sold more than 5,000 shirts.
Buzz generated by major publications such as GQ, Details and Men’s Health is helping drive business.
The momentum picked up last year. Revenue in December was 2.5 times the sales it rung up during the first six months of operations in 2012, Lavelle said.
The shirts sell for $125.
During Super Bowl weekend, the company sold its shirts at a pop-up shop at Saks Fifth Avenue’s flagship store in New York. Calling it a “pinch me” moment, Lavelle said, the Saks deal represented a milestone in the company’s progress so far.
“You could have all the money in the world and all the customers in the world, but to be physically there at Saks, you have to be blessed by a number of people to be given a chance that’s the ultimate culmination of branding, customer service, business savvy and the press attention wrapped up in one moment,” he said.
Saks is expected to introduce the brand to other locations, said Lavelle, who’s negotiating with other top department stores.
Mizzen and Main sells its shirts in its online shop as well as more than a dozen boutiques in the Northeast and Midwest.
In December, the company opened its namesake store in Columbus, Ohio, where co-founder and chief technology officer Web Smith lives. Initially launched as a showroom, the shop is now transitioning into a full-scale boutique, Smith said.
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Dallas men’s boutique Warehaus began selling Mizzen and Main shirts when it opened in fall 2012 and became one of the first brick-and-mortar shops to carry the brand, owner Patrick Ware said.
Ware, who likes to support local designers, said Mizzen and Main shirts fill a need.
“Considering that it gets so hot in Dallas, it’s a great brand to help them cool off,” Ware said. “When you have this type of shirt, you look the same as (when) you first put it on.”
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In the meantime, Mizzen and Main is expanding beyond dress shirts.
It recently completed a Kickstarter crowd-funding campaign for a new performance blazer. It exceeded its $15,000 goal by nearly $40,000.
Besides blazers, the company is exploring denim and suiting with performance features.
“Our approach is to be the American clothing company with a classic style, but we’ve incorporated innovation,” Lavelle said.
NEED LIFESTYLE: It’s no secret that most men don’t enjoy shopping.
Entrepreneur Matt Alexander aims to make this task less intimidating through an online curated shopping site that sells handpicked items such as shirts, shoes and men’s accessories.
Need, which launched in November, mixes a personal stylist with a fashion magazine. And unlike flash sale sites, the brand sells products at retail prices, buys a limited quantity and assembles an editorial spread to tell a story.
Alexander realized that this simple concept could be lucrative if done correctly.
“In retrospect, the idea was that we were going to be selling the fundamentals and necessities — nothing superfluous,” Alexander said.
Need is a part of the growing $440 billion menswear market, according to research group Euromonitor International. Menswear “offers a great deal of scope for further innovation online,” according to Euromonitor retail analyst Ashma Kunde.
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Alexander considered launching the site in his native London but figured Dallas, a city that he describes as fashion-conscious, would be a perfect place for his venture.
In addition to Alexander, Need has two part-time workers and one intern. Alexander also hires local photographers for his monthly catalog shoots.
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The website showcases different collections each month, and customers can purchase the items a la carte. The items, which Alexander purchases in bulk at a wholesale price, sell for $200 or less. He sends a personal note with each package he ships.
In December, Need sold out within 30 minutes of launching the collection and had to restock twice.
Since the site’s November launch, Need has attracted 100 partners and 30,000 unique users.
While many of Need’s customers live in Dallas, Alexander said some come from other cities such as San Francisco and New York.
Need has attracted outside funding as well as top advisers such as Carl Sparks, CEO of Travelocity and former president of Gilt Groupe, which started one of the first flash sale sites.
“I think Matt’s approach is great,” said Sparks, who is on Need’s board. “The fact that he has a limited amount of high-quality items sets him apart from the competition. Sometimes fewer things presented in the right way is exactly what you want.”
Alexander said two of his main goals for the company are expansion into other cities and investing in technology.
“Business is good and we’re growing. We built something that’s both sustainable and exciting,” he said.
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